Mechanics Lien Strategy–When is the Project Really Complete?
Here is a scenario that occurs more often than not. As a general contractor or sub, you have completed the project. Not only that, but the construction services have been performed within the contract, plans and specifications, as well as industry standards. You are now owed approximately $25,000 and no matter what you do, you cannot get paid.
Instead of launching right in with a mechanic’s lien, you have exercised due patience. This has consisted of phone calls, emails, and generally trying everything you can to legitimately collect this debt. But there is one problem. You have stalled along the road and now the time is expired to record your mechanic’s lien.
Take for example California. As we all know, you only have 90 days after completion of the project to record your lien. Because of all your efforts to collect, it is now past the fourth month. Does that mean that you have no chance of recording the mechanic’s lien?
Remember that in most states, the time is not extended if you do warranty or or call back work. In other words, redoing what you have already done. But in most states, the time doesn’t start ticking for your mechanic’s lien if you have additional work to be performed, however small, including change order work. So it may be that your 90 days has not yet expired.
Probably unworkable is the idea of going back and unilaterally performing additional work without the owner’s consent. This rarely occurs.
But there is one other possibility. You can take the position that your contract included taking care of any punch list work. You could alleging in your mechanic’s lien that completion has not yet occurred because you have made yourself available to correct any punch list work if this comes up from the owner. Although it is not a guarantee, it might get you over the hurdle of recording mechanic’s lien and negotiating payment.