The Strength of a Mechanic's Lien
One of my readers asked a very good question in response to a recent blog post. Is the mechanic's lien a stronger item in Massachusetts? The answer to that question is yes, a mechanic's lien is a very effective means for a contractor to put someone on notice of his claim. It will also put a "cloud" on the title of the property, meaning that most real estate conveyances cannot take place once a lien has been filed.
Over the past few years, mechanic's liens I have filed have prevented progress payments for new constructions projects, prevented the sale of houses, and forced others to come to the table and try to settle the dispute.
The only way for a property owner to dissolve a lien without going to court is to post a bond, and as some of my clients have found out, posting a bond can be quite expensive (usually 10% more than the amount of the lien).
Even if the lien is not done properly, one still has to file an action in court to dissolve it, which requires paying legal fees that are frequently not recoverable.
So, in order for a contractor to protect his or her interests, she should file the necessary documents for a mechanic's lien. It is much less costly than filing suit and a very effective means of pursuing payment.
posted by Andrea Goldman @ 1:32 PM
17 comments
17 Comments:
Andrea - I'm a subscriber to your blog and a blogger myself, and wanted to comment about this recent post. I think you really strike a chord with contractors of all sizes with your posts about the strengths of a construction lien - especially by referencing something that is frequently not discussed: even improper liens can be effective.
While it's certainly not an excuse to file a improper lien for an improper person, the point remains that liens cause problems - and precisely the problems that get contractors paid.
I made reference to your post on my two blogs:
http://blog.wolfelaw.com
http://blog.expresslien.com
"While it's certainly not an excuse to file a improper lien for an improper person, the point remains that liens cause problems - and precisely the problems that get contractors paid."
^ very well said.
Contractors should carefully prepare liens in that an improper lien can provide a basis for a claim for a breach of the covenant of good faith and fair dealing (implicit in every contract),prima facie tort( if your jurisdiction recognizes this cause of action) or even a violation of the state Unfair Practices Act which, in some states, carries an attorney fee award and up to treble damages.
Thanks for shaing this great information about contractor with us!
If the statutory period for filing a mechanics' lien has passed, what are the options for a construction company to attempt to collect payment for its good work? Is there another way to file a lien? Like filing suit and lis pendens?
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Andrea
I had a contractor put a mechanics lien on my home but never completed the process (statement of cost of work etc). He never completed the work because I fired him(he was not performing the work properly) and as a way to get back at me, he filed a lien. He never filed the necessary paperwork on the dates required. I have since refinanced my property; this is how I found out about the lien. I was able to go thru with the refi because he did not complete the necessary paperwork by the required dates. My question is; how do I go about getting this lien off the title even though I have been told it is not valid?
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