Filing Mistake Invalidates $12.4 Million Mechanics Lien

Mechanic lien laws are highly technical, and they frequently change in unpredictable ways  (see recent controversial example from Washington).   We’ve expressed the sentiment a hundred times on this mechanics lien blog – it’s very easy to make a common lien mistake.

Unfortunately for JE Dunn Construction Co., it seems someone may have really dropped the ball filing its $12.4 Million mechanics lien.   The developer of a stalled West Edge project in Kansas City now claims the construction company’s mega-lien has a mistake that invalidates it.

When it comes to filing a mechanics lien, sometimes you only get one chance to get it right. Depending on the merit of  the developer’s claim, JE Dunn Construction Co. may have gotten a very frustrating and expensive lesson about the technical nature of mechanics liens.

From the press, it looks like the lien would have converted the debt from an unsecured claim into a secured claim in the bankruptcy proceedings pending on the West Edge project.   Without the lien, the claim falls to an unsecured one, making collection a lot less likely.  That makes this lien mistake one of the country’s most expensive.

What Could Have Went Wrong?

What could have went wrong with the mechanics lien, you ask?   What kind of mistake could invalidate such a big claim?

Funny enough, the biggest claims in the world can be invalidated by just the simplest and most technical oversight.  Here are examples of common filing errors that could have cost JE Dunn Construction Co. its secured claim:

• Poorly Identifying the Property: Most states require the use of a legal property description, and others require specific descriptions of the property.   In every state, the requirement is technical, and a lien can be invalidated because of an inadequate description.  (See article about describing properties on mechanic liens).
• Signing Mistakes: Mechanic liens must be signed in a particular way.   Some states require they be notarized, some states require a verification with specific and statutory language.  The smallest waiver from these requirements can result in the mechanics lien being invalidated.  (See article on Washington lien invalidated because of verification error)
• Not Sending Notice:   Some states require notice when you begin work.  Some states require notice immediately before filing a mechanics lien.  Some states require notice immediately after filing a lien.   Failing to deliver this notice, can forfeit your mechanic lien rights.  (See blog posts about preliminary and other notices)

Who is Filing Your Mechanics Lien?

Express Lien is not a law firm, and let us be the first to tell you that if you are about to file a $12.4 Million mechanics lien, you have no business filing it without the counsel of a qualified and experienced construction attorney.   That is big money, and it’s certainly worth spending a few thousand dollars on counseling.

However, there are occasions when it doesn’t make financial or practical sense to hire an attorney to file a mechanic’s lien.  That’s when we really shine.   And some law firms - like this one in Georgia – have even recommended using a lien service to file a construction lien in the right circumstances.

What’s great about our service?   Take a look at this page which explains why you trust choose us to file your mechanics lien.

Our service is licensed, insured, bonded and experienced.

Our Pricing Structure Leads the Industry in Simplicity

You only have so long to file your preliminary notice or mechanics lien.   You shouldn’t waste any of that time trying to figure out how much the filing is going to cost you.

Express Lien leads its industry in providing a simple and transparent pricing structure.

Here are two features that distinguish us from the competition:

(1)  Our fees are published for you to see, and each product has a single flat fee.   This flat fee includes it all – postage, service, delivery, storage of all deliverables online, etc.    You’ll never be charged any other amount because of fine print.

(2)  Each of our products has a flat fee, and it applies across the country.     A mechanic lien cost $295 whether its in Louisiana, Washington, Maine, Georgia, Texas or New York, or anywhere else for that matter.

The more you file, the cheaper we are.    You can view our pricing structure on the Pricing Page.    Or, check out our Pricing Table below:

All prices include:

• Filing Fees and Postage / Delivery Costs
• Property research to obtain legal property description
• Property research to obtain public record owner of property
• Free tracking of your orders on our Lien Pilot
• Free storage of all order documents and information on the Lien Pilot
• Calculate deadlines through the Lien Pilot associated with filing / delivery of your document

We Can Help You Lien Smarter – And We Guarantee It

A deal is not a deal until… their check clears the bank.

Express Lien understands the mechanics of getting paid within the construction industry, and that full and final payment is a challenging aspect of your business.

Express Lien’s full service guarantee offers peace of mind.

In the event, your company is paid before the lien document is recorded within the county, we will refund your money! Express Lien loves to hear about you getting paid.

Therefore, you can make the deal with Express Lien and if your deal produces payment before the lien is recorded……that’s a good deal for us, too.

Place the order. Make payment happen.

Our Pricing Includes All Postage, Fees and Other Expenses

When deciding on a lien and preliminary notice filing company, price is clearly a key concern.    One thing you want to investigate is whether prices charged by other lien and notice companies includes the cost of postage, filing fees, courier expenses and other miscellaneous charges.

Nearly every document carries certain expenses.   A mechanics lien, for example, has a filing fee ($30-100), the cost of delivery ($5-40), and the cost of delivering notices of the lien to one, two or more parties ($5-25).    Notices must be delivered according to statutory specifications, which can cost between $5-10 if sent via ordinary mail, or $30-60 if served personally.

Express Lien’s flat fee pricing is all-inclusive, meaning you pay our low flat fee for a document and nothing else.   See our detailed pricing schedule here.

In addition to covering the expenses of each filing, outsourcing your lien, notice and other filing requirements to Express Lien saves your comany time, and provides your company with an independant department that can focus exclusively on your lien and notice needs.

Get started now.

Filing A Lien Is A Discipline, and Not A Knee-Jerk Reaction

You’re a contractor, subcontractor or material supplier, and you’re unpaid on a project.   Instantly, your thoughts focus on the mechanics lien concept.  It’s the natural law in the construction industry.

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.

Express Lien Helps Your Company Be Disciplined About Liens

Express Lien 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…Express Lien 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.

New York Requires Service of Liens – Do You Have The Required Proof?

In New York, both public and private liens require just a little more than its mere filing.   According to New York Lien Statutes, they must also be served upon a number of parties, served in a particular and specific fashion, and proof of the service must be filed along with the lien itself (or within 30 days of filing).

You can learn about the mechanics of filing a mechanics lien from this great Avvo.com article:  Filing a Mechanics Lien in New York.

So, maybe you’ve purchased a lien form online or at your local Office Depot, or even downloaded the form on our website for free (its right here).   Filling it out and filing at the county recorder’s office is quite simple, and may not be too much trouble.   But, are you then prepared to properly deliver it to all the required parties?  And to execute an affidavit of delivery?  And to go back to the recorder and timely file your proof of delivery?

The time and detail required for these tasks can be overbearing.

And sometimes, as was indicated in the post about South Carolina’s service procedures, the process can be complicated.

At Express Lien, we file liens across the country day-in and day-out.  In New York, the cost of your lien filing includes delivery to all the required parties, maintaining proof of the delivery, and filing the proof of delivery with the recorder’s office.

You give us the key information, and we do the rest.

Plus, our industry-leading lien management and compliance system provides your company with the following at no charge:

• Manage project data and project contacts in web-based Lien Pilot
• Calculate lien deadlines
• Read the notice and lien requirements for your specific project
• Get lien law alerts when laws change in the states where you work
• Your lien documents and proof of service are stored online in your free account.

Who Is Filing Your Lien? Express Lien Does All The Work And Gives You Online Access

What makes Express Lien different?

We Do All The Work: You go to our Wizard and give us the project information.   From there, Express Lien will get the legal property description, prepare the lien or other form, file the document with the proper recorder and send out notices of the filing.

You can also watch videos about how the Lien Pilot and Lien Wizard works here.

Unique Online Access:   Unlike any other lien filing service in the nation, Express Lien gives our clients a unique Web 2.0 control panel.   From the client portal – which we call the Lien Pilot – clients can review order details, check on order status, view and download files associated with the order, and even place new orders for the same or new projects.

You can also watch videos about how the Lien Pilot and Lien Wizard works here.

We’re Licensed, Bonded, Insured & Experienced: This was the subject of an entire blog post in and of itself, and you can take a look at it here.

Washington Law Protects Contractors from Dangers of Frivolous Lien Statute

A quick word from the construction law case files:

The Court of Appeals, Division 1, out in Washington state, has refused to deem a construction lien as frivolous based upon the complexity of the construction contract at dispute. The court in SD Deacon Corp. of Washington v. Gaston Bros. Excavating, Inc., decided back in May of this year, that the state’s “frivilous lien” statute, coded under RCW 60.04.081, requires a more in-depth analysis of factual circumstances surrounding the substance of the contract and the lien.

The court in SD Deacon further reasoned that a court can only evaluate in a frivolous lien proceeding are, by way of example, whether the lien was properly filed, signed by the proper party, properly served, and meets the statutory form requirements. Issues of substance of the lien (i.e. the contract amount, amount due or change orders) are issues which require more substantive proceedings to analyze factual circumstances.

Because the frivolous lien procedure codified in RCW 60.04.081 does not provide for such proceedings, a party seeking to extinguish a lien filing will be unsuccessful in attempting to show to the court that the lien was frivolous.

Essentially, the court’s new rule is that the “lien must be so devoid of merit that the claim has no possibility of succeeding” and that “there must be findings supporting the conclusion that the lien is invalid beyond legitimate dispute.”

The Court’s ruling provides some hope for “fringe” contractors who’s claims hold some element of uncertainty, but who desperately need the security provided by a lien in order to collect payment from an uphill contractor or owner.

The frivolous lien statute was enacted to prevent fraudulent claims against contractors, by awarding successful parties attorneys fees. The ruling in the case shows that the award of fees will not be granted unless your lien fails to meet statutory form requirements.

Express Lien, Inc. has the knowledge and experience to meet these stringent requirements. Let us help you ensure your lien’s success!

Construction Lien Blog added to ABAJournal Website

Since 2007, Express Lien has been in a leader in construction legal document preparation, and has published the Construction Lien Blog, commenting on our services and construction lien information and news.

We’re pleased to learn that the Construction Lien Blog has been recently added to ABA Journal’s BLAWG directory, and can be found here:  http://www.abajournal.com/blawgs/construction_lien_blog/.

ABAJournal.com is the Web site of the flagship magazine of the American Bar Association, and provides the public with an extensive listing of legal blogs from law firms, attorneys, legal journals and consultants.

The term “BLAWG” is used in the legal industry to describe “law blogs,” and is specifically derived from combining those two words.

ExpressLien’s Construction Lien Blog becomes one of just 30 blawgs nationwide delivering information in the “construction law” category.  To see summaries from all 30 blogs, click here.

Express Lien Is Getting Smarter All The Time

With 2009 now underway, Express Lien is excited about the launch of new features and services that will help contractors Lien Smarter in these tough economic times.

The web and service improvements include:

The Lien Wizard: Our new lien wizard helps contractors choose which documents to file on a project, and to provide us with the information we need to prepare your instruments.  The wizard helps you Lien Smarter today…and its getting smarter everyday.

The Construction Lien Blog:   Our new blog address where we’ll blog about lien laws across the country, and any changes in the country’s lien laws.

Talk to us on Twitter:  Keep up with Express Lien’s services on Twitter, where we tweet about lien laws, construction news, Express Lien services and more.   http://www.twitter.com/expresslien

We File Notices, Lien Cancellations, Liens, Public Liens and More.  If it’s a legal document that applies to your construction project – we prepare it, file it, send it and save it.

Client Login & Lien Management:  Our clients can now login to the Express Lien website and manage all of their projects and lien documents, and since we save all of their information online:  place new orders quicker than ever.

Help! Our new “How Express Lien Works” page guides visitors through our website, our wizard, our lien management software and more with instructional manuals, videos, and other help documentation.  Don’t forget, you can always contact us via email or live chat, too.