A mechanic’s lien is a valuable tool used to ensure payment for work on a property. However, the adage “better late than never” does not apply to the filing process. Mechanic’s lien statutes have detailed time frames that require strict compliance that many contractors routinely fail to observe. Understanding these requirements before and during construction is a must.
The 90-day filing rule: You may file your lien anytime after you begin work or supply materials. But after you finish, the window closes quickly. You must file the lien no later than 90 days from the last day of the month during which you last worked on the property, and no later than 90 days from the time all work on the property is completed or terminated. For example, if you completed your work on January 15, and the entire project was completed on January 20, you would have 90 days from January 20, rather than 90 days from January 31, the last day of the month in which you last worked on the property. Make sure that you carefully monitor progress on the job site. Early completion, bankruptcy of the owner, or abandonment of the project may also trigger the 90-day rule.
The 150-day “look-back” period: With the exception of retainages, your lien may only include work done during the 150 days prior to the last day of work included in the mechanic’s lien. If you include any work done outside of this period, your entire lien may become unenforceable. For example, if you last worked on January 15 and filed a lien on February 15, your lien could only include work done during the 150 days prior to January 15. On extended projects you may need multiple filings to assure compliance with this 150-day look-back period.
The six-month enforcement period: You must bring suit to enforce your lien within six months from the date your lien is recorded or within 60 days from the completion or termination of work on the building, whichever date is later. Failure to bring suit within this enforcement period will invalidate your lien.
Other considerations: While critically important, timing issues related to filing are not the only steps involved in perfecting a lien. Liens must contain specific information regarding the subject property and interested parties. Liens by subcontractors and liens on residential properties with designated mechanic’s lien agents both have special notice requirements.
The body of mechanic’s lien law is a complex, yet extremely helpful tool to enforce your contract rights. A valid lien may be the key to payment for your work – an awareness of the law enables you to take advantage of its protection.
Stephanie A. Hood