So, it’s clear that mechanic liens must be filed within a prescribed time period in every state, and it’s clear that the time period starts at some defined marker. While not the case in all states, in many states the lien deadlines begin from when the lien claimant last furnished labor and/or materials to a project.

I’ve written about some nuances presented by this trigger date in the past, mostly related to whether punch list work or warranty work will count as a day of furnishing.  See, for example, “The Importance of Knowing When Your Lien Period Begins” and “Think You Know The Last Date You Delivered Materials or Performed Services?  Think Again.”

A few material suppliers have recently inquired with me as to whether their last date of “furnishing” is the date the materials arrive at the jobsite, or the date when the common carrier takes control of the materials if they are delivered to a loading dock FOB?  (Definition of FOB, by the way, available on Wikipedia at this link).

The concept, of course, is that if the materials are delivered to a common carrier FOB, the title will actually pass from the supplier to the prime contractor / subcontractor / owner at the moment it hits the FOB location.  So, does that mean the materials were “furnished?”

Or, are the materials not really “furnished” because they were merely put into the contractor or owner’s name and not yet furnished to the job site itself?  Liens are, after all, claims against the property and not against any specific individual in a theoretical sense…

I think this is a great question, but I honestly cannot find an answer .  What says you?

There is nothing ground breaking about this decision, but it does contain a nice long discussion of the Miller Act’s statute of limitation.  In case you don’t know about the Miller Act’s time limitations, read all about the Miller Act on our blog, or take a look at the court’s explanation here:

An action brought under 40 U.S.C. § 3133, “must be brought no later than one year after the day on which the last of the labor was performed or material was supplied by the person bringing the action.” § 3133(b)(4).

(Remember too that certain parties must also file a Notice of Miller Act Claim within 90 days of last furnishing labor and/or materials).

But knowing this 1-year requirement is only half the battle.  You must also understand what starts the 1-year clock, or in other words, what the law means by “last of the labor was performed or material was supplied.”  Does that include warranty work?  punchlist work?  off-site project close-out work?  The Contracting King court explains:

The majority of circuits that have addressed this issue have held that remedial or corrective work or materials, or inspection of work already completed, falls outside the meaning of ‘labor’ or ‘material’ under [the statute of limitations]. Citing U.S. v. International Fidelity Ins. Co., 200 F.3 456, 459 (6th Cir. 2000).

Long Answer: The experience of applying for and receiving payment in the construction industry is unlike the experience in any other industry. Calculating the amount due requires accurate estimations of work performed, and those estimations are forwarded up the contracting chain where, after they are approved, the payments must flow back down the chain. The process is complex, can be time consuming, and as every contractor or suppliers know, money can leak through cracks along the way.

While money is being passed up and down the chain, the window for you to filed a mechanics lien may be closing. In most states, a mechanics lien must be filed within a specific time period after a company last furnishes labor or materials. This period can be as short as 30 or 45 days in some states.

A mechanic lien may cause money flow problems at the project, and when general contractors allow liens against a project, those contractors are frequently considered in breach of their contract with the property owners. As a result, many on a construction project will ask parties to not file a Mechanic’s lien, promising that payment is soon forthcoming.

There are two problems with these promises.

First, you may not be part of the negotiations between a general contractor and the property owner, and thus don’t know whether payment really is forthcoming. The owner may have a reason for holding payment that is not being communicated to you (workmanship flaw, delay, etc.). The promise to pay, in other words, may be an empty one.

Second, the promise will not slow down your state’s mechanic lien deadlines. We wrote a blog post about this in the past called: Promises To Pay Mean Squat To Your Mechanic Lien Deadlines.

To conclude, filing a mechanic lien is a great collections tool; check out these blog postings about why liening is important. If you’re promised payment on a construction project, it may be worth waiting a little while before filing a lien, but be very cautious about your lien deadline, since promises to pay will not stop the deadline from expiring. And once your lien deadline goes by, so do your liens.

Every state provides contractors and materialmen the right to lien a project, but they also require these parties to file their liens within a certain “lien period.” The lien period always has a beginning point and an ending point…but the question sometimes arises, when exactly does the lien period begin and end?

While this question may seem simple on the surface, leave it to the court system and lawyers to muck it all up.  Depending on the project’s location, the lien period may begin when labor and/or materials are last furnished, or at the end of the entire project. Even more specific – and perhaps, more confusing – the lien period may begin when the work is substantially complete or when its finally complete. Sometimes, punchlist or warranty work will extend the lien period, and sometimes it won’t.

The Michigan Court of Appeals just released an opinion that addresses this question in that state. Commenting on Michigan’s Construction Lien Act, the court of appeals confirmed that the 90-day filing period does not get extended when a contractor provides repair or warranty work to the project.

Here is the rule in the court’s own words, with the most critical language highlighted in bold print:

According to MCL 570.1111(1) and MCL 570.1104(5), a repair completed pursuant to a contract is an “improvement” and the last furnishing of an improvement commences the 90-day filing period. Thus, for example, where a contractor is specifically hired to repair an aspect of the property, such as a nonworking door or a leaky roof, that contractor is making an “improvement” to the property for which the contractor is entitled to claim a lien. However, as this Court held, in Woodman v Walter, 204 Mich App 68; 514 NW2d 190 (1994), the performance of “warranty work” to correct deficiencies in work performed, or defects in fixtures installed, by the contractor does not constitute an “improvement” under the Construction Lien Act because “[i]t does not confer any value beyond the value furnished at the time the initial installation work was completed.” Id. at 69. Therefore, in such situations, “[t]he ninety-day filing period commences on the date of completion of the original installation work and is not extended by the later performance of warranty work.” Id. at 70. The distinguishing factor between a repair constituting an improvement to the real property, which allows for the commencement of the 90-day filing period, and warranty work, which does not allow for the recommencement of the 90-day filing period, is whether the work in question conferred any value beyond the value furnished by the completion of the original work.

The case is Stock Building Supply, LLC v. Parsley Homes of Mazuchet Harbor, LLC, and you can read the full-text of the opinion by clicking on the case name.  Also, check out an article by Walter, Norcross & Judd about the case posted on JDSupra.

Well, as the promise to pay “tomorrow,” turns into “Friday,” and turns into “next week,” the time period available for you to file a mechanics lien continues to tick. And in some instances, the time periods can be quite short.

It’s very important for contractors and suppliers to realize that these promises to pay do not extend the lien period. You only have one shot to file your mechanic lien, and once the window closes, it will never re-open.

So, while a promise to make a payment is a significant comfort (it’s better than an outright refusal to pay), a business should be weary about relying on this promise and foregoing its right to lien. The lien protections will disappear…and your client’s promises? Who knows.

Related articles

• Set Your Mechanic Lien Amount With Care: The Perils of Small Mistakes and Exaggeration (constructionlienblog.com)
• Preserving and Executing Lien Rights Leads to Prompt Payment (constructionlawmonitor.com)
• Your Mechanic Lien Was Bonded…Now What? (constructionlienblog.com)
• I Didn’t File My Lien On Time…Now What? (constructionlawmonitor.com)

The question is this:   What are my legal rights as a contractor if my lien is not filed on time?

The question was asked related to Washington law, but the answer is applicable around the nation.   Mechanic liens are an excellent remedy – and I highly recommend preserving and using these rights when needed.   However, they are not a contractor’s only remedy.

What other rights does a contractor have?  Take a look at my answer here:

Liens are a terrific remedy for contractors. If you’re unpaid and file your lien on time, you acquire security rights against the property itself and are legally able to file suit against parties who you did NOT contract with (i.e. the property owner, if you are a sub).

However, if you don’t file a lien, you still have plenty of legal rights to recover what is owed to you.

Your rights, however, are exclusively against the party who you contract with. You have an action against them for breach of contract. The period to bring this suit is quite a bit longer, between 3-6 years, depending on the type of contract.*

*This is the statute for Washington.  Remember that the statute of limitations will be different depending on your state.

It’s important to contact a great construction attorney to bring a breach of contract suit if you are unpaid, and are too late to proceed with lien rights.    Find a construction attorney in your area at Avvo.com.

What is a trigger date?

Every state provides contractors and materialmen the right to lien a project, but they also require these parties to file their liens within a certain “lien period.”   The lien period always has a beginning point and an ending point…but the question sometimes arises, when exactly does the lien period begin and end?

It’s a surprising complex question, and when liens are filed in proximity to the lien period’s expiration dates, parties may become involved with proceedings to contest the liens validity and the exact beginning date of the lien period.

In many states, the lien period begins with the last date a claimant has delivered materials or services.   Calculating this date, as we previously wrote, can invovle more than expected:

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.

So, what is the “trigger date?”  The trigger date is the date that starts or triggers the lien period.   In most cases, as discussed in this post and the prior post, the start date for a lien period is the date materials and/or labor were last delivered to a job, or the substantial completion of a job.

After you add a project to our Lien Pilot, the “Date Management” section of the page will ask you to input the trigger dates that are important to your construction project.   A screenshot of this portion of the page is displayed to the left.

To calculate your lien deadline for this particular project, you would add the date you last delivered labor or materials.    The system will calculate the appropriate number of days from that trigger date and determine the deadline to file your lien.

But be careful.   As discussed, figuring out this particular date can be tricky in many states.     You’ll want to be extra cautious in determining this date, and to be safe, file your lien with some time to spare.

Of course, to determine the beginning date for your lien period, its best to consult with an attorney.   Lawyers in your state will be familiar with the case law that evaluates that state’s statutes and makes determinations as to what does and what does not constitute the start and end of a lien period.

WHAT!?!?

Well, to help you out, we’ve created some easy to read charts.   You can take one look at this chart and easily figure out when your lien should be filed.    Check out the Texas Lien Deadline Chart here, or the Texas Two and Three Month Notice Deadline Chart here.   These are housed in the Lien Law Summaries Section of Zlien’s website.

But you don’t even have to go that far – you can see the charts right here on our blog:

Texas Lien Deadline Chart

Texas Two and Three Month Notice Deadline Chart

* Original Contractors do not have notice requirements in Texas

** Two Month Notice must only be delivered by lower tier subcontractors and suppliers (i.e. those who did not contract with the original contractor)

*** If on a residential project, every deadline is one month earlier.

Remember, too, that you can keep track of project deadlines using our free Lien Pilot.

It’s easy. You input your project information, and it alerts you to what is due, and when.

This video is a screen-cast of the Lien Pilot system that shows you how to use our system (free) to Lien Smarter, and Get Paid.

Now, I’m the first to tell you that filing a mechanics lien is one of the best methods of collecting construction debt, and it’s certainly important to think about filing a construction lien as soon as you’re faced with a non-paying customer. But, being prepared and qualified to file a lien takes discipline.

If we’ve said it once, we’ve said it a thousand times….lien laws are complex and hyper-technical.   Across the country, lien laws protect contractors and suppliers by providing them the right to lien non-paying projects.   Likewise, though, the laws protect property owners to prevent owners from paying for services twice, or having an improper lien filed against its property.

So, why is filing a mechanics lien a discipline?   Because it starts the moment you sign your contract.

• In many (not all) states, you can actually waive your right to lien before ever providing any services or materials.  If you’re in one of these states, it’s important to review your contract for this type of waiver language.

• Many states require contractors and/or suppliers to deliver a Preliminary Notice to the property owner (“NTO”) before furnishing labor or materials.  Failure to deliver notice, and to deliver it properly, may result in the forfeiting of lien rights.

• Many states require contractors and/or suppliers to deliver a “Notice of Intent to Lien” or similar instrument a certain number of days after accounts receivables become due, or a certain number of days before filing a lien.   Failure to deliver this notice, and to deliver it properly, may result in the forfeiting of lien rights.   (Read about the differences between Preliminary Notices and Notices of Intent here).

• Liens must be filed within a certain time period, and each state is absolutely different.   (Get state-by-state lien deadlines here).   Liens must be filed timely, or they are likely void.

Zlien Helps Your Company Be Disciplined About Liens

Zlien is more than a simple notice and lien filing company (although we’re darn good at this, too).  We were founded to help clear the air concerning the complex lien and notice requirements across the nation.

Here’s how we do it:

• Our Lien Wizard guides you through the notice and lien requirements associated with your role in the project, and the state the project is located.   You tell the Wizard some key information, and it pulls the notice and lien requirements from its database.   From there, you can order the products / documents that are relevant to what you and the law requires.  (Watch a Video on how our Lien Wizard Guides You Through Notice and Lien Requirements).

• We provide you with Free Lien Law Punchlists.   This is a summary of the basic notice and lien requirements of each state.

• The Lien Pilot helps you calculate project deadlines.   For free, you can manage your project data, contacts and important dates.   The Lien Pilot calculates applicable deadlines and filing requirements, and prompts you when they are approaching.

• We do the work for you.  If you don’t want to prepare and send the documents out yourself, or if you just have too many to send and want to focus on running your construction or supply business… Zlien will do all the work for you.  For notices, we’ll print them, mail them, track them, and store proof of their delivery on our secure servers.  For liens and other filed documents, we’ll prepare them, have them filed, and deliver notice to the project’s relevant contacts.