Page 27 - State Law Summary of Mechanic's Lien Law

Minnesota MN

What is the statutory authority?
Minnesota Statutes §§ 514.01 to 514.17.
What is the Attachment Date of the Mechanic’s Lien?
Minnesota is a “first spade” state. A mechanic’s lien attaches and has priority as
of the day any claimant first furnishes labor or materials on the property for the
beginning of the improvement on the ground. All mechanic’s liens have coordinate
priority, relating back to the first item of labor or materials on the property. Minn.
Stat. Ann. § 514.05, subd. 1.

What constitutes visible commencement of construction?
As against a bona fide purchaser, mortgagee or encumbrancer without actual
notice or record notice, a mechanic’s lien relates back to the actual visible
beginning of the improvement on the ground. Minn. Stat. Ann. § 514.05, subd. 1.
The test for determining visibility is whether the labor or materials would be found
during a reasonably diligent inspection of the real property. Reuben E. Johnson Co.
v. Phelps, 279 Minn. 107, 156 N.W.2d 247 (Minn. 1968), Jesco, Inc. v. Home Life Ins. Co.,
357 N.W.2d 123 (Minn. App. 1984). Visible staking, engineering, land surveying and
soil testing services do not constitute actual and visible beginning of improvement
on the ground. Minn. Stat. Ann. § 514.05, subd. 2.

What is the priority of the insured construction mortgage/
deed of trust?
A construction loan mortgage has initial priority as to all obligatory advances
over any mechanic’s liens if the mortgage is filed before commencement of
construction. Any non-obligatory advances are junior to mechanic’s liens. National
Lumber Co. v. Farmer & Son, Inc. 87 N.W. 2d 32 (Minn. 1957). A permanent loan
recorded prior to visible start of furnishing of any work or materials and before
any claimant files a notice of lien has priority over mechanic’s liens. Minn. Stat.
Ann. § 514.05, subd. 1.

If priority of the insured mortgage/deed of trust is lost, is there a
statutory procedure to regain priority?
No.

When does a mechanic’s lien have to be filed for claimant to maintain
lien rights?
A mechanic’s lien statement must be filed with the county recorder or, if registered
land, with the registrar of titles in county where the improvements are located
within 120 days after the last furnishing of labor or materials by the claimant. Minn.
Stat. Ann. § 514.08, subd. 1.

What is the period of enforcement of a filed mechanic’s lien?
One year after last item of labor, skill, or material is furnished. Minn. Stat. Ann. §
514.12, subd 3.
Is there a procedure to bond over the mechanic’s lien(s)?
Yes, once an action to enforce the lien is filed, application may be made to release
the lien upon deposit of a bond or fixed sum of amount approved by and deposited
into the court. See Minn. Stat. Ann. § 514.10.
Are the ALTA 32/33 Series Endorsements available for the Loan Policy?
Yes.

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