As a construction professional, you’re probably very familiar with the process of filing a mechanics lien, from collecting the necessary job information up front to sending the notices your state requires. You should have a good business process set up that helps you track invoices and timelines so you can send a notice and file your lien in a timely fashion. Most issues resolve themselves fairly quickly after you file a lien, but not all, so you still need to track the lien after filing it so you can take action or remove it when the time is right.
How long your lien lasts varies from state to state and project to project. At the end of the lien’s life, you must either begin a foreclosure action or extinguish the lien. These timelines can be as short as 6 months or as long as 6 years. You need to know when each different lien expires so you can decide, before that date, whether you’re going to try and collect on the lien.
Looking to Start a Collections Action?
If you’re interested in collecting on a lien, talk to an attorney about what the costs will be and your likelihood of receiving anything from the suit. This will vary on a case by case basis, so you’ll want to sit down and consider the value of the lien, the costs to enforce, and how many other mortgages and liens are on the property.
Most states determine the time a lien runs from either the date the project was substantially finished or labor and materials were last furnished or the date on which the lien was filed. The lien then lasts from a set period of time from this date. These timelines vary by state, type of project, what role you play on the project team, and in some cases, whether you filed a timely extension.
These deadlines are all assuming, of course, that no special situation, like a bankruptcy on the project, has caused the lien deadlines to be suspended. In these cases, not only would you want to file your lien, you want to make sure your claim to payment is reserved through the bankruptcy process as well. It may be possible to negotiate a settlement of your claims even while the bankruptcy is proceeding.
If you’re looking for a legal team that can handle your lien projects in multiple states and or negotiate a solution in a complex situation, reach out to the legal team at National Lien & Bond. With over 30 years’ experience and the network to handle liens and lawsuits in all 50 states, we can be your go-to team to help with every phase of your business, from setting up the best tracking system to keeping you lien filings straight.