A mechanic’s lien is a statutory right enabling those who provide labor and/or materials on a construction project to secure a lien on the property for the value of any unpaid work. Maryland’s mechanic’s lien law is designed to encourage construction by affording this additional protection to laborers and material suppliers. Maryland courts have consistently stated that these statutory requirements must be strictly complied with by a claimant in order to preserve lien rights and ultimately prevail on a mechanic’s lien claim.
A frequent question that arises is who is entitled to a mechanic’s lien under Maryland law. In Maryland, any person furnishing work and/or supplying materials for a building may be entitled to a mechanic’s lien. Any party who performs work or supplies materials on a project may be entitled to a mechanic’s lien, regardless of whether they contracted with an owner, general contractor, or subcontractor. Compare this to the more limiting mechanic’s lien law in the District of Columbia, where only contractors and subcontractors possess lien rights, but lower tier sub-subcontractors and suppliers (anyone without a contract with the owner or general contractor) do not have lien rights.
The type of property subject to a mechanic’s lien is established in MD Code, Real Property, § 9-102, which provides, in part, as follows:
Every building erected and every building repaired, rebuilt, or improved to the extent of 15 percent of its value is subject to establishment of a lien in accordance with this subtitle for the payment of all debts, without regard to the amount, contracted for work done for or about the building and for materials furnished for or about the building, including the drilling and installation of wells to supply water, the construction or installation of any swimming pool or fencing, the sodding, seeding or planting in or about the premises of any shrubs, trees, plants, flowers or nursery products, the grading, filling, landscaping, and paving of the premises, the provision of building or landscape architectural services, engineering services, land surveying services, or interior design services that pertain to interior construction and are provided by a certified interior designer, and the leasing of equipment, with or without an operator, for use for or about the building or premises.
Another key difference in the mechanic’s lien laws of Maryland compared to the District of Columbia and Virginia is commonly referred to as the “15% Rule.” On a renovation project in Maryland, a building must be “repaired, rebuilt, or improved to the extent of 15%” of the property’s value to be subject to a mechanic’s lien claim. If the entire renovation project increases the value of the property by 15% or more, the property is subject to mechanic’s lien claims by unpaid subcontractors/suppliers. If the total renovation project constitutes less than 15% of the property’s value, no mechanic’s lien rights exist. An individual claimant’s contract amount is irrelevant in this analysis, it is the value of the general contract that is determinative for purposes of the 15% Rule. Note that this rule does not apply to new construction projects.
There are many rules that a lien claimant must comply with in order to prevail on a mechanic’s lien claim. This is a highly technical area that demands strict statutory compliance. Mike Bramnick dedicates a significant part of his practice to mechanic lien claims and construction law. Call Mike Bramnick today at (301) 547-3647 or by email at Mbramnick@BramnickLegal.com for a consultation.