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What Property Owners Should Know About Mechanic's Liens in Minnesota

What is a Mechanic's Lien?
  A mechanic's lien is a lien against real estate given by law to anyone who contributes to the improvement of that real estate by either (1) performing labor; or (2) furnishing skill, material or machinery.  The lien can prevent a property owner from refinancing or selling the property.  Also, a mechanic's lien holder can foreclose on the lien and force a sale of the real estate.

How is a Mechanic's Lien Created?  Any time a property owner hires someone to perform labor or furnish skill, material or machinery to improve the owner's real property, that person, or another person hired by that person (subcontractor), may claim a mechanic's lien against the owner's real estate to secure and enforce the payment of their bill.  It is important to understand that even subcontractors you have not directly hired can claim a mechanic's lien against your property, and they can make this claim even if you have paid your contractor.

How can You Protect Yourself against Paying Twice for the Same Work or Materials?  You can require your contractor to give you lien releases in exchange for partial or full payment.  By signing a lien release, the contractor/sub-contractor releases its right to a mechanic's lien on the property to the extent of the payment received.

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