Woodall Batchelor PLLC, we understand that the ability to enforce mechanic’s liens rights depends on careful consideration before, during, and after construction. Here are a few of our best suggestions for preserving mechanic’s liens rights.t
Draft mechanic’s liens with precision
Judges are instructed to carefully review mechanic’s liens and invalidate certain inaccurate liens. Ensure you have an accurate and precise description of the owner, contractor, property, type of work, licensure information, affidavit and notice.
File liens quickly—especially if payment is uncertain
Many courts have stated that owners are not required to pay contractors twice for the same construction work. If the owner pays the general contractor and the contractor pays someone else, the owner does not then also have to pay that same amount to a subcontractor lien claimant. To avoid this situation, file liens before the owner pays the general contractor if there is a concern that the general contractor will not properly disburse those funds.
Consider multiple contracts
A lien corresponds to the contract under which the work is done. Thus, in the event of multiple purchase orders without one master contract, each purchase order may require a separate lien.
Identify the right property
When in doubt as to the scope or description of the property, get clarification rather than include all of the possible property. Liens that include any additional land not subject to the work or contract may be unenforceable.
Consider the 150 day rule
You can only enforce liens for work provided within 150 days of the last day of your work. For lengthy jobs on which you are receiving partial payment, keep tabs on the age of the outstanding balance. If work outside that 150 day rule is included, the entire lien may be unenforceable.
File mechanic’s liens in compliance with the 90 day rule
You must file the lien within 90 days of the last day of the last month in which you do work, or within 90 days of project completion, whichever is earlier. Any liens filed outside this period are unenforceable.
File suit within the 6 month rule
You must file suit on your lien within six months of its filing or the lien is unenforceable.
Note permits on residential projects
For one or two family homes, carefully note up front whether a building permit has been issued with a mechanic’s lien agent noted. This agent must be notified within 30 days of the issuance of this permit or start of construction. Without this notice, a contractor or subcontractor cannot claim a lien.
Correctly specify interest
Interest is appropriate and enforceable, but should only be claimed in strict accordance with the contract or pay application under which it corresponds.
For more information about mechanic’s liens, don’t hesitate to reach out to one of our construction law attorneys at Woodall Batchelor PLLC.