Commercial Landlords: Avoid Unwanted Liability for Tenant Improvement Projects
Commercial landlords should take note of Minnesota Statute, section 514.06, which is designed to allow property owners to protect their property from being subjected to mechanics liens for improvements made by other parties like tenants or purchasers. Generally, mechanics liens attach to properties to ensure payment to contractors and engineers who performed improvements on the property. A tenant making commercial improvements may be legally presumed to be doing so on behalf of the landlord, thus subjecting the property to a mechanics lien for improvements authorized by the tenant.
If an owner has actual knowledge of improvements being made to his or her property at the request of a tenant, then that owner is obligated to notify the persons doing the work that such improvements are not being made at the owner's request, or else face potential liability for the improvements by virtue of a mechanics lien attached to the property. Therefore, to prevent a mechanics lien from attaching to the property, a commercial landlord should notify contractors within five days after obtaining knowledge of tenant improvements that the improvements were not requested by the owner or the owner's agent. Notice must be provided in writing or posted conspicuously on the property. For more information on how this statute may apply to tenant improvements on your property, please contact at (651)-967-7344.