If you have provided labor or materials to a construction project but have not been paid, the best way to pursue payment is by filing a lien. Every state has laws that allow those working on a construction project to enforce a claim for payment against the property itself and/or against a project bond. The claim for payment is commonly known as a construction or mechanics lien.
The laws that create lien rights are hyper-technical. While powerful in protecting the rights of laborers and material suppliers when used correctly, there are many traps for the unwary, and anyone interested in filing a construction lien should be intimately familiar with these statutes’ requirements.
What are the statutory requirements for the contents of the lien?
Are you filing the lien timely?
How long after completion of work can you file a lien?
Did you complete all of the notice requirements?
What amount should be claimed on the lien?
Once a lien is filed, a new set of legal questions arise:
Was the lien filed properly?
Should a party dispute the lien?
Can or should a party bond out the lien?
If the lien produces payment, how do you cancel the inscription?
If the lien doesn’t produce payment, how do you “foreclose” or bring a petition on the lien?
Who is required to receive a copy of the filed lien?
Trade journals, internet sites and other resources are saturated with information about construction liens and their requirements. Feel free to review these materials, but read with a skeptical eye. Each state has its own lien regulations, so if you are looking to file a lien, you should be certain that the information you are receiving is trusted and accurate for the state of the project.
In sum, filing a lien is a very effective weapon in your company’s arsenal when faced with non-payment, but it is essential that you file your lien properly. Failure to follow even one lien requirement could result in the lien being declared invalid, in which case you will lose valuable legal rights.