Page 39 - State Law Summary of Mechanic's Lien Law

Ohio OH

What is the statutory authority? When does a mechanic’s lien have to be filed for claimant to maintain
Ohio Statutes, Title 13, Chapter 11, §§ 1311.01 to 1311.38. lien rights?
The affidavit for mechanic’s liens must be filed from the date the claimant last
What is the Attachment Date of the Mechanic’s Lien? performed work or labor or furnished materials within the following periods: 60
All liens under Ohio R.C. §§ 1311.01 to 1311.22 for labor or work performed or days if the lien arises in connection with a one to two family dwelling or residential
materials furnished to the same improvement prior to the recording of the notice condominium unit; or 120 days of the lien arises in connection with an oil or gas
of commencement pursuant to Ohio R.C. § 1311.04 are effective from the date the well; or 75 days if the lien arises in connection with any other construction. Ohio
first visible work or labor is performed or the first materials are furnished by the R.C. § 1311.06.
first original contractor, material supplier, laborer to work, labor on, or provide
materials to the improvement. Ohio R.C. § 1311.13(A)(1). What is the period of enforcement of a filed mechanic’s lien?
Mechanic’s liens continue in force for 6 years after an affidavit is filed. If an action
What constitutes visible commencement of construction? is brought to enforce the lien within that period, the lien remains in force until final
Visible work or labor that is performed or the first materials furnished by the first adjudication. Ohio R.C. § 1311.13. The owner, part owner, lessee, mortgagee, or any
original contractor, subcontractor, material supplier, or laborer to work, labor other person with an interest in real property upon which a lien has been taken
on, or provide materials to the improvement. Ohio R.C. § 1311.13(A)(1). Minor site may notify the lienholder to commence suit on the lien. If the lienholder fails to
preparation work (i.e. staking, clearing of brush, etc.) is not considered “visible commence suit upon the lien within sixty days after completion of service upon
work” under the statute. The work deemed the commencement of construction to him of the notice to commence suit, or if the action is commenced but dismissed
form a part of the work necessary for the construction must be of a nature that can with prejudice before adjudication, the lien is void and the property wholly
afterward be considered a component part of the structure. See Schalmo Builders, discharged from the lien. Ohio. R.C. § 1311.11.
Inc. v. Malz, 90 Ohio App.3d 321 (1993).
Is there a procedure to bond over the mechanic’s lien(s)?
What is the priority of the insured construction mortgage/ Yes. The bonding-off procedure in Ohio may be found in Ohio R.C. § 1311.11(C)(1):
deed of trust?
If a mortgage meets the requirements of Ohio R.C. § 5301.232 and is recorded prior Before or after suit has been commenced upon a lien, and whether or not a notice
to the visible commencement of work or labor or the furnishing of materials and is to commence suit has been served, a bond, cash deposit, general obligation of
recorded prior to the recording of the notice of commencement it will have initial any state government or of the United States government, obligation insured
priority. Ohio R.C. § 5301.232. Future advances will retain the same initial priority by an agency of the United States government, or, subject to this division, other
as the original mortgage provided the holder of the mortgage, who is not obligated reasonable security may be provided in double the amount of the claim secured
to disburse, has not received written notice of any lien or encumbrance at the time by the lien or, if the claim secured by the lien exceeds five thousand dollars, in the
of the advance; or the holder of the mortgage who is not obligated to disburse, amount of 1 1/2 times the amount of the claim, conditioned upon payment of any
has not received written notice of work or labor performed or to be performed judgment and costs. A bond shall be drawn in favor of the lienholder and executed
or machinery, fuel or materials furnished or to be furnished at the time of the by sufficient sureties, if required. Other reasonable security may be provided only
advance; or the holder of the mortgage is obligated to make an advance under a with the consent of the lienholder. The bond must be approved at a hearing in the
contractual commitment to do so. Court of Common Pleas in the county where the property is situated.

If priority of the insured mortgage/deed of trust is lost, is there a Are the ALTA 32/33 Series Endorsements available for the Loan Policy?
statutory procedure to regain priority? Yes.
Yes. If priority is lost due to visible commencement of work or labor or the
furnishing of material prior to the recording of the mortgage, the filing of the
notice of commencement will reestablish the priority date from the date for all
work performed or materials furnished thereafter. Ohio R.C. § 1311.13 and § 1311.14
Payments for the improvements made pursuant to Ohio R.C. § 1311.14 will regain
priority to the extent of payment. Unless otherwise stipulated in the mortgage,
if a mortgage securing financing for the construction of an improvement and a
notice of commencement for said improvement are recorded on the same day,
the mortgage shall be considered recorded before the notice of commencement
for purposes of priority. Priority of the mortgage is lost for the entire project and
cannot be regained if the notice of commencement is filed prior to filing the
mortgage.

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