1. Mechanics’ Liens or Broken Priority

2. If Contractor Not Paid By statute, anyone who furnishes labor or materials for the improvement of real property may file a lien on the property for the value of the services or materials

3. Broken Priority Refers to the priority of the lien which is filed Relates back to the date of the work or delivery of the materials

4. Mechanics’ Lien Lien is prior to the interest of a subsequent purchaser or mortgage lender or construction loan advances Filed after the date of the work or supplying of materials Lien is not recorded at the time of purchase, mortgage or construction loan advance

5. Mechanics’ Lien Coverage If we have broken priority, with the possibility of future mechanics’ liens, title insurer must have A signed indemnity Financials of borrower and/or individual members/managers/officers of borrower Appraisal to determine how much equity is in the property Construction contract

6. Indemnity A signed agreement whereby one party agrees to secure another against an anticipated loss or damage Executed by Borrower, individually Borrower (by officer/member/manager of borrower) If borrower is married, borrower’s spouse

7. Caution on Construction Projects Begin work and have materials delivered only after the borrower (and/or lender) closes the transaction and has paid for title insurance