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How Early Should You File a Mechanics Lien?

 In Mechanic’s Lien Law Updates and News

Few contractors want to jeopardize the job by filing a mechanic’s lien to early. If you are a subcontractor, for example, you want to make sure the owner and the general are in good faith taking the steps to pay. And it may be politically unwise to jump the gun on a project. But still you have to protect your rights.

But be careful. Many states have what is called an “owner’s defense”. Namely, once the owner on a residential or commercial project pays the general contractor under the contract, with approved change orders, subcontractors and suppliers are not entitled to file mechanic’s liens for an additional amount. This is to prevent the owner from paying double.

But it is a fundamentally unfair to the subs and suppliers when the money does not filter down to them.  There is only one solution: file your notices and mechanic’s liens as early as possible. That way there may still be funds not yet dispersed by the owner, together with the retention. This will stop the owner from paying the general as soon as that is received. Or alternatively, simply send a demand letter notifying and identifying yourself as an unpaid sub. This can do wonders as far as the owner requiring lien waivers before the next payment is made.