This description is for informational purposes only. For additional information, please consult the Maryland Code and the list of Additional Resources at the end of this section. Anyone seeking legal advice should contact a qualified attorney.
Maryland law gives “artisans,” including laborers, mechanics, repairpersons, tradespersons, dry cleaners, and launderers, as well as contractors and subcontractors, a lien on property they build, repair or clean, to help ensure they get paid for their work. If the owner of the property fails to timely pay the worker, the law allows the worker to enforce the lien by selling the property and keeping the proceeds necessary to make up for any payment shortfall. If the sale proceeds exceed the amount owed to the worker, then the owner may keep the remainder.
As soon as an artisan performs work on someone else’s property, Maryland law automatically creates a lien on the property for the benefit of the artisan. The law also allows an artisan to retain property he has created for someone else until he has been paid in full. If the owner does not pay the artisan the full value of the artisan’s work within 90 days, then the artisan can sell the property and keep the proceeds up to the amount owed, plus the cost of the sale. Any remaining proceeds must be paid to the owner. The lien continues until the debt has been satisfied. Read the Law: MD Code Comm. Law § 16-301, § 16-302
For example, if a clockmaker performs a $150 repair on a customer’s clock, the law automatically gives the clockmaker a lien on the clock in the amount of $150. If, within 90 days, the customer pays the clockmaker only $50, the law allows the clockmaker to sell the clock and keep the proceeds necessary to complete the payment. Thus, if the clock sells for $125, the watchmaker may keep $100 of those proceeds, which equals the difference between the amounts the customer owed ($150) and the amount the customer paid ($50) the clockmaker. But the remaining $25 in sale proceeds must be paid to the customer. In this way, the clockmaker recovers the amount she is owed, but no more.
Before selling a customer’s property, an artisan must give the customer notice of the artisan’s intent to sell the property. The artisan may give notice by:
- mailing a notice to the owner;
- posting a notice on the local courthouse door, or on a bulletin board near the courthouse;
- publishing a notice in a local newspaper once a week for two weeks; or
- posting a sign at the worker’s business and on a receipt or invoice for the work.
Special Note for Dry Cleaners and Launderers
Dry cleaners and launderers also may throw away any clothing that a customer fails to pick up for over 6 months. Dry cleaners and launderers must – post a sign in their shop warning customers that clothing left for 6 months will be thrown away. Read the Law: MD Comm. Law § 16-302
A mechanic’s lien is a way for contractors and subcontractors who supply labor or materials for construction to get paid for their work. Using a mechanic’s lien, a contractor or subcontractor who has performed work on a property can sell property in order to recover any amount owed but not paid by a customer. Read the Law: MD Real Property §§ 9-101 - 9-114, MD Rules 12-301 - 12-308
The law automatically gives a contractor or subcontractor a mechanic’s lien on new buildings and some older buildings on which they perform work that increases the building’s value. To establish a lien on an older building, the artisan must increase the building’s value by at least 15%. A tenant may also establish a lien on a building in which she lives, but only if she performs work that increases the building’s value by at least 25%. Under the law, a building includes separately leased units of nonresidential structures. Several types of work result in the automatic statutory creation of a mechanic’s lien, including landscaping, digging a well, constructing a pool or fence, and leasing equipment for use on the property. A contractor or subcontractor can establish a lien for the value of unfinished, as well as finished, projects. Read the Law: MD Real Prop. § 9-101(b), MD Real Prop. § 9-102(a), MD Real Prop. § 9-103(c)
Normally, a building owner is not required to pay a subcontractor directly, because there is no contract between the owner and the subcontractor. A mechanic’s lien allows a subcontractor to recover amounts owed but not paid by the owner to the subcontractor. In order for a lien to arise in favor of a subcontractor, there must be a contract between a contractor and the owner on which the subcontractor works, and between the contractor and the subcontractor. The contract can be any agreement for goods or services, and it need not be written down. Read the Law: MD Real Prop. § 9-101(c)
When Mechanic’s Liens Do Not Arise
Mechanic’s liens do not arise for work on public buildings. Also, if a worker purchases land or a building before a lien on the property is established, then no lien will arise even if the worker provides services that increase the property’s value. Read the Law: MD Real Prop. § 9-102(d)
Separate rules apply to certain subcontractors working on a single-family home. In that case, a lien automatically arises in the amount owed by the owner to the contractor. A subcontractor cannot get a lien on a property if the owner has already paid the contractor. Read the Law: MD Real Prop. § 9-104
In order to establish a lien, a contractor or subcontractor must file a petition in the circuit court for the county where the property is located within 180 days after completing work on the property. Sometimes it is difficult to determine the work completion date is hard. Read the Law: MD Real Prop. § 9-105(a)
Notice For Subcontractors
In order for subcontractors to obtain a lien, they must give the owner written notice of their intent to claim the lien. Subcontractors need to give this notice within 120 days after they complete work or provide materials. Upon receipt of a notice from a subcontractor, the owner may withhold from the contractor the amount owed to the subcontractor, in order to pay the subcontractor directly. Read the Law: MD Real Prop. § 9-104
How to Establish A Lien
In order to establish a mechanic’s lien on land or a building, a contractor or subcontractor (known as a “petitioner” or “plaintiff”) must file a complaint in a circuit court of a county in which at least part of the property is located. The filing must include:
- A complaint setting forth facts supporting the plaintiff’s claim that he or she is entitled to a mechanic’s lien. The complaint also must include:
- the name and address of the plaintiff;
- the name and address of the land owner;
- the kind of work done or the materials provided, the time the work was done, the name of the customer, and the amount due;
- a description of the land or building, including whether some of the property is located in another county;
- for liens on multiple buildings, the amounts owed for work on each building;
- for older buildings, a statement that the work increased the building’s value by at least 15 percent;
- if the plaintiff is a subcontractor, a statement that the owner was given proper notice;
- a sworn statement listing facts showing the plaintiff is entitled to a lien on the property; and
- any other documents necessary to support the claim.
A contractor or subcontractor may amend a complaint, but subcontractors may do so only before the deadline for providing notice of the lien or filing the lien. However, the plaintiff may not use an amendment to increase the amount of the claim or alter the description of the land or building at issue. Read the Law: MD Real Prop. § 9-105, MD Rule 12-302, MD Rule 12-303
Show Cause Hearing
After the complaint is filed, the court will review the documents filed in the case and may ask the petitioner to supplement or explain any statements contained therein. If the court determines that the conditions for a lien have been met, it will enter an order providing 15 days for the property owner to “show cause” why the conditions for a lien have not been met. Read the Law: MD Real Prop. § 9-106, MD Rule 12-304
In the order, the Court will also notify the owner that she may appear at a hearing or file a sworn statement responding to the plaintiff’s claim. The court will also warn the owner that if she does not appear at the hearing or file a sworn statement, then the facts alleged by the plaintiff will be treated as admitted by the owner. In that case, the court may rule on the lien application without a hearing. Read the Law: MD Real Prop. § 9-106, MD Rule 12-304
At the show cause hearing, both the plaintiff and the owner may present evidence in support of their arguments. If there is no dispute over the facts supporting the plaintiff’s lien claim, then the court will enter a final order establishing the lien. Alternatively, if there is a dispute over important facts, but the court finds there is probable cause that the plaintiff has a right to the lien, the court may issue an interlocutory (or “non-final”) order. The interlocutory order will:
- establish the lien;
- describe the land;
- state the amount of the lien;
- specify the amount of a bond the owner must pay to cancel the lien; and
- set a date for trial within six months.
The purpose of a trial is to resolve any remaining disputes over important facts. At the end of the trial, based on all of the documents, testimony, and other evidence presented, the court will issue an order either granting or denying the plaintiff’s request to establish a lien. Read the Law: MD Real Prop. § 9-106, MD Real Prop. § 9-107, MD Rule 12-304
Release Of The Lien
Any time after the plaintiff files her petition for a lien on land or buildings, the owner of the property may ask the court to release the lien. There are two ways in which the owner may obtain an order releasing the lien. First, the owner may file a bond in the amount of the lien. Alternatively, the owner may pay the amount of the lien to the plaintiff. Read the Rules: MD Rule 2-626, MD Rule 12-307
Enforcing The Lien
Within one year after a plaintiff files a petition to establish a lien, the plaintiff may file a motion to enforce the lien. If the court grants the motion, it will issue an order setting a deadline for the owner to pay the amount of the lien and providing that, if the owner fails to meet the deadline, the land will be sold and the proceeds used to pay the plaintiff.
If there are multiple liens on the land or building and the proceeds from the sale are not enough to pay them all, then each lien holder will receive a share of the proceeds proportional to the value of her lien. The court may appoint a trustee to sell the property and an auditor to review any proposed sale and file a report that the court will use to decide whether to approve the sale. Read the Law: MD Real Prop. § 9-108, MD Real Prop. § 9-109, MD Rule 2-543, MD Rule 12-305, MD Rule 12-306, MD Rule 14-303
Alternatives To Mechanic’s Liens
Mechanic’s liens are not the only way for a contractor or subcontractor to collect a debt. A contractor or subcontractor may also bring an action for breach of contract. Read the Law: MD Real Prop. § 9-111
For artisans, contractors and subcontractors seeking payment through the establishment and enforcement of artisan’s or mechanic’s liens, the following resources may be helpful.
Robert D. Klein, Maryland Civil Procedure Forms Title 12: Chapter 300 (3d ed. 2000).
Paul Mark Sandler & James K. Archibald, Pleading Causes of Action in Maryland (5th ed. 2013).
Eliot M. Wagonheim, The Art of Getting Paid: The Business Owner's Guide to Managing Receivables and Collecting Debts in Maryland (2003).
15 Md. L. Ency., Mechanics’ Liens.
Articles and Forms
· Mechanic's Liens in Maryland (http://www.fullertonlaw.com/10MarylandMechanicsLiens.php)
· Order of Satisfaction (http://www.courts.state.md.us/district/forms/civil/dccv031.pdf)
· Request to File Notice of Lien (http://www.courts.state.md.us/district/forms/civil/dccv035.pdf)
· Motion for Release of Property From Levy (http://www.courts.state.md.us/district/forms/civil/dccv036.pdf)
For legal advice on artisan’s or mechanic’s liens, please contact a qualified attorney.