Strategy, Legal & Operations

Navigating the lien process: Answers to common questions

As a contractor, you have certain rights that assure you are paid for the materials, services, and labor you provide to real property.  Asserting your lien rights allows you to force the sale of a property you’ve worked on in order to recover your money.

There are many rules associated with perfecting and foreclosing on your lien. The failure to follow these rules could render your lien unenforceable. As a lawyer who specializes in mechanic’s lien issues, I’m often asked to explain the complexities of lien laws. Here are some common questions I receive and the answers you should know:

How do I lien a job with multiple contracts?

In many states, you must record a separate lien for each direct contract that the owner has with the contractor. For example, you are required to file two liens if you have one contract with the owner for construction and one for repair work, even though it’s the same structure or property. This is one situation where you don’t want to take a shortcut. If you file only one lien to address various direct contracts, you could lose your lien rights.

Can an owner or general contractor shorten the time I have to sue on my lien?

Yes.  In many states, the lien law has a procedure to significantly reduce the time a lienor has to sue on a lien.  For example, in Florida, an owner can record a Notice of Contest of Lien which reduces the time to sue from one year to 60 days.  They could even reduce it to 20 days if they serve a 20 Day Summons to Show Cause.  All such documents contain warnings, so if you receive any notice that says it impacts your lien rights, you must take action immediately.

What is a sworn statement of account?

Various states’ laws allow an owner or general contractor to serve a formal request for a sworn statement of account that requires you, the lienor, to indicate how much you are owed and who you may owe money to.  The statement is usually sent through certified mail and includes a warning that if you fail to respond under oath within a specified time period (often 30 days), you will lose your lien rights. Make no mistake, if you don’t respond within the designated time or provide a false or fraudulent statement, you will lose your lien.

Pro tip – Sometimes you may receive a request for sworn statement of account via email, which may be improper service under your state’s laws.  However, you should still respond as if it was served correctly.  The reason is two-fold: One, providing this information may increase the likelihood of getting paid.  And two, if the matter is litigated, you will reduce your legal fees by not having to argue to a judge (who may not know the intricacies of the lien law) whether service of a request was proper or not.

Do you have to provide a final contractor’s affidavit?

Yes, in many states, a contractor’s final payment affidavit is a critical document. If you don’t provide the affidavit with your request for final payment, you will not be able to enforce your lien rights. The affidavit must list all lienholders under your control and note whether those lien holders have been paid in full or not, as well as any amount still due.

When can you file a claim of lien?

A claim of lien may be recorded any time from the start of work through a specified period after last furnishing labor or materials. That specified period varies by state (in Florida it is 90 days), so make sure you check local lien laws.

Pro tip – Most states’ timing is based on calendar days.  So when counting, include weekends and legal holidays, except when the last day falls on a weekend or legal holiday.  For example, if the 90thday falls on a Sunday and Monday is a legal holiday, then it would rollover to Tuesday.  That said, you should always avoid waiting until the last minute.

Can I amend my claim of lien?

Once you’ve recorded a lien, many states allow you to amend your lien as many times as you’d like as long as you’re amending it within the original required number of days.  For instance, in Florida you can record your lien on day 27, amend it on day 35, and amend it again on day 89. But whatever lien exists on the 90th day from the last day of work on the job is what will be used throughout the course of any litigation associated with your claim.

Are you familiar with your local lien laws? If not, you may be jeopardizing your ability to get paid for your work. To protect your rights, talk with a local lawyer who specializes in construction liens.