What happens if you file a mechanics lien, but then you are paid? Or, what happens if a lien expires because it is not enforced within the permissible time period? You might forget about the lien and think it disappears, but this is not the case.
The next step is to file a lien release (also called a release of lien or lien cancellation). Just because a mechanics lien claim expires or you are paid does not mean that it is stripped from the county records. Most states strictly require that the lien claimant formally release the lien after payment has been received, but even if it is not required by your state, it is best practice to release the lien if you don’t intend to enforce your claim.
It is important to handle these documents – like all documents related to the lien process – carefully. Requirements vary by state and even by county, so staying on top of the intricate rules that govern lien releases for your project is essential to securely navigating the lien release process.
How to File a Lien Release?
Lien releases are filed with the county recorder or office where the lien was recorded. Make sure that the lien release contains all the proper information, because making a mistake can invalidate the release and can potentially create problems for the lien claimant. In most cases, the lien release must also be notarized. To make sure that your lien release is filed properly and contains the correct information, follow one of the two options below:
Releasing a Lien: Option 1 (the hard way)
1. Visit zlien.com/resources and select your state
2. Look at the FAQs and Lien Statute to learn how to release a lien in your state
3. Click “Forms” in the menu on the left and download your state’s lien release form
4. Enter the required information
5. Notarize the lien release (if your state requires notarization)
6. File the lien release with the county clerks office and pay any required filing fee
Releasing a Lien: Option 2 (the easy way)
1. Visit app.zlien.com and follow the steps
When to File a Lien Release?
Best practice is to release a lien as soon as payment clears.
In most cases, deadlines for releasing liens are set forth from the date of satisfaction (when the lien claim is paid) or from the date the property owner requests in writing that the lien be released. Keep in mind that these deadlines are set forth to mark the maximum amount of time to file a lien release before the claimant is penalized; waiting until just before the deadline to release a lien can be risky because a hiccup in the process or an unforeseen delay might cause the lien to be released late, resulting in penalties.
The deadlines for releasing a lien vary by state. Most states require that liens are released within 10 to 30 days of satisfaction or the date written request for release was received. However, there are exceptions. Maine provides a longer acceptable timeframe (60 days from satisfaction) while Washington’s statute says that a lien release is due “immediately” upon satisfaction or written request. Other states don’t provide a specific deadline for releasing liens even when they are required, but it is best practice to file a lien release as soon as payment has been received.
What Happens If I Don’t Release a Lien?
Failure to release a lien can result in penalties for the lien claimant. In Alabama, for example, failing to release a lien (or releasing it late) subjects the lien claimant to personal liability of $1000 and liability for actual damages. Many states have similar fines and financial penalties to discourage lien claimants from failing to release liens within the mandated time period.
In addition to statutory penalties, non-compliant lien claimants might face a lawsuit from the property owner. The owner can allege that since the lien is still on record and has formally expired, it is “frivolous” and “slandering title.” Losing such a court battle could result in the lien claimant being responsible for costs and attorneys fees in addition to statutory penalties! This situation is undesirable and can be easily avoided by releasing the lien.
Lien Release Requirements by State
|State||Is Releasing a Lien Required?||When Is It Required?|
|Alabama||Required||Within 30 days of satisfaction|
|Alaska||No specific requirement|
|Arizona||Required||Within 20 days of satisfaction|
|Arkansas||Required||Within 10 days of satisfaction|
|California||May be required|
|Colorado||Required||Within 10 days of written request|
|Connecticut||May be required|
|Delaware||No specific requirement|
|Florida||May be required|
|Georgia||May be required|
|Hawaii||No specific requirement|
|Idaho||No specific requirement|
|Illinois||Required||Within 10 days of written request|
|Indiana||No specific requirement|
|Iowa||Required||Within 30 days of written request|
|Kansas||No specific requirement|
|Kentucky||Required||Within 30 days of satisfaction|
|Louisiana||Required||Upon written request|
|Maine||Required||Within 60 days of satisfaction|
|Massachusetts||No specific requirement|
|Minnesota||No specific requirement|
|Mississippi||Required||Within 15 days of satisfaction|
|Missouri||Required||Within 10 days of satisfaction|
|Nebraska||No specific requirement|
|Nevada||Required||Within 10 days of satisfaction, upon written request|
|New Hampshire||Required||Upon satisfaction|
|New Jersey||Required||Within 30 days of satisfaction|
|New Mexico||No specific requirement|
|New York||No specific requirement|
|North Carolina||No specific requirement|
|North Dakota||No specific requirement|
|Ohio||Required||Within 30 days of satisfaction|
|Oregon||Required||Within 10 days of satisfaction|
|Pennsylvania||No specific requirement|
|Rhode Island||No specific requirement|
|South Carolina||Required||Within 10 days of satisfaction|
|South Dakota||Required||Upon satisfaction|
|Tennessee||Required||Within 30 days of satisfaction|
|Texas||Required||Within 10 days of satisfaction|
|Utah||Required||Within 10 days of written request|
|Vermont||No specific requirement|
|Virginia||No specific requirement|
|Washington||Required||Immediately upon satisfaction or written request|
|Washington DC||No specific requirement|