Home finance and mechanic liens in Connecticut

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Bankers and other professionals who have worked on home loans in states other than Connecticut will know the hassle of making home loan advances. You will typically need to do a title update and obtain deposit waivers and various waivers from contractors and borrowers. This is because many states give liens on works and building materials (i.e., mechanic liens) over later home loan advances.

This is not the case in Connecticut.

In general, Connecticut law gives precedence to the lien that is “appended” first. A mortgage lien becomes due when the mortgage is entered in the relevant land registers. The mechanic’s right of lien takes effect at the point in time when the respective contractor (or subcontractor) begins work on the property. So if your home loan mortgage is recorded prior to starting work on the property (and your mortgage meets all of the other requirements for taking out a valid future advance mortgage), you will take precedence over the mechanic’s lien below.

Note, however, that the same applies vice versa if a contractor begins work on the property before the mortgage is recorded.

Even if the payment to the contractor is currently being made at the time the mortgage is taken up, if the borrower / landowner does not pay the contractor work / materials carried out later, the fitter’s right of lien for these materials / work applies at the time of taking up work and has priority Your mortgage. Therefore, when taking out the home loan in Connecticut, it is customary to seek an affidavit (and indemnity) from the owner stating that no work has been done in the past ninety days or materials have been supplied that preceded a mechanic’s lien over the mortgage (see Connecticut General Statutes Section 49-34, which states that a contractor has ninety days after completing work on a property to file a lien on the mechanic with the town clerk). If this is not the case, you usually request a written lien submission from all contractors and subcontractors who started work on the property before it was completed. (Note that mechanic lien waivers may be unenforceable under Connecticut law, so subordination of the lien is the norm; see Connecticut General Bylaws, sections 42-158l which provides in the relevant part, “[a]no provision in a building contract or a regular waiver of the lien. . . which pretends to waive the right of a contractor or to release it. . . [to] assert a mechanic’s lien. . . for services, work or material services that have not yet been performed or paid for are ineffective. “)

Therefore, if all of these matters are properly resolved prior to the closing of the loan, there is no need to conduct property recovery and lien exemption at the time of a home loan prepayment in order to preserve the primacy of your mortgage. That being said, there might be other reasons to receive these items. You can use this procedure to confirm, for example, that construction is progressing quickly and that the borrower is not meeting his other obligations.

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