Mechanic’s Lien Update–Don’t Include Freebies

 In Mechanic’s Lien Law Updates and News

We are all used to filing a mechanic’s lien for all the unpaid services, both labor, materials and equipment. But during almost any construction project, there are instances in which, for customer relations, you agree to reduce portions of the bill or not include certain items. But if you are not subsequently paid, can you retract those offers and ask for the full amount? The answer is yes.

Assume the following example. You are performing a kitchen remodel and the original plans call for cabinets that are pine–paint grade. The homeowner then changes their mind, after looking at a neighbors cabinets, and now wants to upgrade to maple. You have a big contract, and the increase will only be $1,000. So to make peace, you agree. But the assumption all along is that you will be paid the balance under your contract.

You guess what happens next. You never are paid the balance of the contract and wonder whether you are stuck with the previous concession for mechanic’s lien purposes. You are not. This is because the reduction was on condition that you be paid for the rest of the contract. In the law, this is called bargained for consideration. Your reduction was offered in consideration and upon the assumption you be paid the balance. When this did not occur, you are no longer bound by that offer.

Assume the same example above. In the course of the project, the homeowner mentions they would love to have some of the light switches relocated on the west wall of the kitchen. No big deal, that would probably only cost $500, and you agree to do so again for good customer relations. But as seen from the above, this was in consideration of being paid all that is owed on the contract and if this does not occur, you can now include that back into your mechanic’s lien.

Remember, a mechanic’s lien is for either the contract price or the reasonable value of labor and materials. In both of these instances, you actually performed the very work that is now included in the lien.