What if Your Mechanic’s Lien is Invalid?
No one is perfect, and there are occasions in which after filing your mechanic’s lien, it has to be withdrawn or released. For example, you may get a demand letter from the owner’s attorney insisting the mechanic’s Lien be released, primarily on procedural grounds. For example, it was recorded too late, does not have sufficient information, or is otherwise invalid under statute.
If you decide to release the lien, do you have any other avenues for collection of the mechanic’s lien? Absolutely. In most states, you have 3 to 5 years to sue for breach of contract, account stated, common counts, unjust enrichment, or other causes of action. You can bring a lawsuit in Superior Court against the party you have a contract with, assuming they are still solvent.
Be very careful when you release your mechanic’s lien. It should include the following statement: “This release is made solely for the reason that the mechanic’s lien below described has allegedly expired. The lien claimant reserves its rights to make a claim for the monies owed under a cause of action for breach of contract as well as other related causes of action. As such, this release shall not be considered an acknowledgement of payment on the debt.”
That way you have at least preserved your rights to sue for breach of contract.