Claim of Lien Form

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Claim of Lien Form

What Is a Claim of Lien Form?

A claim of lien form refers to a legal claim in respect of property which operates in terms of security against the service or money owned to a company or individual or firm. A claim of lien has to be listed in the public records department to ensure that anybody who has a potential interest in the respective property can file a notice in respect of the claim pending.

Who Is Involved in a Claim of Lien Form?

As explained earlier, a claim of lien is a legal claim against a property where two parties are  involved- a lender and a borrower. The person who is lending money or providing the services is known as the lender and the person who is receiving the money or services is known as a borrower.  It is to be noted that the lien is applicable for personal as well as real property. The parties involved in a claim of lien are otherwise known as lienor and linee.

Purpose of the Claim of Lien Form

The purpose of this form helps to ensure legal transparency between both lender as well as borrower. With the help of the claim of lien agreement both the lender and borrower will not face any dispute in the future and it will also provide all the details, their obligations, and rights in relation to the contract.

What Are the Contents of Claim of Lien Form?

The following are some of the important elements which need to be included in the contents of the Claim of Lien;

  1. The name of the lender and borrower
  2.  The address of the lender and borrower
  3. The name of the individual with whom lender has signed the contract
  4.  The price of the contract including the cost of materials, services, and labor, etc.
  5. The duration of the contract
  6. Description of the real property in case of Construction Lien
  7. Name of the owner
  8. The date and time of  service or labor
  9. The unpaid amount if any to lienor
  10. Unpaid finance charges

How to Draft a Claim of Lien Form?

The notice claim of lien has to be in written format in case the lien is related to the services of the real estate. The notice for the claim of lien must provide the details of the description of the property so that it can be identified properly and the lien can be claimed accordingly. The following are some of the points that need to be mentioned while drafting a claim of lien.

The claim of lien contains the below-mentioned information;

  1. Mention the mailing date
  2. Mention the name of the owner
  3. Mention the address of the owner
  4. Mention the name individual filling the notice
  5. Mention the name individual filling the notice
  6. The duration of the contract
  7. The price of the contract including the cost of materials, services, and labor, etc
  8. Description of the real property in case of Construction Lien
  9. The date and time of service or labor
  10. The unpaid amount if any to lienor
  11. Unpaid finance charges

Negotiation Strategy

Negotiation in a contract is obviously a different and complex decision to make. While on the one hand, there is a group of people who have a strong opinion that they will not opt for negotiation even if they are the first ones to make an offer. Here, the reasoning of the first offer provides more insight into what the other parties are thinking and if the negotiation is possible.

Benefits & Drawbacks of the Claim of Lien Forms

Advantages

The advantage of the borrower in case of a claim of lien is that at the offer, the deed will include the release date of the borrower and other individuals who owe the payment or performance otherwise and mentioned obligation that may be secured in terms of the mortgage.

The second benefit that the borrower can get is the publicity, time and expenses avoidance to proceed for the enforcement of the obligations and mortgage of the loan in case of loss of property.

Thirdly, in most cases, it is possible that all the expenses can be paid by the lender including the transfer expenses or additional monetary expense if any in case of a property mortgage process.

Disadvantages

One of the most prominent disadvantages of the borrower in case of a claim of lien is that there is a loss of the property, the income that is being generated from the property, the investment in the property of the borrower. Apart from that, the property conveyance is also taxable as per the law.

What Happens In Case of Violation?

There are different rules and regulations for the violation of a claim of lien and it is also to be noted that the same is also based on the current scenario. The lender can terminate the contraction based on the violation of agreement which is otherwise known as breach of contract. The borrower can be sued by the lender for not performing the promise made by him as agreed in the contract or agreement. If the lender violates the claim of lien, the borrower can also sue the lender for a violation of the contract.

A claim of lien form these days is considered as a legal document for claiming the dues between the parties entering into a contract. As discussed, it has its own benefits and limitations but provides a secure and safe way to resolve any sort of dispute between the borrower and lender legally without any hassle.