Alabama

Lien Waivers

Lien Waiver Summary
Alabama does not have statutory lien waiver forms mandated by law. As a result, contractors may choose to use any form they prefer. However, it is essential to exercise caution when reviewing and dealing with lien waivers since they are not regulated.

Note that Alabama state law prohibits contractors and suppliers from waiving their right to file a mechanics lien in a construction contract. Although this is a different practice in mitigating risk in mechanics liens, in context it’s prohibited in the state.

Are title companies required by law to manage construction loan disbursements?

No

Can a mechanics lien have priority over a pre-existing mortgage in Alabama?

Generally, no. Alabama is a first-in-time jurisdiction. While an Alabama mechanics lien does not have priority over a prior encumbrance itself, a mechanics lien does have priority against buildings or improvements for the portion of their work product that can be separated/removed from the land and improvement without impairing the value or security of any prior encumbrance. The lien claimant can remove the product of their work before any default or foreclosure of the prior lien. See Ala. Code § 35-11-211.

Notices

Notice of Commencement (or similar like event)

Not applicable.

Preliminary Lien Notifications

Anyone contracting directly with the property owner (an “original contractor”), by virtue of the contract alone, has a lien on the building, improvements, and land they sit on. An original contractor, then, does not need to send preliminary notice.

All other workers or materialmen that do not have a direct contract with the owner have the option to obtain a “Full Price Lien” or an “Unpaid Balance Lien” for their labor or materials.

Full Price Lien Notice – A party can get a mechanic’s lien for the full price of their labor or materials by giving the owner (or the owner’s agent) -before any materials are furnished- a written notice stating that certain materials at certain prices will be furnished for use in the building or improvement. Unless the owner objects, the party will have a mechanic’s lien for the amount and materials reflected in the notice. See Ala. Code §§ 35-11-210.

Unpaid Balance Lien Notice- A person who failed to file the advanced preliminary notice in a timely manner (before furnishing any material) can -before filing a Verified Statement- give the owner notice that they claim a lien on the owner’s building or improvement. The notice must give the dollar amount, what the lien is for, and identify who owes it. After giving the notice, any unpaid balance in the hands of the owner is subject to such lien. See Ala. Code §§ 35-11-218. An original contractor already has full lien protection under §210 and so is not required to file this notice. An Unpaid Balance Lien will not apply to any material furnished that was already provided in a valid Full Price Lien notice.

Verified Statement- In order to obtain a mechanic’s lien, every person entitled to one must file a verified statement in the office of the judge of probate of the county in which the property is located. See Ala. Code §§ 35-11-213. The statement must be verified by the oath of a person having knowledge of the facts and must contain:

• the amount of the demand secured by the lien, after all just credits have been given,
• a description of the property on which the lien is claimed in such a manner that same may be located or identified,
• a description by house number, name of street, and name of city or town being a sufficient description where the property is located in a city or town, and
• the name of the owner or proprietor.

An error in the amount of the demand or name of the owner will not affect the lien. But if no verified statement is filed, the lien will be lost.

Ala. Code §§ 35-11-213 includes a Verified Statement form to be used.

Timing Requirements for filing a Verified Statement – A mechanics lien will be deemed lost if the verified statement is not timely filed as follows.

Every original contractor – within six months after the last item of work or labor has been performed or the last item of any material, fixture, engine, boiler or machinery has been furnished or as otherwise set out in the contract with the owner.

Every journeyman and day laborer – within 30 days after the last item of work or labor has been performed or the last item of any material, fixture, engine, boiler or machinery has been furnished or as otherwise set out in the contract with the owner., and

Every other person entitled to such lien – within four months after the last item of work or labor has been performed or the last item of any material, fixture, engine, boiler or machinery has been furnished or as otherwise set out in the contract with the owner.

Deadline on Enforcement of Alabama Mechanic’s Lien – Generally, and unless any other exception is provided by the law, any action to enforce the lien must start within six months after the maturity of the entire indebtedness (a debt ordinarily matures when the last work or labor was performed. C & S Family Credit, Inc. v. McNairy, 613 So. 2d 1232, 1992 Ala. LEXIS 1274 (Ala. 1992).).

Notice of Completion

Not applicable.