The processes required to file your construction liens are often confusing and unclear, and they change depending on your location, so even a simple “Lien Laws” Google search can lead you astray if you aren’t double-checking the rules that apply and how they differ between each state. We’re here to take away the complexity and confusion and give it to you straight. If you work in Alabama and need to know the lien laws, this is the place for you. Here, we break down exactly what the state of Alabama requires for you to properly file a valid lien and bond claim.
How to File a Bond Claim in Alabama
- On a public project of $50,000 or more, a bond is required. The payment bond is only required to be 50% of the contract amount. These bond claim rules are the same as federal projects.
- Subcontractors in Place 4* and below do not have bond or lien rights.
- An action on a payment bond must be brought within one (1) year of final completion. Notice of final completion is given in the local newspaper.
- Must give notice to the bond company of your claim forty-five (45) days before you file the action on the bond.
- You can recover your fees in some cases.
How to File a Lien in Alabama
- A General Contractor can have a lien for the full contract amount, but Contractors in Place 2* or below only have a lien to the extent the Owner owes the General Contractor. This is called an Unpaid Balance Lien.
- Some Material Suppliers may have a lien for the full amount they are owed if they send a notice to the Owner and the Construction Lender before they supply material.
- An unpaid balance lien applies to any amounts that the Owner owes to the General Contractor once the Owner & Construction Lender receive the notice that you are unpaid.
- Someone who only prepares plans, plats, or surveys and does not actually work on the property cannot have lien rights.
- Send notice of unpaid amounts as soon as possible to trap as much money in the Owners' hands as possible. This notice must be sent before a lien is filed.
- A lien must be filed within thirty (30) days of the last time you supplied labor and/or materials.
- Must file suit to enforce the lien within six (6) months of the last time you supplied labor and/or materials.
If you work in Alabama, it is essential that you have a grasp of the information above. Your lien and bond rights are in place to protect you—and filing a valid lien in a timely manner is the best way you can ensure you are financially compensated for the work you do. For more information how to file an effective lien in AL, listen in to The Quit Getting Screwed Construction Podcast's Alabama liens episode!
If you’d like someone else to take care of filing your construction lien or bond, and do it the right way, contact an experienced Alabama lien lawyer who knows construction law. Our sister company, The Cromeens Law Firm, has a 90% success rate of collections before having to foreclose on a lien, saving you costly legal fees. Fortify your future by protecting your pay and filing your liens the right way.
*The “places” referenced in the rules above correlate to the Construction Food Chain Chart from Karalynn Cromeens’ book,
Quit Getting Stiffed. The chart can be found here to use when following these lien and bond rules.