Liens are rights in specific property that exist to secure an unpaid debt. Liens can exist on either personal or real property, and they are usually tied to improving the property at issue. Some common liens include mechanic’s liens, repairman’s liens, tax liens, lessors’ liens, and oil, gas, and mining liens.
Common Lien Issues
Liens are only available in specific situations. Enforcing liens mixes both statutory and contractual law. Even if the lien cannot be enforced under statutory law, a party may still seek recovery under its contract.
There are often considerable consequences for inappropriately filing or maintaining a lien (i.e. wrongful lien and/or abuse of lien right claims). A lien often provides considerable leverage, but that leverage may be reversed when the lien is maintained improperly.
A party fighting against a lien claim can assert defenses available under both statutory and contractual law.
Handling Lien Disputes
The first step in any lien dispute is to make sure the statutory procedures have been followed to create and maintain the lien.
The second step is to review the particular enforcement options for the type of lien being maintained. Certain liens may need to be enforced in court regardless of any ADR resolution provision that may exist in the contract at issue.