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Filing a mechanics lien (provided all the necessary prerequisites have been met) can virtually guarantee payment on a project. Like anything else, an ounce of prevention is worth a pound of cure, and if the cure is necessary, then follow-up is required.

THE BEST MECHANICS LIEN IS THE ONE THAT NEVER NEEDS TO BE FILED

While mechanics liens provide strong protection against nonpayment, and in some cases are necessary in order for a contractor or subcontractor to get paid, they are an antagonistic document that can have a significant impact on all parts of a project – not just the problematic parts. Construction payment is complicated and prone to problems, but clear communication throughout the project and collaboration can avoid many payment issues. Contractors need to make sure they, and others on the project, are visible as the first step to avoid a damaging lien claim. They should provide continual updates on work progress, maintain an open line of communication in order to avoid payment delays and ask to be notified if payment or other issues on the project are unavoidable.

In the event that a payment problem is so severe that it cannot be solved without making use of the lien option, getting the most out of it requires additional some work beyond the filing itself.

What to Do After Filing a Mechanics’ Lien

Send the mechanics lien to everyone. After filing a lien, send a copy of the lien to every interested party on the project. In many cases, state law requires the lien to be served upon certain parties, such as the property owner or the general contractor. It also helps to send copies of the mechanics lien to other potentially interested parties. Contractors should always send the lien to the property owner and the party that hired them, even if not specifically required to do so. Some of the power behind a mechanics lien is that it gets multiple parties involved with the debt.

Call the person most likely to pay and then call the property or project owner. Whatever their position regarding payment was before, the lien filing may have shifted their perspective towards payment, and it pays to find out. Explain to the property owner that if whoever is responsible for payment does not pay, it will be necessary to enforce the lien against them directly.

Send a letter warning of foreclosure. Nobody wants to lose their property – making that a possibility can prompt some action. A simple letter like the template below is usually fine:

Dear Sir or Madam:

Having not received payment for the services furnished to [name of project] construction project located at _______________, [name of company] company filed a mechanics lien against the property. Attempts to collect this debt from relevant parties following this filing has thus far failed. Please be advised that [name of company] intends to proceed with foreclosure of this claim if payment is not arranged within the next seven (7) days. At the end of any such action to foreclosure, a judgment may be rendered against the property in the amount of the mechanics lien claim plus attorney’s fees, costs and interest and the property may be sold to satisfy the claim.


File a foreclosure lawsuit. Mechanics liens are usually resolved prior to an enforcement lawsuit, but when nothing above works, foreclosing on the lien claim is necessary. Mechanics liens have expiration dates – an enforcement lawsuit must be initiated within a certain period of time, or the lien becomes unenforceable and basically worthless. Know the deadline for filing a lawsuit and hire legal assistance.

While avoiding a mechanics lien is always best, sometimes people don’t do what is right and need some pressure to make it happen. In these circumstances, a mechanics lien can be a good bet if the right amount of effort is put forth.

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