Tuesday, February 17, 2009

Mechanics' Liens in Title Insurance

Mechanics' liens present a unique problem for title insurers. A mechanics' lien is established of record by the filing of a Notice of Lien, Claim of Lien or similar document. The priority of the lien, in many states, however, may date from the time of commencement of the work for which the lien is filed. Therefore, if work is commenced before the issuance of a title policy but the lien is filed after the date of policy the title search will not disclose and the policy will not reflect the existence of a lien that is, in fact, prior to the interest insured by the policy.

Many title policies except coverage of this risk with language that excepts to matters not shown in the public records as existing liens at the date of policy. The title insurance company may provide mechanics' lien insurance to the lender by issuance of a loan policy:

- Without exception, based upon priority of the mortgage over subsequently recorded mechanics' liens, because state law requirements are met (state law may provide that the construction mortgage has priority unless a notice of commencement is recorded before the mortgage, or a mechanics' lien is recorded before the mortgage, or visible commencement of construction occurs before the mortgage is recorded).

- With exception to unrecorded mechanics' liens (in many jurisdictions mechanics' liens have priority over or parity with the mortgage, in all or many cases, such as construction loans, or where visible commencement began before recordation of the mortgage).

- With a pending disbursement clause (which may limit priority coverage to authorized disbursements, or construction performed before a specified date). Pending disbursement clauses will vary. They may provide that the coverage increases as disbursements are made in good faith without knowledge of objections or other matters, they may include requirements for waivers and affidavits stating bills have been paid for the last draw, and they may require a continuation of the title examination.


  1. I’ve actually been rotating several of these, so don’t be confused by the name. I think I’m finally happy with this one.Here is my blog which would clear your every doubt about insurance i.e insurance colorado.

  2. A number of people do not have to get worried about spending for their personal healthcare costs or about getting insurance plan because they reside in locations where their governments take health care of these people. However, for the remainder of people, we are better off selecting into a wellness insurance plan, such as a group health insurance plan. But how do you secure into one of these policies and what are they?

    A group health policy is not necessarily for family members or single people. It is purchased by firms who want to provide their precious staff with health coverage. For worker to decide into the corporation health insurance plan, the person ought to work a specific amount of time period each week or more.

    All insurance coverage plans are different. They will are available at various costs and will include numerous varieties of things. To find out what your insurance cover specifics are, you will need to question your workplace about your insurance plan, so anyone can discover out how it works out.

    Group Health Insurance Plans

  3. Mechanics' liens i think is a usefull tools. for me is good!!

  4. Hello Friends,

    It is very nice to be here, nice post.

    Self Credit Repair, Repair Credit Score

  5. I think the act itself of filing a mechanics lien can be difficult. Most States simply require the filing of the mechanics lien with a county or court clerk within a defined amount of time from a triggering event.

  6. if these lenses are safely for a health - I'll try it. thanks

  7. I m happy to visit your insurance blog. I got lots of information which i search. Thanks a lot.


Search This Blog