Short Answer: Yes, you can usually file a mechanics lien for as little as $1. No, there are not usually any mechanics lien minimums required to file a lien. However, be cautious as specific state rules may vary.
Long Answer: Filing a mechanics lien carries some expense, and so as it is with every type of legal remedy, one examining the mechanics lien remedy must consider whether the “juice is worth the squeeze.” Is the cost of the mechanics lien, in other words, worth it in light of the result you will receive.
Nevertheless, we are often asked the question about whether the lien laws require a debt be a certain amount before the mechanics lien remedy is available. In general, no such minimums exist. While this is the general rule, it is important to consult each state’s laws to verify that it doesn’t have an odd-ball rule restricting small value liens.
In theory, therefore, you could file a mechanics lien in almost every state claiming as little as a single dollar.
When filing a low value claim, however, keep the following in mind:
You May Not Be Able to Foreclosure In Small Claims Court
Even though your lien claim may be lower than the jurisdictional amount in a local small claims court, you may still be restricted from litigating there because most states require mechanics liens be foreclosed in a superior court of more general jurisdiction (since property is at stake). You can read an article we wrote about California law, for example, titled: Can California Mechanics Lien Claims Be Foreclosed Upon in Small Claims Court?
Recovery of Your Costs May Be Available
When filing a lien on a small value claim it is important to be very conscious about your costs. After all, if your costs are unrecoverable and eclipse the value of your claim, there may be little practical reason to proceed with the filing. Your next question after “can we file,” therefore, will likely be “can we recover the cost of filing from the debtor?”
The answer to this question varies greatly from state to state. There are two places where you can find more resources to help you answer this question.
First, on this blog, we have a number of relevant articles about “Lien Costs,” including: What Costs Can I Include In A Mechanics Lien.
Second, on the Levelset Resources page, click on the state where your project is located and read the Frequently Asked Questions for that state. The fourth question on every state page is “Can I include Attorney’s Fees, Collection Costs, or Other Amounts in the Lien Total?”
While it may not make sense to file a lien for just $1, mechanics liens have helped untold numbers of construction companies get paid the money that they were rightfully owed since lien rights were first brought to the United States over 200 years ago. It’s not uncommon for a successful lien claim to be the difference maker for a construction company’s very existence. If your company is facing payment issues on a construction project, don’t waste another second – find out everything you can about the legal rights available to the construction industry to help you get paid.