Contract With General Contractor
If you have a written contract with a person who has a written contract with the Owner of the property, then you must timely.
Record your Notice of Contract at the appropriate Registry after the signing of the written contract, before or after the completion date stated in your written contract, regardless whether you finished the work in the written contract.
You must mail the Owner a copy of your Notice of Contract by certified mail return receipt requested. You should also send a copy to the General Contractor by certified mail. Record your Statement of Account at the Registry. You should also send the Owner and General Contractor a copy of the Statement of Account by certified mail.
Massachusetts Mechanic’s Lien Newsflash or He Who Hesitates Is Lost
The “new and improved” Massachusetts Mechanic’s Lien in 1996 gave suppliers, contractors and rental equipment companies 90 days from the date that work was last performed to record a Notice of Contract. So you thought you could safely wait 90 days to record the lien to secure your money.
On December 30, 2003, the SJC ruled that where the GC had abandoned the job and was terminated prior to the date the subcontractors recorded their lien and notified the owner, the subcontractors could not collect from the property owner using a timely filed mechanic’s liens. This case, Bloomsouth seems to stand for the proposition that where a general contractor defaults or abandons the job prior to substantial completion, the subcontractors and suppliers bear the risk of loss, not the owner, unless the subcontractors previously recorded a Notice of Contract and previously notified the owner thereof.
The Court held that because the GC willfully by abandoned the project, it lost any rights it may have had to further payment from the owner.
So what can you do to protect yourself?
Timely and proper notice is key. Whether you are a general contractor, subcontractor or supplier, we strongly suggest that you record the Notice of Contract at the outset of the job and notify the owner thereof. This may help protect you against the owner’s favorite defense: “We have already paid the GC in full so your mechanics lien is worthless.”