When cleaning services, janitorial services, or other similar services struggle with getting paid on a job, can they file a mechanics lien?
Determining who has a mechanics lien right is often very tricky. Sometimes, as is the case with general contractors, trade subcontractors, and material suppliers, the answer is obvious. But there are many nuances, such as the case for construction managers, equipment providers, landscapers…and cleaning services!
This is a commonly asked question. For example, this Florida cleaning service wonders whether they can use lien rights to assure payment for a janitorial contract against a belligerent owner refusing to pay. In a counter-example, this New York company performs cleaning services for homeowners to remediate smoke and water damage.
This post will explore how to evaluate whether your cleaning services have lien rights protection or not.
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Was the Work Performed on a Construction Job…or Not?
Most mechanics lien statutes provide parties the right to file a mechanics lien on construction projects of some sort. This means that, right off the bat, if you’re a janitorial service company with a payment problem, unless that problem occurred while you were working on a construction project, then you’re probably not going to have the right to file a mechanics lien.
Therefore, simply cleaning a facility as part of an ongoing, commercial cleaning contract will most likely not qualify as a construction project, and that means no lien rights. However, if a company is paid to clean up the mess from demolition, or to provide cleaning services at the end of a construction job to transform the jobsite into a useable “broom clean” space, then that is something that might qualify for lien rights protection.
Generally speaking, the “is it on a construction job or not” test is useful. But, like so much else with mechanics lien laws, the final answer will come down to a case-by-case determination.
Determining your specific lien rights will require you to examine the mechanic’s lien law in the state where you performed the cleaning services.
Was your work an “improvement” to the property?
Every state’s mechanics lien law dictates “who can file” a mechanics lien. In some states, the law is really, really specific and strict. In other states, the law is general and more liberally distributed. The more liberal a state’s mechanics lien statute, the more likely it is that you’ll have the right to file for cleaning services.
When you evaluate whether cleaning services is covered by your state’s law, you’ll likely find yourself examining how the law defines an “improvement.”
Most states allow you to file a mechanics lien if your services “improved” the property. Many states go further, and require the services to creates a “permanent improvement.” Here are a few examples.
In Florida, for example, §713.01(15) defines an “improvement” as “any building, structure, construction, demolition, excavation, solid-waste removal, landscaping, or any part thereof existing, built, erected, placed, made, or done on land or other real property for its permanent benefit.”
California, however, gets even more specific, as per §8050’s definition of “work improvement” as including but no limited to “(1) Construction, alteration, repair, demolition, or removal, in whole or in part, of, or addition to, a building, wharf, bridge, ditch, flume, aqueduct, well, tunnel, fence, machinery, railroad, or road. (2) Seeding, sodding, or planting of real property for landscaping purposes. (3) Filling, leveling, or grading of real property. (b) Except as otherwise provided in this part, “work of improvement” means the entire structure or scheme of improvement as a whole, and includes site improvement.”
Are you scratching your head?
Don’t feel bad. As it turns out, lawyers get into rows and fights about how to actually apply these definitions. And, from time to time, they squabble about cleaning services.
Consider this 2011 case from a Florida court considering what type of cleaning services could be for a property’s “permanent benefit” versus not. In Parc Central v. Victoria Group, the Florida Third District Court of Appeals explains:
[T]he only other state court our research revealed to have considered an analogous factual circumstance, concluded the services provided in that case—cleaning of stairways, washroom grouting, and sealing of washroom walls—were not lienable under that state’s mechanics’ lien law…opin]ing] that “[w]hile mere maintenance of property is non-lienable…cleaning the mess of demolition and construction is lienable…
Which, of course, brings us back to the “is it on a construction job or not” test.
Should a cleaning service use lien rights to collect on unpaid accounts?
Okay. It can be confusing to figure out if you have lien rights as a cleaning service. And, perhaps, it will not even be perfectly clear. So, let’s get down to the brass tacks: Should you use lien rights or not?
First, consider how “remote” your argument is. If you are a janitorial service that cleans an office space 3 times a week, your chances to use lien rights for that contract is pretty remote. You may benefit by threatening a lien from time-to-time, but in large part, you should consider yourself without lien rights.
If your work is on or is closer to a construction job, then you may add lien rights to the mix of your remedies when thinking about improving your cash flow and getting paid.
Second, consider using tools like “notice of intent to lien” documents as a way to straddle this issue. As explained by construction attorney Matthew Viator, “it’s worth noting that because mechanics liens are such a powerful remedy, the mere threat of a lien is often effective to speed up payment. Even whenever a claimant might fall into a grey area and it’s not particularly clear whether lien rights are present, sending a Notice of Intent to Lien can grab the attention of an owner or an insurer and speed up the process of getting paid.”
And you can always ask a construction attorney about your specific circumstances.