Oklahoma Mechanic’s Liens: File, Enforce, Release, or Contest

If you’re a contractor, subcontractor, supplier, or anyone else who has provided labor, materials, or services to improve a property in Oklahoma, it’s crucial to understand your legal rights to ensure you get paid for your work. One of the most powerful tools available to you is the mechanic’s lien. In this comprehensive guide, we’ll dive deep into what mechanic’s liens are, who can file them, the specific steps for filing, enforcing, and releasing liens, and address special situations like owner-occupied residences, bonding off liens, and contesting invalid liens.

What is a Mechanic’s Lien?

A mechanic’s lien (often called a mechanic’s and materialman’s lien in Oklahoma) is a legal claim against a property that grants the holder a security interest in that property. It’s a way for those who have supplied labor, materials, or services for the improvement of real estate to secure payment for their work.

As outlined in 42 O.S. §141, any person who performs labor, furnishes material, or leases equipment used for erecting, altering, or repairing any building, structure, or improvement on land under a contract with the property owner (or their agent, trustee, contractor or subcontractor) has a lien on the land and improvements to secure payment for that work.

Some key points about mechanic’s liens in Oklahoma:

• They cover the entire property where the work was done, including the land and any buildings or improvements.
• If the work was done at the request of a tenant (lessee), the lien attaches only to the leasehold interest and improvements, not the fee owner’s title, unless the owner also requested or is obligated to pay for the improvement.
• Design professionals like architects and engineers can file liens if their plans are actually used in construction.
• A mechanic’s lien has priority over any other liens or encumbrances that attach to the property after commencement of the improvement (i.e. it “relates back” to start of work).

The mechanic’s lien statutes serve an important purpose. As the Oklahoma Supreme Court has indicated, the goal is to protect those who provide labor, services, and materials and to secure payment of claims by giving notice to owners to prevent double payment. Biantrav Contractor LLC v. Condren, 2020 OK 73. In other words, lien rights help ensure that those who improve property get paid and that owners aren’t unduly surprised by hidden claims.

Who Can File a Mechanic’s Lien in Oklahoma?

The following parties have mechanic’s lien rights under Oklahoma law:

• Original/General Contractors who contract directly with the property owner. This includes anyone who agrees to perform labor or services, furnish material, or lease equipment used in making improvements to real property under a contract with the owner.
• Subcontractors who do not have a direct contract with the owner, but instead are hired by the original contractor to provide some portion of the work. Subs have the same lien rights as the original contractor for the amount due for their work. This includes sub-subcontractors and more remote subs as well.
• Material Suppliers who supply materials, supplies, or equipment to the project under an agreement with the original contractor or a subcontractor. Suppliers are treated similarly to subcontractors for lien purposes.
• Laborers who perform work on the project, whether for the contractor, a sub, or supplier.
• Design Professionals, like architects and engineers, if their plans or designs are actually used in the construction of an improvement to the property.
• Equipment Lessors who rent equipment that is used on the site for the improvements. However, equipment lessors do not have lien rights on owner-occupied residential property or on oil and gas projects (unless specific lien rights are granted under the oil and gas well lien statute).

The key is that the claimant must have provided labor, services, materials, or equipment pursuant to an agreement with either the owner or someone who themselves is linked contractually to the owner. That agreement could be oral or written, but an oral contract may be much harder to prove up in the event of a lien dispute. Proper documentation of contracts and timely invoicing are crucial to supporting a valid lien claim.

Notices Required for a Valid Mechanic’s Lien

Oklahoma law imposes certain notice requirements that lien claimants must follow to preserve their right to file a valid lien. The notices differ depending on whether the claimant is an original contractor or a subcontractor/supplier.

Pre-lien Notice (for Subcontractors and Suppliers)

Under 42 O.S. §142.6, any claimant other than an original contractor must send a pre-lien notice to the owner of the property and the original contractor as a prerequisite to filing a valid lien. This notice informs the owner that the sender has provided labor or materials to the project and if unpaid, may file a lien against the property.

The pre-lien notice must be sent within 75 days of last furnishing labor or materials. It must contain:

1. A statement that it is a pre-lien notice;
2. The claimant’s name, address, and phone number;
3. The date of supply of material, services, labor or equipment;
4. A description of the material, services, labor or equipment;
5. The name of the person who requested the material, services, labor or equipment;
6. The address, legal description, or location of the property;
7. The amount claimed; and
8. The claimant’s signature.

Proper service of the notice is critical. It should be delivered personally with a written acknowledgment of receipt, sent via certified mail, or hand-delivered with receipt confirmation. Alternatively, service via fax or email is allowed if you can show proof of electronic delivery. The claimant should attach an affidavit verifying they properly sent the pre-lien notice when later filing the lien statement (falsifying this affidavit is a criminal misdemeanor).

There are a couple narrow exceptions to the pre-lien notice requirement:

1. If the aggregate claim is under $10,000.
2. If the project is a residential property with no more than 4 units, and none of the units are used as a dwelling by the owner (for instance, new homes in a development).

Outside of those exceptions, sending the pre-lien notice is a mandatory step for subcontractors and suppliers. Failure to send it will make the lien invalid to the extent of the unpaid portion for which notice was required.

What If I Don’t Know Who the Owner Is?

Sometimes subs may not know the property owner’s identity or address. In that case, the statute allows them to request the owner’s information from the original contractor. The request must be in writing. If the original contractor fails to provide the info within 5 days of receiving the request, the sub is excused from sending notice to that owner. However, they must still send the notice to the original contractor. The sub should document their written request and the contractor’s failure to timely provide owner information in case the issue arises later.

Notice of Lien Filing (from County Clerk to Owner)

Within 5 days after a mechanic’s lien statement is filed in the county clerk’s office, the county clerk is required to mail a notice of the lien filing to the property owner by certified mail (42 O.S. §143.1). This notice lets the owner know that a lien has been placed on their property.

As the claimant, your role here is to provide the clerk with the owner’s last-known address when you file your lien. You’ll also need to pay a small fee (usually $10-15) to cover the clerk’s mailing costs.

The clerk’s mailed notice must contain:

• The date the lien statement was filed
• The name and address of the claimant
• The name of the owner
• The amount claimed
• A legal description of the property

If after due diligence the clerk cannot determine the owner’s identity or address, you (as claimant) will need to serve notice yourself, either by posting on the property or serving the occupant, within 60 days of filing your lien.

Okla. Stat. tit. 42, § 143.1(B) allows a lien claimant to serve notice by alternative means if, after due diligence, the property owner or responsible party cannot be found. Before doing so, the claimant must first file an affidavit detailing their efforts to locate the owner. If the owner remains unreachable, the claimant has 60 days from the lien filing to serve notice to the occupant of the property in the same manner as serving an owner. If the property is unoccupied, the claimant may instead post the notice in a conspicuous location on the property or any improvements. This ensures that notice is still reasonably provided even when the owner cannot be personally located.

However, claimants should be careful not to simply skip directly to serving the occupant or posting at the property. The due diligence step is critical. Due diligence may require extensive research to ensure that all possible efforts have been made to successful provide the lien statement to the actual owner. That last thing you want is to have the lien declared invalid at the end of the process due to the court’s rejection of due diligence efforts.

Note: This post-filing notice requirement is separate from the pre-lien notice that subs must send before filing. Don’t confuse the two. You cannot rely on the clerk’s notice to satisfy your pre-lien notice obligation as a sub.

Filing a Mechanic’s Lien in Oklahoma

Now that we’ve covered the pre-filing notices, let’s get into the nuts and bolts of actually filing your mechanic’s lien in Oklahoma. We’ll walk through the process separately for original contractors and subcontractors, as the deadlines and some requirements differ.

Filing a Lien as an Original Contractor

If you contracted directly with the property owner, you are an original contractor. Here are the steps to file your lien:

1. Determine your deadline to file. For an original contractor, you must file your lien statement within 4 months (don’t calculate it as 120 days) from the date you last furnished labor or materials on the project under the contract. So if your last day was April 10th, your lien is due by August 10th. For landscaping work like planting trees or shrubs, the 4 months runs from the date of planting. Oklahoma generally follows the legal rule that a “month” means a calendar month, unless specified otherwise in the statute. Okla. Stat. tit. 25, § 23 states: “The word ‘month’ means a calendar month, and the word ‘year’ means a calendar year unless otherwise expressed.”
2. Prepare your lien statement. The lien statement must be in writing and should include:
   • The amount claimed, with some detail as to the work or materials constituting the claim (an itemized statement attached as an exhibit is best)The name of the property ownerYour name (as claimant)A legal description of the property (a street address alone is insufficient; use lot/block or metes and bounds from the deed)A sworn affidavit that the information is correct
   Attach documentation showing your itemized charges and credits to clearly substantiate the amount claimed. Remember that at some point, your statement and attachments may be scrutinized in court, so ensure they are clear, logical, and professional.
3. Record the lien statement. Take your completed lien statement (signed and notarized) to the county clerk’s office in the county where the property is located. You’ll pay a small filing fee (usually under $50) and the clerk will record your lien in the mechanic’s lien book. At the time of filing, provide the clerk with the owner’s last-known address and pay the notice fee so the clerk can mail notice to the owner.
4. Calendar your enforcement deadline. In Oklahoma, a mechanic’s lien is valid for 1 year from the date of filing. If you haven’t filed a lawsuit to enforce your lien within that year, it automatically terminates and becomes ineffective. Put a reminder in your calendar so you’re aware of your enforcement window!

That’s the basic process for an original contractor. After filing, the clerk mails notice to the owner and your lien attaches to the property, clouding the title until released or expired. We’ll cover the enforcement process later in this guide.

Filing a Lien as a Subcontractor, Supplier, or Equipment Lessor

Those not contracting directly with the owner, like subs and suppliers, have very similar steps for filing, but with a couple key differences in deadlines:

1. Send your pre-lien notice. As covered above, you must send a pre-lien notice to the owner and general contractor within 75 days of last furnishing labor or materials (unless exempt due to the amount or residential new build status). This is a mandatory prerequisite to filing a valid lien.
2. Determine your lien filing deadline. Subcontractors, suppliers, and equipment lessors have 90 days from last furnishing labor or materials to file their lien. This is a hard deadline, so docket it carefully.
3. Prepare the lien statement. Your lien statement as a sub is essentially the same as an original contractor’s. It must be in writing, itemized, and verified by affidavit. It should include:
   • The amount due to you (with supporting documentation as an exhibit)The name of the ownerThe name of the original contractor who hired youYour name and infoA legal property descriptionAffidavit swearing the statement is true and accurate
   Note: As a sub, your lien statement should also include a statement that you completed the required pre-lien notice. You can add an affidavit like: “[Your Company] further states that on [date], which was within 75 days of last furnishing labor or materials, a pre-lien notice pursuant to 42 O.S. §142.6 was sent by certified mail to [Owner] at [address] and [Original Contractor] at [address]. It’s best practice to attach a copy of the pre-lien notice and proof of mailing as an exhibit to your lien statement to head off any later challenges.
4. File your lien statement with the county clerk. Just like an original contractor, take your signed and notarized lien statement to the county clerk in the county where the property is located. Pay the filing fee and notice fee. Provide the clerk with the owner’s info for mailing the lien notice. The clerk records your lien in the mechanic’s lien journal.
5. Calendar your foreclosure deadline. You have 1 year from the filing date to enforce your lien via a foreclosure lawsuit if needed. Mark that on your calendar.

After filing, your lien is perfected and attaches to the property. The clerk mails notice to the owner and you wait to see if you get paid. If not, you’ll have to take further action to enforce before the 1-year deadline. Let’s turn to that process now.

Enforcing (Foreclosing) an Oklahoma Mechanic’s Lien

Filing a mechanic’s lien secures your claim, but the lien itself won’t force payment. Sometimes filing is enough to prompt the owner or general contractor to pay you. But often, especially on problem projects, you’ll have to go a step further and enforce your lien rights through a foreclosure lawsuit.

A mechanic’s lien foreclosure suit is a legal action to force the sale of the property to satisfy your lien. It’s similar in concept to a mortgage foreclosure – you’re asking a court to order the sheriff to sell the property and use the proceeds to pay off your debt. At a general level, here’s how it works:

1. File suit before your lien expires. Your key deadline is 1 year from the date your lien statement was filed. If you don’t file a foreclosure action in court by then, your lien terminates and you lose that leverage. So first and foremost, calendar that deadline and don’t miss it.
2. Prepare your petition. A lien foreclosure suit begins with filing a petition in the district court of the county where the property is located. Your petition should include (among other information):
   • A description of the property and the work you didThe identities of all parties involved (you’ll need to name the owner and original contractor as defendants, and any other lienholders)The amount you’re owed and basis for your claimA statement that you previously filed your lien statement and have the right to forecloseA request that the court order the property sold and your lien paid from the proceeds
   It’s strongly recommended you hire an experienced attorney to prepare and prosecute your lien foreclosure suit. The rules around proper parties, service, procedure, and proof can be complex.

3. Serve all necessary parties. Oklahoma mechanic’s lien law requires you to include certain entities as defendants in your foreclosure suit. At a minimum, you must name:
   • The property ownerThe original contractor (if you are a sub or supplier)Any other lienholders who have active liens on the property
   Failure to include a required party could result in your case being dismissed, so thorough title work is essential to identify all necessary defendants. Your attorney will need to have each party properly served with a summons and your petition. Legal service of process involves specific definitions and requirements, so it is generally performed by an attorney.
4. Prosecute your case through judgment. After filing and service, your lien foreclosure will proceed like a typical civil lawsuit. The defendants have a certain number of days to file an answer to your petition. There may be an exchange of discovery requests if the facts are disputed. The owner might challenge the validity of your lien on technical grounds, argue that your work was defective, or claim they already paid the original contractor in full. The contractor might cross-claim against the owner for non-payment. Any other lienholders will want to establish their priority and entitlement to sale proceeds. If the issues are purely legal, your attorney may file a motion for summary judgment to expedite a ruling. Otherwise, if the dispute continues and you cannot obtain default judgment, the case may be set for trial. Most lien foreclosure suits don’t actually go to trial – they settle through negotiation once all the parties’ rights are determined, or they conclude with default judgment. But if it does go the distance, you’ll need to prove your compliance with the lien laws and the amount owed.
5. Attend the sheriff’s sale. If you prevail in your foreclosure action, the court will issue a judgment declaring your lien valid and ordering the property sold at a sheriff’s sale. The sheriff’s office will then advertise the sale, typically for 3 weeks in a local newspaper. The sale is conducted as a public auction, usually on the courthouse steps. Bidders must provide payment at the time of sale. As the lien claimant, you can “credit bid” up to the judgment amount (meaning that instead of paying new cash, you can bid the amount you’re owed and have that apply as a credit to your judgment if you’re the high bidder). After the sale, the court will confirm the sale and authorize the sheriff to issue a deed to the winning bidder.
6. Collect your judgment. After deducting the costs of the sale, the sheriff will apply the sale proceeds to pay off lien claimants in order of priority. As an original contractor, your lien likely has top priority (assuming no prior recorded mortgages). Subcontractors and suppliers generally have equal priority and share pro rata if there are insufficient proceeds (assuming the work start date is the same). Any surplus goes to the owner. If the sale proceeds are less than your lien amount, you can typically pursue the original contractor or property owner for the deficiency balance. The court will likely also award you costs and attorney’s fees as the prevailing party.

The key to a successful lien foreclosure is having your ducks in a row before you file. Make sure you have complied with all pre-suit notice and filing requirements. Have detailed records documenting your work and the unpaid balance. Be prepared for challenges to your lien and stay in close communication with your attorney. While foreclosing on a mechanic’s lien is never a fun process, it’s a powerful tool to ensure you’re paid what you’ve earned.

Bonding Off a Mechanic’s Lien

Sometimes after you’ve filed your mechanic’s lien, the owner will want to “bond off” the lien to remove it from the property records. They might be trying to refinance or sell the property and need clear title. Bonding off doesn’t mean your lien is gone – it just substitutes a surety bond for the property as your collateral.

In Oklahoma, an owner can bond off a lien by filing either: (1) a corporate surety bond; or (2) a cash deposit, in an amount equal to 125% of the lien claim. For example, if you filed a lien for $10,000, the owner would file a bond or deposit $12,500 with the court clerk. The clerk then mails you notice that the deposit or bond has been filed.

Once the bond or cash is deposited, your lien attaches to that security instead of the real property. The owner gets a release of lien to file in the land records. You still have all your same lien rights and foreclosure remedies, but against the bond rather than the property itself.

If you believe the bond amount is insufficient to cover your claim plus costs and fees, you have 10 days from receiving the clerk’s notice to file an objection. The clerk will then set the matter for a prompt hearing before a judge to determine the appropriate bond amount. If no objection is filed, the substitution becomes final.

Owners like the bonding-off process because it frees up their property. And in most cases, it shouldn’t prejudice you as the lien claimant, because you still have a secured means of collecting your debt. Just be vigilant about any notices you receive regarding a bond, and don’t hesitate to object if you believe the amount is inadequate.

Releasing a Mechanic’s Lien After Payment

Whether through informal negotiations or a lien foreclosure, when you receive full payment on your mechanic’s lien claim, you need to release the lien to clear the property’s title. Here are the steps:

1. Prepare a lien release. Your lien release needs to be in writing and include:
   • The name of the property ownerYour name as the claimantThe legal description of the propertyThe recording number of your original lien filing (book/page or instrument number)The amount of your original claimA statement that you have received full payment and are releasing the property from the lien
2. File the release with the county clerk. Take your signed and notarized lien release to the same county clerk’s office where you originally filed your lien. Pay the small recording fee (usually under $20). The clerk will record your release in the land records and note it in the mechanic’s lien docket to show your lien has been satisfied.
3. Send a copy to interested parties. Though not strictly required, it’s good practice to send a copy of your recorded lien release to the property owner and the original contractor, so everyone has documentation that the claim is resolved.

Don’t put off preparing and filing your lien release. The statutes require a lienholder to release a satisfied lien within 30 days of receiving a written demand from the owner. If you fail to timely release your lien, you could be liable to the owner for damages and attorney’s fees. It’s also just good business to close out your liens promptly – you’ll need an accurate title history for the property if you ever have to file another lien.

Contesting an Invalid Mechanic’s Lien

What if you’re on the other side of a mechanic’s lien dispute? If you’re a property owner and a contractor or supplier has filed a lien you believe is invalid or exaggerated, you have options to dispute it.

First, you can demand that the claimant release the lien. Send a formal written request detailing why you believe the lien is improper. For example, you might show the pre-lien notice wasn’t sent on time, that you already paid the claimant in full, or that their work was defective. Keep a paper trail of your communications.

If the claimant refuses to release the lien voluntarily, you can take legal action to challenge it in court. Under 42 O.S. §177, any owner or interested party can file a lawsuit against the lien claimant to “adjudicate the validity” of the lien. You’d file a petition requesting a declaration that the lien is invalid and an order releasing it of record. The lien claimant then has the burden to prove compliance with the lien statutes.

At the hearing, the court will take evidence on issues like whether the pre-lien notice was properly served, whether the lien statement includes a proper verification and itemization, whether the amount claimed is accurate, and other possible defects depending on the facts. If the court finds the lien is valid, it will likely enter a judgment for the claimant and order you to pay the claim plus costs and attorney’s fees. But if the court agrees the lien is invalid, it will issue an order discharging the lien as of record. You may also be entitled to recover your costs and fees for bringing the contested lien action.

The most common reasons mechanic’s liens are found invalid are failing to timely serve the pre-lien notice on the owner, missing the deadline to file the lien statement, and filing a false or exaggerated lien. To best protect yourself against improper liens, keep detailed records of all your payments to contractors and suppliers, including lien waivers where appropriate. If a problem arises, promptly consult an attorney to assess the validity of the lien and your options for challenging it.

Avoiding Mechanic’s Liens Through Diligent Project Management

An ounce of prevention is worth a pound of cure when it comes to mechanic’s liens. If you’re a property owner embarking on a construction project, you can take proactive steps to reduce the risk of costly lien disputes down the road:

• Have a thorough, written contract with your general contractor that clearly defines the scope of work, payment schedule, and lien protocols
• Insist that your contractor provide you with conditional lien waivers from all subcontractors and suppliers as a prerequisite for progress payments or final payment
• For larger projects, consider requiring the general contractor to furnish a payment bond to guarantee the subs and suppliers are paid
• If you receive a pre-lien notice from a sub or supplier, communicate promptly with your contractor to determine why that party hasn’t been paid – don’t ignore lien notices
• Establish a line of communication with the project manager and schedule regular progress meetings to stay on top of any payment issues that may be brewing
• Consider setting up joint checks or an escrow account to ensure funds flow properly to all parties

The bottom line is that mechanic’s liens can quickly tank an otherwise successful project. By understanding the lien process and prioritizing sound financial management, you can usually avoid them or resolve them before they spiral out of control.

Conclusion

Whether you’re a general contractor, subcontractor, supplier, or property owner, we hope you now have a working understanding of the rules, deadlines, and documents involved in the lien process. Securing and enforcing your lien rights is critical to getting paid what you’ve earned in your construction business.

While not every project will require you to file a lien, it’s essential to understand the process and follow the steps to preserve your rights, even if you don’t end up having to enforce the lien. Sloppy paperwork, missed deadlines, or incomplete filings can torpedo your lien claim.

At the same time, mechanic’s liens are not to be taken lightly. Improperly filed liens can backfire in the form of legal costs and delays. If you find yourself in a payment dispute on a project, your first step should be to open a dialogue with the other party and try to resolve it short of filing a lien. Escalate to a lien only when informal resolution has failed.

The mechanic’s lien system works best when everyone understands the rules and their respective responsibilities. General contractors should communicate clearly with their subs and suppliers about payment expectations. Subcontractors and suppliers must be diligent about their pre-lien notices and lien filings. And owners should monitor the project closely and address any payment problems head-on.

If you need assistance to file, enforce, contest, or bond off a lien, you can also schedule a consultation with one of our experienced construction attorneys to discuss your specific situation.