Businesses work extensively on credit, but every now and then, there are disputes concerning the payments of debts. The Massachusetts Mechanic’s Lien Statute is a law that helps safeguard contractors’ and suppliers’ “investment” in a construction project’s improvement. Whether it is a redesign or any other type of renovation project, the suppliers of materials and/or labor have the right to place liens on the property in order to help safeguard their payments.
Whichever niche within the construction industry you cater to – everything from being a supplier to a general contractor, subcontractor or worker – on a property improvement or home remodeling project, you may have the right to utilize the mechanic’s lien for your debt recovery.
Mechanic’s Lien—What is it and How Does it Work?
A mechanic’s lien is a statutorily-created lien against the construction property. The purpose of this legal debt recovery tool is to secure the supplier to a general contractor, subcontractor or worker’s right to payments for materials supplied or services rendered to a construction property project, even if you do not have a contract directly with the property owner. The following infographic outlines which parties can file mechanic’s liens:
The mechanic’s lien’s primary function is to help suppliers, sub-contractors, sub-subcontractors, and general contractors get their due payments for the products and services they have provided to the construction project. When a construction professional uses a mechanic’s lien, in certain circumstances, it can stop the real estate development and construction work-in-process until the contractor receives their long-due payments.
In addition to this, a mechanic’s lien prevents the property owner from refinancing or selling the real estate. If they want to sell or refinance the property, they must first pay the outstanding dues or record a bond securing the payment secured by the mechanic’s lien.
In simpler terms, the mechanic’s lien helps make sure that you’re going to get paid for your services on a construction or remodeling job. Teaming with an experienced collections lawyer, like those at the Law Offices of Alan M. Cohen LLC, increases your chances of getting paid.
Mechanic’s Lien Statutes Are Extremely Time-Sensitive
Mechanic’s lien is also effective in expediting the debt collections by setting a strict deadline for claim resolution. If payment is not timely received you must commence suit to protect your lien rights. Furthermore, timely filing of a mechanic’s lien at the beginning of your work increases the likelihood that you will get paid. Don’t wait until the last moment legally possible to file your mechanic’s lien. By then, it might be too late.
Filing a mechanic’s lien in the Commonwealth of Massachusetts requires strict compliance with the procedural rules and rigid requirements. Failure to conform to the requirements can cost you the right to benefit from the mechanic’s lien statute. The courts do not tolerate missteps.
Let’s suppose you (the supplier) want to file a mechanic’s lien against the owner of the development company for rental equipment provided on credit basis. However, you fail to list the proper record owner of the property in the Notice of Contract and Statement of Account recorded with the Registry of Deeds. In such a scenario, the court may dismiss the case and render the purported lien as completely faulty and fatally defective, resulting in losing your right to have a security interest in the owner’s property without the need of the permission of a court.
Procedural Rules You MUST Comply With
You shall record a statement signed under the penalties of perjury that give the account of the sum that is due. This notice of contract when you have a contract with the owner should be recorded no later than:
- Sixty days after filing and recording a notice of completion under G.L.c. 254 Section 2 (A); or
- Ninety days after filing and recording of the notice of termination under section two B; or
- Ninety days after filing or recording of the notice of termination; or
- Ninety days after such person or any person by, through, or under him last performed or furnished labor or materials or both under G.L.c. 254 Section 4c.
Besides filing the notice of contract, you must also serve the notice of contract upon the project property owner to create a mechanic’s lien.
You shall also record the sworn statement of account no later than:
- Ninety days after the filing or recording of the notice of substantial completion under section two A;
- One hundred and twenty days after the filing or recording of the notice of termination under section two B; or
- One hundred and twenty days after the last day a person, entitled to enforce a lien under section two or anyone claiming by, through or under him, performed or furnished labor or material or both labor and materials or furnished rental equipment, appliances or tools, file or record in the registry of deeds in the county or district where the land lies a statement, giving a just and true account of the amount due or to become due him, with all just credits, a brief description of the property, and the names of the owners outlined in the notice of contract
Please note that once the statement of account is recorded, you have ninety days to file suit and then another thirty days to make sure to record an attested copy of your complaint in the correct Registry of Deeds in order to enforce the mechanic’s lien. If you don’t file a lawsuit and enforce it within the stated time frame, you will lose your Massachusetts mechanic’s lien’s rights. Your rights will be canceled, and the Notice of Contract and Statement of Account will be deemed dissolved as a matter of law.
Even If You Miss Your Time Deadline for Filing or Enforcing A Mechanic’s Lien, Our Massachusetts Collection Attorneys Can Use Other Techniques to Collect Your Debt
When filing a mechanic’s lien, you must comply with M. G.L. Ch. 254. Strict compliance with the rules as mandated by the court is crucial. However, if you fail to comply with the law or miss the deadline for filing or enforcing a mechanic’s lien, other remedies remain to collect your debt from the party with whom you contracted.
Our seasoned construction and collection attorney has a solid understanding of the legal complexities and laws pertaining to debt collection and the construction industry. This means that we can use other techniques to collect your debts, even if the mechanic’s lien remedy is not available to you. Some of these methods include using reach and apply injunctions, keeper attachments, bank attachments, and other attachments — all of which experienced collections lawyer Alan M. Cohen has used successfully in numerous instances to help parties collect on delinquent debts.
This is where we come into the picture. With over forty-five combined years of legal experience and helping numerous subcontractors, suppliers and general contractors benefit from mechanic’s lien and bad debt recovery, our Massachusetts mechanic’s lien attorneys can provide you with step-by-step guidance and assistance in filing mechanic’s lien in conformance with the law and to collect debts not subject to mechanic’s liens.
This is what one of our clients says about the Law Offices of Alan M. Cohen LLC’s use of mechanic’s liens:
When it comes to a mechanic’s lien in Massachusetts, you are going to need a collection attorney who is experienced in the business of preparing and enforcing mechanic’s liens and collecting bad debts. All you have to do is contact the Law Offices of Alan M. Cohen LLC today at 508-620-6900 or email us at [email protected].