The importance of timing in filing a mechanic’s lien
As a business in the building trades, you have an advantage in commercial debt collection not available to other industries. When a customer fails to pay you, you can rely on a mechanic’s lien against the property you are working on. At Law Offices of Alan M. Cohen & Associates LLC, we have helped many business owners enforce their mechanic’s lien claims to collect on a debt. This post discusses a few things you should know about timing in this process.
What is a lien?
First, you must understand that under Massachusetts law, a mechanic’s lien is a real property interest that you can enforce. When you file a lien, you tell the owner that you have this interest and if they do not pay you per your written contract, you will foreclose on the property in order to collect.
Why is timing important?
Many pieces of real estate have at least one lien against the property already. A mortgage loan is a type of lien, for instance. When the owner stops making the necessary payments on such liens, any lien holder can foreclose, but the order in which the liens were filed will dictate the order of collection on the property in many cases. Therefore, filing as soon as possible may give you priority over other lienholders.
In addition, you must follow the proper procedures under the law in order to have an effective lien. Massachusetts requires several steps and you must complete them accurately and within the strict time limits. Depending on your situation, you may need to file your preliminary notices within the following times:
- Notice of Identification – If you are a sub-subcontractor and do not have a contract with the general contractor or the owner, you must file this notice within 30 days of initially providing materials or labor for the project.
- Notice of contract or subcontract – If you do not have a contract with the owner, you must file this notice after executing the contract.
- Subcontract – You must file a subcontract at the earliest point of the following:
- Within 60 days of filing your notice of substantial completion
- Within 90 days of filing your notice of termination, OR
- Within 90 days of the last time you furnished materials or labor.
Other steps include:
- Filing your statement of account, or the amount due
- Pay any filing fees
- Serve notice on the property owner, if required for your situation
You should note a few things. Your contract need not be formal or notarized but you must have a collection of writings that indicate the basics of a contract. In addition, your contract need not be with the property owner. You may be a subcontractor and still file a mechanic’s lien.
Enforcing your lien
The process of filing and enforcing a mechanic’s lien is complex and detailed, but done correctly, it can help you secure the money your debtor owes you. When you need to enforce your lien, you will have everything you need in place. The experienced commercial collections attorneys at Law Offices of Alan M. Cohen & Associates LLC can help you with your enforcement actions. We have been assisting clients with mechanic’s liens since 1994. To schedule an appointment, please call our office at 508-763-6604 or send us an online message today.