It’s not enough to be right. It’s also important to also have followed all the rules. This is true in most instances, but especially so when it comes to construction liens. All are subject to definitive deadlines and statutorily directed timelines. While the timeframes for filing, enforcing and discharging construction liens varies from state to state, some statutes actually allow for the outright cancellation of a lien. Very recently, an electrical subcontractor on a large commercial job got to find this out the hard way.

Hired to handle the electrical work on a project, the subcontractor ran afoul of the general contractor and was eventually terminated. As might be expected, the electrician filed a lien against the project to protect its interests. Shortly thereafter, it recorded an amendment to the lien to increase the dollar amount actually owed. No further action was taken to enforce the lien by the electrician so the contractor filed a summons and order to show cause as was its option. This gave the subcontractor 20 days to either file an action to foreclose its lien or show cause why the lien should not be vacated or cancelled. Before the 20 days expired, the subcontractor filed a verified response explaining its lien was valid, believing this could be enough to keep its lien alive.

The court was presented with two issues. First, what was the lien date to be used in any calculation—the date of the original lien or the date of the amendment? Because an amended lien relates back to the original lien and does not impact any filing deadlines, it would be the date the original lien was filed.

Next, the court moved to the sufficiency of the filing by the electrician—was it enough for it to have simply filed the verified response? Not really, because though the lien was valid, the subcontractor failed to explain why it did not file an action to foreclose its lien within the required 20 days or why it needed additional time to prosecute its lien. Those were its two options, absent—which the applicable construction law states—the lien would have to be dismissed. There is no wiggle room or opportunity for any discretion by the court. The statute must be strictly complied with. This was bad news for the electrical subcontractor that had a perfectly valid lien but just didn’t follow the rules after receiving the 20-day notice.

This electrical subcontractor is not alone. Many involved in construction, even those who profess some knowledge of the lien laws, are generally unaware that there are valid provisions in certain state statutes that may reduce the common place one-year deadline to enforce a given lien to some shorter period once an appropriate demand is made and not complied with. The electrical subcontractor was required to adequately and fully comply with the 20-day statutory requirements. Not doing so proved very costly.