Mechanic's Liens (Statutory Liens for Services, Labor or Material)
Underwriting Manuals
- 3.44 Construction Loan Policies
- 5.32 Extended Coverage
- 5.36 Extrahazardous Risks
- 9.04 Indemnity Agreements
- 12.12 Mechanic's Liens
- 15.32 Pending Disbursement Clause
- 17.36 Residential Title Policies
Standard Exceptions
Bulletins
Forms
- No references available.
Table of Contents
MML
Mechanic's Liens (Statutory Liens for Services, Labor or Material)
Insurance against mechanic's liens is a major source of claims in our industry. Consequently, in order to provide insurance against mechanic's liens to owners (where customary) by deletion of the standard exception, you must verify compliance with the Company's underwriting guidelines for determining that all work is paid for or that none was done on the entire 'project' (e.g., condominium regime). To furnish coverage to a lender, you must follow similar guidelines. However, if the loan relates to contemplated construction, the Company's guidelines are contingent upon analysis of state law (given the different rules of priority); in some states, the Company requires compliance with detailed procedures and/or special pending disbursement clauses; in some locations, the Company prefers to issue a construction loan policy (without endorsement) or use the standard mechanic's lien exception.
Exceptions
MMLX01
ALTA
10/19/2011
V
2
Notice of Intention to File
Notice of intention to file a statutory lien for services, labor or material in the amount of $___________, plus interest, executed by _____________ recorded ____________.
Comment: Some states require the filing of a notice of intent as a prerequisite to later lien claim perfection. This may be a red flag indicating other possible claimants.
Comment: Some states require the filing of a notice of intent as a prerequisite to later lien claim perfection. This may be a red flag indicating other possible claimants.
See Underwriting Manual
MMLX02
ALTA
10/19/2011
V
2
Statutory Lien for Services, Labor or Material
A statutory claim of lien for services, labor or material recorded _______________.
Claimant:
Amount $__________ and any other amounts due thereunder.
Comment: If a lien claim is filed, this may be a red flag indicating other possible lien claims not yet filed.
Claimant:
Amount $__________ and any other amounts due thereunder.
Comment: If a lien claim is filed, this may be a red flag indicating other possible lien claims not yet filed.
See Underwriting Manual
MMLX03
ALTA
10/19/2011
V
2
Specify Possible Statutory Lien for Services, Labor or Material
Possible statutory lien claim for services, labor or material by _______________, in the amount of __________, as evidenced by document, recorded _____________.
Comment: An invoice, letter, other document or communication may evidence a claim not yet perfected. If so, you must except to the possible claim. This possible claim may be a red flag indicating other possible lien claims not yet filed.
Comment: An invoice, letter, other document or communication may evidence a claim not yet perfected. If so, you must except to the possible claim. This possible claim may be a red flag indicating other possible lien claims not yet filed.
See Underwriting Manual
MMLX04
ALTA
10/19/2011
V
2
Suit to Foreclose Statutory Lien for Services, Labor or Material
A notice of pendency of action to foreclose a statutory lien for services, labor or material, recorded _________
Court:
Case No.:
Plaintiff:
Defendant:
Attorney Information:
Name:
Address:
Phone:
Comment: You must except to a known suit to foreclose mechanic’s lien, even if no lis pendens is filed. You must be aware of other possible lien claims that are disclosed by the suit or that may be filed on the project.
Court:
Case No.:
Plaintiff:
Defendant:
Attorney Information:
Name:
Address:
Phone:
Comment: You must except to a known suit to foreclose mechanic’s lien, even if no lis pendens is filed. You must be aware of other possible lien claims that are disclosed by the suit or that may be filed on the project.
See Underwriting Manual
MMLX05
ALTA
10/19/2011
V
2
Judgment Ordering Foreclosure of Statutory Lien for Services, Labor or Material
Judgment in favor of ______________ under Case or Docket Number __________ ordering foreclosure of mechanic’s lien described therein.
Comment: If a judgment orders foreclosure of a mechanic’s lien, you must be aware of other possible lien claims disclosed by the suit or that may be filed on the project.
Comment: If a judgment orders foreclosure of a mechanic’s lien, you must be aware of other possible lien claims disclosed by the suit or that may be filed on the project.
See Underwriting Manual
MMLX06
ALTA
10/19/2011
V
2
Statutory Notice of Commencement
Any lien, or claim of lien, for services, labor or materials by reason of that notice of commencement executed by ______________, and recorded ______________.
Comment: In some states, mechanic’s liens will relate back to the notice of commencement and prime the construction loan mortgage.
Comment: In some states, mechanic’s liens will relate back to the notice of commencement and prime the construction loan mortgage.
See Underwriting Manual
MMLX07
ALTA
10/19/2011
V
2
Notice of Non-responsibility
Any lien, or claim of lien, for service, labor or materials as evidenced by that notice of non-responsibility executed by ____________, and recorded ______________.
Comment: In some states, a notice of non-responsibility may give rise to mechanic’s liens.
Comment: In some states, a notice of non-responsibility may give rise to mechanic’s liens.
See Underwriting Manual
MMLX08
ALTA
10/19/2011
V
2
Statutory Lien for Services, Labor or Material (Inspection)
Any lien, or claim of lien, for services, labor or materials arising by reason of any work of improvement now in progress or recently completed, as disclosed by an inspection
Comment: If an inspection discloses that work has commenced, use this exception. Future mechanic’s lines may have priority over the insured mortgage, and may attach prior to Date of Policy.
Comment: If an inspection discloses that work has commenced, use this exception. Future mechanic’s lines may have priority over the insured mortgage, and may attach prior to Date of Policy.
See Underwriting Manual
MMLX09
ALTA
10/19/2011
V
2
Notice of Completion
Any lien, or claim of lien, for services, labor or materials arising by reason of a work of improvement, as disclosed by a notice of completion recorded ______________.
Comment: Use this exception if a notice of completion has been recently filed, unless you determine that the time for filing mechanic’s liens has conclusively passed under state law..
Comment: Use this exception if a notice of completion has been recently filed, unless you determine that the time for filing mechanic’s liens has conclusively passed under state law..