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Public or Private Property
It is important for anyone considering filing a mechanics lien claim to know whether the improved property in question is owned by the public or is owned privately, because a mechanics lien claim can only be filed against private property. Stated somewhat differently, even though one performs work that improves public property, (such as a municipal recreation center, a courthouse or a public park) no mechanics lien claim against that property can be filed or foreclosed (sold at a judicial auction). This is because the law perceives that the public’s right to enjoy property outweighs the right of the party who improved that property to receive payment for those improvements.
However, the fact that a mechanics lien claim can not be filed against public property does not mean that those who improve public property are without recourse, as the Lien Act provides for a lien agains the funds that were appropriated by the governmental body to make the improvements. When properly perfected, public entity in question is required to withhold sums sufficient to satisfy the lien on public funds, which can thereafter be used to satisfy the public funds lien in an accounting lawsuit. It is important to note that an entirely different set of time limits and procedures exists for perfecting a lien against appropriated public funds. Further, some projects require payment bonds to protect those who improve public property.