The Importance of Knowing When Your Lien Period Begins

November 23, 2009

In nearly every state, the construction lien statutes require that claimants record their mechanics lien withing a certain “lien period.” The start of the lien period has a specific beginning date, and the lien period usually extends for a period of days or months from this start date. Mechanic liens filed outside the lien period are typically unenforceable.

Knowing when the end of the lien period arrives is important, but perhaps not as important as knowing when the lien period begins. After all, without knowing the start date, it’ll be impossible for you to calculate the end date.

In most states, the lien period will begin upon the “completion” of the project as a whole, the “completion” of your particular scope of work, or the “last date” you furnished labor and/or materials.

While this may sound like a straight-forward requirement, it is not always so. In many states (if not most states), labor and/or materials necessary to perform remedial, punch list items, or warranty obligations are generally not considered in establishing the completion date or the last date of providing work. Contractors and suppliers, therefore, can theoretically have the lien period begin days, weeks or months before they are off the job.

The problem here is clear: Sometimes, owners or other contractors hold progress payments until the warranty or punch list work is complete. In theory, your lien period could expire before you’re ever “unpaid.”

Knowing when your lien period begins is critical. And sometimes, to preserve your lien rights, you may find it necessary to file a lien before the project is finally complete, and before payment has become a major point of contention. (Read two articles on this issue here: Re: California law and Re: Ohio law).

Our free Lien Pilot helps your company calculate and control lien deadlines. Once you put in the critical date (i.e. date last labor / materials furnished), the Pilot will calculate the due date for your lien in the applicable state and on the applicable project. However, for this calculation to be accurate, it’s important to know when that date is.

Every state’s law is different, and so you should consult the law in your state to determine exactly when your lien period begins.