Construction Loans

construction1Construction loans differ from a standard home mortgage. There are draws (money that the contractor receives throughout the process), which require regular title search updates to verify that there are no mechanic’s liens.

What is a mechanic’s lien?

A mechanic’s lien is a lien filed by either a general contractor or a sub-contractor for payment for materials and/or labor provided during the construction of the building. A mechanic’s lien attaches to the property and payment will be required from the property owner.

construction2How does a property owner protect himself? Answer: use a mechanic’s lien agent (MLA). The mechanic’s lien agent’s name and contact information must be posted on the building permit. Prior to delivering materials or providing labor, a contractor or subcontractor must provide notice to the MLA. If the contractor or subcontractor is not paid, he must notify the MLA within a specified period of time prior to filing a lien in the public records. Failure to provide the appropriate notices to the MLA invalidates the claim, therefore protecting the property owner from surprise claims and subsequent liens placed on their property without warning.

Blue Ink Original does not charge to take on the role of mechanic’s lien agent when we manage your construction loan. We believe strongly in protecting our client, the property owner, and we take the role of MLA seriously.

Using Blue Ink Original to close your construction loan affords you the benefit of our MLA services which protects you, the property owner from having to defend yourself in court for an erroneous claim.