Mechanic’s Liens Based on a Change Order
No one would doubt for a moment that a mechanic’s lien can be filed for unpaid labor and materials under a base contract. But as our attorney has told us, he has yet to see a job ending up in court that did not have the contested issue of one or more change orders. If work is done pursuant to a change order and unpaid, can this be included in the filing of a mechanic’s lien? Even more specifically, what if the change order is not in writing?
It is common for the contract between the general and the owner as well as the subcontract between the general and the sub to have a change order provision. Typically it states change orders must be agreed to by both parties and reduced to writing before the work begins.
That is all well and good, but a rarely occurs. In many cases, extra work is directed by the design professional, owner, or general, with a statement it will be reduced to writing later. Many times, the performing party sends the written change order and it stagnates on someone’s desk to be signed.
Fortunately, under the rule of waiver and estoppel, if for example a subcontractor is directed to do the work with the promise that the change order will be reduced to writing but never is, the other party is estopped from asserting the defense that the change order was not put in writing. If the work is actually performed, this will entitle the sub to file the mechanic’s lien form.
Sample Form. As a cautionary measure, you might consider including this clause in your contracts:
“Change orders shall be in writing and signed by one of the owners, but if the contractor is directed to do the changed work and does so, with the owner not signing a change order, the writing requirement is waived and extra compensation is nevertheless allowed.”