The right to encumber and ultimately force the sale of somebody else’s property – mechanics lien rights in a nutshell – is a hugely powerful right. Since this right was created by statute, its use and requirements are also governed by statute (and just to be clear, “statute” is the same thing as a law). And, as you may have guessed given the power of the right itself, the requirements can be intricate and complex – and must be strictly followed.
One of the specific rules that must be followed, in every state, is that mechanics liens must be filed within a certain time-period in order to be valid and enforceable. These deadlines are critical. Letting a deadline slip by prior to filing a lien means the difference between remaining secured and retaining your lien rights on one hand, and losing the right to file a valid and enforceable lien on the other.
Given this crucial importance, it’s no wonder that construction participants routinely have questions related to how the deadlines are calculated. The lien deadline itself is generally calculated from either:
- the last day the potential claimant furnished labor or materials to the project
- the last day of the project as a whole
Despite seeming straightforward, however, this can be more complex than it appears. Questions related to what constitutes both the claimant’s own last day, or the project’s completion, can make a simple thing complex. Adding to the potential confusion, these project dates do not always go by the same same, and different states and statutes may refer to different dates by different terms.
Difference Between Date of Last Furnishing and Date of Substantial Completion
When a deadline is calculated in reference to a “last furnishing date” this is usually in reference to the claimant’s own last date on the project. This date is an individual date, not subject to anybody else on the project and/or whether the project may still be ongoing. There can be difficulties associated with determining this date: i.e. whether punch-list, warranty or other remedial work counts to extend the deadline or not; but, the date is not dependent on anybody other than the claimant.
Deadlines calculated from substantial completion are different. “Substantial completion” is generally the substantial completion of the entire project – not the substantial completion of the claimant’s own work. Accordingly, this can be a more difficult date to get a firm handle on, especially if the claimant provided work early in the project lifespan.
Project Completion Date – When It Matters and Why | by Levelset CEO Scott Wolfe
Project Dates – The More You Know!
Knowing what dates mean is crucial to the calculation of deadlines. The calculation of deadlines is crucial to maintaining a valid and enforceable lien. And, maintaining a valid and enforceable lien can be the difference between getting paid or writing off another account. So, know your project dates just like you would know some of the other important dates in your life (you know, like anniversaries, birthdays….that sort of thing). Trust us when we tell you that knowing dates is important, in construction as it is in life!
Free Payment Rights Advisor Tool from Levelset
One of the most important questions about lien rights concerns whether a potential claimant even has the right to file a lien in the first place. What happens if filing a mechanics lien isn’t an option? What are some other actions to take when you’re having a payment issue? We have a free tool that will help you with these questions. It’s called the Payment Rights Advisor. It only takes a couple of minutes — just answer 5 quick questions about your job, and the Payment Rights Advisor will give you all of your best options, including whether or not you qualify for mechanics lien rights.