Payment problems are all too common in the construction industry. Slow payment (or even lack of payment) must be dealt with, with frustrating regularity. With complex pay apps, pay-when-paid or pay-if-paid clauses, and workmanship disputes it seems like the obstacles standing between construction companies and the timely payment that they have earned and deserved are nearly endless.
To protect against the frustrating issues related to payment and cash-flow, and to virtually guarantee payment on every project, there are powerful legal tools to help construction participants get paid fairly for the labor and material they furnish. These tools – called mechanics liens – are built into the law of every state, and work to get construction companies paid fairly.
Mechanics lien can work in many different ways to get you paid, but most importantly they work. Mechanics liens give the claimant an interest in the improved property itself, which provides a strong incentive to the interested parties to pay, and empowers construction participants to recover the money they’ve rightfully earned.
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Filing a Massachusetts Mechanics Lien
If you have decided to file a mechanics lien in Massachusetts, this step-by-step guide (starting in the next paragraph, below) will break down the entire process for you. Before wading directly into the deep end of lien filing, though, it’s important to keep in mind that there may be preliminary notice requirements, and there are always and timing requirements that must be met prior to filing a valid Massachusetts mechanics lien. It can be a complicated and time-consuming task to file a mechanics lien by yourself, but if you want to take the plunge and you’re ready to file, just follow the steps below to start the lien process.
Video Summary of Filing a Mechanics Lien in Massachusetts
Make Sure Your Massachusetts Mechanics Lien Has the Required Information
It is important to make sure that your Massachusetts mechanics lien contains all of the statutorily required information. Since mechanics liens are created by statute, they are subject to strict compliance, and failing to provide the required information on the lien claim isn’t just a simple mistake – it can invalidate the entire lien. It’s obvious, then, that it’s crucially important to make sure the proper information is obtained and included on the lien document.
Massachusetts mechanics liens are a two-part filing, with a notice of contract (or notice of subcontract) required to be filed and verified first, and a statement of the amount due filed after.
The required information is set forth below.
Notice of Contract:
- Date of Contract;
- Identity of property owner;
- Identity of contractor;
- Description of the property where the project is located;
Notice of Subcontract:
- Date of Contract;
- Identity of hiring party;
- Identity of claimant;
- Description of the property where the project is located;
- Amount of contract at time of filing notice of subcontract as set forth in the following manner:
- Contract Price _____
- Agreed Change Orders _____ (indicate whether addition or subtraction)
- Pending Change Orders _____ (indicate whether addition or subtraction)
- Disputed Claims _____ (indicate whether addition or subtraction)
- Payments Received ____
- The regular mailing address of the party recording or filing this notice is as follows
Statement of Amount Due:
- A just and true account of the amount due or to become due him, with all just credits,;
- A brief description of the property;
- The names of the owners set forth in the notice of contract;
- While not specifically mentioned, it is a good practice to include the name and address of the claimant, and the labor or material furnished to the property, as well.
Special Note Regarding Signatures on Massachusetts Mechanics Liens
Massachusetts law was amended in 1996, and the language stating that a Statement of Account was required to be “signed and sworn to” was removed. The law now requires that a “just and true” statement be filed in the registry of deeds in the county or district in which the land lies. Accordingly, it appears that a Massachusetts mechanics lien is not required to be notarized in order to be valid.
How To File a Massachusetts Mechanics Lien
Now it’s time to get your Massachusetts mechanics lien filed.
- Prepare notice of contract or subcontract form (as applicable), taking care to include the necessary information as set forth above, and sign the document.
- Determine whether the property is “recorded land” or “registered land”.
- If it’s recorded land – it’s most likely the notice can be e-recorded. This makes the process easier, but you must make sure to send the notice to the parties after it is recorded by mail.
- If its registered land the requirements are different. Registered land is very particular. Call the registered land recording office for the county to verify where the notice must be sent. Registered land is completely separate from recorded land, so watch out to make sure you’re sending it to the correct office! Send the pre-recorded notice, and a check for the proper fees to the registered land office, along with a self-addressed stamped envelope for a returned recorded copy. When you get the recorded copy back, send to every contact via first class mail.
- Prepare the statement of account, taking care to include the necessary information as set forth above, and sign the document.
- Follow the steps above for recorded land or registered land as applicable.
- Remember, the proper recording fees must be included with the lien. Liens are often rejected for improper fees (even if you provide too much money). Any delay caused by needing to resubmit the lien for recording takes time – and since liens are time-sensitive documents, it can possibly result in a missed deadline. Recording fees can be determined by calling the applicable recording office, checking on the office’s website, or asking in person if you physically bring the lien for filing.
- Note that your lien document must also comply with any specific margin requirements that particular county recorder may have – these can also be determined by calling the recorder’s office.
- Massachusetts only requires that the lien must be served on the property owner in certain circumstances – see more below.
For more background on registered vs. recorded land, here’s a great article from Deeds.com.
How To Serve a Massachusetts Mechanics Lien
As noted above, Massachusetts only requires the lien to be served in certain circumstances.
General contractors are not specifically required to serve the lien on the property owner, but it may be best practice to do so. All parties who do not have a direct contract with the property owner must serve a copy of the lien on the property owner. To accomplish this, it is sufficient to send a copy of the lien to the property owner by certified mail, return receipt requested.
Just because the service of the lien is not statutorily required in all circumstances doesn’t make it a good idea to rely on the filing of the lien without other notice to the owner, however. Since the point of the lien is to get you paid, it is always best practice to make sure the property owner (and everybody else up the chain from you) is served a copy of the lien itself.
Congratulations! Once the lien document has been filed (and served on the owner in certain circumstances as described above) – your Massachusetts mechanics lien is ready to get you paid what you’ve earned. While this is a powerful tool to get you paid, this may not be the end of the road.
It’s still possible for the lien to be challenged, and even determined invalid. Or, you may be forced to enforce your lien claim through a foreclosure action (filing a lawsuit) – which, like any judicial proceedings, can be a time-intensive and expensive process.
Remember that just because a lien is recorded doesn’t necessarily make it valid, and likewise, just because a property owner (or their attorney) may make a claim that it is improper and needs to be removed doesn’t make it invalid.
Finally, a Massachusetts mechanics lien stays effective for 90 days from the date the lien was filed.
Recording a mechanics lien can be a powerful tool in making sure you are paid what you earned. The How-To guide above can empower you to take that step when and if it becomes necessary, and make sure you are treated fairly.
Download the Massachusetts Mechanics Lien Guide