What Happens After I Record My Lien? Webinar Minnesota

This blog recaps expert insights shared by attorney Kyle Ubl during a Minnesota-focused construction law webinar. You’ll learn what happens after you file your lien, how to meet statutory deadlines, avoid common missteps, and take the proper legal actions to secure your payment—especially on projects across the Midwest.

A Quick Primer on Lien Recording in Minnesota

To kick things off, it's important to understand how lien recording works in Minnesota. Recording a mechanics lien begins with filing a lien statement with the county recorder. This must be done within 120 days of the contractor’s or supplier’s last contribution to the improvement project.

That lien statement also needs to be served on the property owner—either via personal delivery or certified mail. Minnesota law strictly construes all lien recording requirements. Failure to meet any procedural element means the lien rights are lost entirely.

Another critical point: never overstate the lien amount. Courts may view an inflated claim as a defense against the lien itself. It’s safer to slightly understate the amount owed, ensuring the claim appears reasonable and legally sound.

The 120-Day Trap: Don't Miss the Deadline

Missing the 120-day deadline is a common pitfall. Contractors sometimes realize too late—say on day 125—that they need to record a lien. While it’s permissible to return to the project and perform legitimate work to restart the clock, courts are wary of insincere efforts.

This is known as the “screen door doctrine”. If a contractor merely tightens a hinge on a screen door and claims it as a new contribution, the courts will reject the attempt. Only substantive work or new material contributions can reset the 120-day period.

What Happens After Filing a Lien?

Often, simply filing the lien gets the attention of the project owner or their lender. That alone may prompt payment or negotiation. But if payment doesn’t follow, the next step is crucial: filing a foreclosure lawsuit.

This lawsuit must be filed within one year of the last contribution to the project. So, in total, a contractor has 120 days to record the lien and roughly eight months thereafter to initiate the foreclosure process.

Don't Wait Until the Last Minute

Most contractors don’t have in-house litigation counsel. That means finding and retaining a lawyer in time to prepare and file the lawsuit is essential. Calling an attorney just days before the one-year deadline might lead to rejection due to lack of availability.  The best practice is to start legal discussions at least a month in advance.

The Foreclosure Lawsuit Process

Once the contractor decides to foreclose, the lawyer will file and serve a foreclosure complaint. This complaint names not only the property owner but also any junior lien holders or creditors as defendants.

What follows is discovery, where both sides exchange documents, request information, and may conduct depositions. All testimony in this phase is given under oath.

Depending on the evidence gathered, the contractor’s lawyer might pursue summary judgment, asking the judge to rule in their favor without a full trial. If the judge believes a trial is necessary, the case proceeds accordingly.

From Judgment to Foreclosure Sale

If the contractor wins the lawsuit, the court will issue a judgment of foreclosure. With this in hand, the contractor’s lawyer contacts the county sheriff’s office to schedule the foreclosure sale. Notice of the sale is then published in approved newspapers or legal bulletins for six consecutive weeks, and the property owner is formally notified.

The Foreclosure Sale

On the day of the sheriff’s sale, it’s common for the contractor to be the only bidder. Their bid amount equals the debt owed, including interest, attorney’s fees, and costs. For instance, if the lien is for $100,000, with $10,000 in legal fees and $2,000 in interest and costs, the bid would be $112,000. Since the contractor is using the debt to “pay,” no cash changes hands.

If another bidder appears and offers more—say $250,000—the contractor is paid their $112,000, and the property owner receives the remaining balance.

Filing a Motion to Confirm Sale

After the sale, the sheriff prepares a report of sale, which the contractor’s attorney submits to the court via a motion to confirm. If the winning bid was less than the amount owed, the contractor may request a deficiency judgment to recover the difference from the property owner.

The Redemption Period

Even after a sale, the process isn’t over. In Minnesota, the property owner has a six-month redemption period during which they can reclaim the property. To do so, they must pay the winning bidder the full bid amount plus interest. If successful, the contractor gets paid and the owner retains the property.

If the owner doesn’t redeem, junior lien holders then have successive seven-day windows, in order of priority, to redeem the property by paying the full bid amount and asserting their own debt interest.

In practice, if the property has significant equity, the original owner almost always redeems within the six-month window—especially if the property’s market value far exceeds the foreclosure’s bid.

Final Ownership

Once all redemption periods expire, the person or entity holding the title at that point officially becomes the new owner of the property. That’s how the lien foreclosure process concludes—and how contractors in Minnesota can secure payment through the legal system.

Final Thoughts

The lien foreclosure process in Minnesota is tightly structured and deadline-driven. Contractors must stay alert to timelines and procedural details or risk losing their right to payment. Working closely with experienced legal counsel well before critical deadlines ensures a smoother path to recovering what’s owed.

If you’re unsure about your lien rights or need help navigating this process, consulting a construction attorney early can make all the difference.

Frequently Asked Questions (FAQs) About Lien Rights in Minnesota

1: Do I have to be licensed in Minnesota to have lien rights?
Yes, you must be licensed and insured in Minnesota to maintain lien rights. The state requires both licensing and insurance as a condition to assert a valid mechanics lien.

2: Can I amend a lien to adjust the lien amount if I’m still within the filing deadline?
Yes, as long as you are within the applicable time frame, you can file amended lien statements to update the lien amount.

3: Do architects or engineers have lien rights in Minnesota?
Yes, both architects and engineers are entitled to lien rights in Minnesota for professional services provided in connection with an improvement to real property.