Can You Include Lost Time and Inconvenience in Filing a Mechanic’s Lien Claim?

 In Mechanic’s Lien Law Updates and News

Unfortunately, you cannot.  All states have a basic rule, namely a mechanic’s lien is only for the actual labor and materials furnished to the site.  There are some gray areas, including impact damages for delay and extended overhead, but these are difficult to prove and usually only apply to larger commercial projects.

Take Ed for example. The last thing he wants to do is file a Mechanic lien.  He has just renovated the upstairs bathroom for a homeowner for a total bid of $15,000.  With no legitimate excuse, the homeowner refuses to pay the final $5,000.  He is then bombarded over a two month period with a series of six separate punch lists—almost all being trivial and transparent excuses for nonpayment.  But in order to satisfy homeowner demands, he spends 50 hours traveling back and forth, replacing and exchanging bathroom fixtures, offering freebies to satisfy the complaints, and coordinating with staff in efforts to redo items. He wants to file a mechanics lien for these losses.

Oddly enough, these are hours that directly impacted his profit and overhead, or lack thereof.  At the end of day, he ended up making nothing on the project and now wants to be able to recoup some of that lost overhead and staff time by including it in the principal reflected in such a mechanics lien.  Unfortunately, no state will allow this.

The solution? If you have substantially completed the project, you have the right to hold firm on the punch list. Only fix those items that are clearly needed and ignore the rest. Insist that the balance be paid in full, less 150% of the cost to hire another contractor (which you can estimate) to fix the items that genuinely need to be fixed.  If the homeowner does not agree, hold off on any further work. If non-payment persists, file your mechanics lien.