Mechanic’s Lien–Can You File Too Early?
We are all familiar with the strict time limitations in recording your mechanic’s lien. So for example, if you have to file it within 90 days after completion (this is an example only), many people wait until the last moment to do the recording in the clerk’s office. But is this a good idea?
It is highly recommended that the mechanic’s lien be recorded sooner instead of later. A good guideline is if nonpayment has not been made within 30 days of completion of the project.
The reason is that the longer you wait, the more of a chance the owner has made full disbursements under its contract to the general contractor. If you are a subcontractor recording your lien after all disbursements have been made, there is little money left to pay you. But if you file early, the owner could very well withhold payment from the general contractor and pay you directly.
Even worse, some states have what is called the “owner’s defense”. This means that as soon as the owner pays everything on his or her contract, there is no longer an obligation to satisfy any mechanic’s liens from subcontractors or suppliers.