The construction industry stands with the world as soldiers fighting the ongoing coronavirus pandemic. As you protect your employees, loved ones and yourself from the virus, you must also remember to protect your business. This month’s special edition lien law update includes a small sample of how the pandemic has severely impacted our industry. Now, more than ever, you must protect your right to be paid for the work you do by letting professionals help with all your mechanic lien needs.
FOR THE RECORDER WEBINAR ON CASHFLOW STRATEGIES THROUGH COVID-19 :
County Clerk Offices Across the Nation Unable to Accept Mechanic Liens
The American Land Title Association (ALTA) reports 1,000 of the 3,592 recording offices in the United States are closed or offering limited services because of the global COVID-19 (coronavirus) pandemic. This prevents the filing of mechanic liens and other land record documents from being recorded in land title offices which do not offer electronic filings. This significantly effects those construction companies needing to file mechanics liens to protect their rights to payment. Construction contractors will need to contact each county clerk’s office they intent to file a lien in to learn whether records can be filed and if any filing deadlines will be extended.
Maryland Courts Stop Hearing Lien Foreclosure Cases
Maryland state courts have postponed all non-emergency court proceedings scheduled between March 17th to May 1st. Foreclosures against residential properties to enforce mechanic lien rights is included in the non-emergency proceedings suspension. Maryland state courts will not hold any hearings to enforce a construction company’s right to sell residential property to satisfy debts secured by a mechanics lien. The courts did not address foreclosure of mechanic liens against commercial properties. Construction contractors may still file court actions to enforce lien rights, but the actions will not be processed until sometime after the May 1st suspension period. The suspension order by the courts does not address the issue of whether mechanics lien notice or filing deadlines will be extended.
Ontario Suspends All Mechanic Lien Law Deadlines
In response to the COVID-19 pandemic, the Ontario province of Canada entered an emergency order suspending all limitation periods for an indefinite period. This order includes the suspension of the deadlines for construction companies to file mechanic liens for unpaid invoices. While this order gives construction companies who are unpaid for work performed or materials provided more time to file their mechanic liens, it also delays their ability to enforce their right to be paid. Courts have the discretion to delay or proceed with existing proceedings to enforce mechanic liens filed prior to the order of suspension.
Mechanic Lien Filings No Longer Accepted in New Jersey County Clerk’s Office
New Jersey’s Essex County Clerk’s Office is currently operating with only four on-site employees to comply with social distancing rules imposed to the COVID-19 crisis. Essex County Clerk Chris Durkin said many county services, including the filing of mechanic liens, will be suspended while his office is operating with only a skeleton crew. Durkin explained “filing construction liens are other services that we have also suspended.” Durkin did not give a time period for the suspension. Durkin also did not explain how this effects deadlines to file mechanic liens, but it will likely extend these deadlines to protect construction contractor’s rights to enforce payments owed.