Many contractors working in the state of Maryland often think the only projects upon which they can obtain a mechanics’ lien are new construction projects. This is simply not true. In fact, mechanics’ liens in Maryland, regardless of amount due, are available for all private construction projects, regardless of the size or type! However, if the project is for renovations or repairs then the total contract must equal at least 15% of the value of the structure.
Therefore, when calculating a 15% requirement, a lien claimant should base its calculation on the value of entire improvement to the property, not just the value of the lien claimant’s own labor and materials. In other words, if you happen to be a subcontractor with a direct contractual relationship with the general contractor on a project, you could use the base value of the general contractor’s contract with the owner as a baseline to determine whether or not the 15% rule has been sufficed. See O-Porto Const. Co., Inc. v. Devon/Lanham, L.L.C., 129 Md.App. 301 (1999) (Costs of all repairs and improvements to property, and not just the work performed by claimant, should be considered in determining the 15% of value requirement for mechanics’ lien.). In addition, mechanics’ liens are available when the improvements or repairs are made to a property leased by a tenant for life or for years. See Md. Ann. Code, Real Prop. §9-102(2). To the extent you obtain a lien, it would apply to the tenant’s interest in the property. While the 15% or 25% threshold may seem like a significant hurdle, many, if not most, projects easily surpass that amount. So, while performing work on your next project, be cognizant of the fact that you likely have mechanics’ lien rights to protect you and your company!