If you’ve gone unpaid for work or materials provided to a construction project in North Dakota, you might be ready to file a mechanics lien, also known as a “construction lien” in ND. Nearly everyone in the construction industry has the right to file a lien in North Dakota. And filing a mechanics lien is an incredibly effective way to protect yourself against non-payment.
This guide will explain everything you need to know about filing a North Dakota mechanics lien, step by step.
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Who can file a mechanics lien in North Dakota?
North Dakota grants lien rights to a somewhat broad array of project participants. This includes your typical claimants such as prime contractors, subcontractors, and material suppliers. But ND lien rights are also available to a number of different “design professionals,” like architects, engineers, surveyors, and so on. Equipment lessors may have lien rights, yet only if they contracted directly with the property owner, or the owner signed the contract between the equipment company and the hiring party.
Furthermore, there are no “traditional” preliminary notices required to secure lien rights in North Dakota. Even though it’s not required, you should send preliminary notice anyway. Preliminary notices provide other useful benefits such as promoting visibility, open communication. Sending preliminary notice can also speed up payment times.
Now that you know if you can file a mechanics lien, let’s dive into how to file your North Dakota mechanics lien.
Step 1: Send a Notice of Intent to Lien
Before you file your mechanics lien claim, North Dakota lien law says you must send a written Notice of Intent to Lien first. You should send this document to the owner of the property by registered or certified mail, at least 10 days before filing the lien claim. This means that, in order to secure the fullest lien protection, the notice must be received no later than 80 days after the last date of furnishing labor and materials.
Step 2: Prepare your North Dakota lien form
Now that you’ve sent the Notice of Intent, it’s time to start preparing your mechanics lien form. You’ll need to be sure that not only you have the right form, but have provided all of the necessary information to ensure your claim gets filed.
Let’s go through all the information you need to gather to fill out the form properly. ND law really only requires about 4 pieces of information. However, if the lien is ever challenged, more detail is better. We’ve provided a few other pieces of useful information to help your cause.
First and foremost, you should provide your (or your company’s) name and address. This may seem simple, but many claimants get their liens rejected for misidentifying themselves. Use your full legal name or the company’s registered business name, along with the designation; i.e. LLC or Inc.
Description of labor and/or materials
You will need to provide a brief statement describing the labor and/or materials you provided to the project. This doesn’t need to be a full, itemized list of everything. Rather just enough to provide a good sense of what you contributed to the improvement or construction of the property.
Description of the property
This section is a bit tricky. The statute merely states that the lien should “describe the property.” So what should you put here? The lien needs to sufficiently describe the property for identification. Well, best practice is, the more information the better; you will only be penalized for not providing enough. A legal description would clearly satisfy this.
Amount of the lien
Here is where you will provide the amount due that is the subject of the lien claim. It’s important to note that the amount to be provided is strictly limited to the difference between the contract price and any payment already made. If there is no contract price, the reasonable value of the work or materials provided. Any attorney’s fees, collection costs, or any other unrelated charges amounts shouldn’t be included. Overstating the amount could potentially make you liable for filing a fraudulent mechanics lien.
First and last dates of furnishing
This requires that you provide the first and last dates that you specifically provided labor and or materials to the project. The first date should be relatively easy, what was your first workday on-site? But the last date may not be as clear. Particularly if you’re filing your claim before completion of the work. If so, provide the anticipated completion date of the contract.
Hiring party information
Provide the name (or business name) and the address of the person with whom you contracted with on the project. This should be fairly easy, as you should already have all of this information, at the very least in the contract documents themselves.
Signed and verified
Once you have provided all the required information, it’s time to sign your lien claim. This should be done right below the verification statement. This is simply a statement declaring that all of the information provided is accurate and true to the best of your knowledge.
Step 3: File your North Dakota mechanics lien
Now that you have your mechanics lien form all filled out and ready to go, it’s time to file. Although this may seem like the easy part, but there are a ton of things that can go wrong when filing a North Dakota mechanics lien. Some of the more common mistakes include:
- Filing in the wrong county/office
- Miscalculating the filing fees
- Missing the filing deadline
Deadline to file a North Dakota mechanics lien
The deadline to file your mechanics lien claim is 90 days after the last date of furnishing labor or materials to the project. This will provide you with full protection of your lien rights. A claim may be filed later, but it won’t afford nearly as much protection. North Dakota is particularly unique, as it allows liens to be filed up to 3 years after the date the first item of material or labor is furnished to the project!
If the claim is filed late, it won’t be valid against any subsequent good faith purchasers or other encumbrances that accrued before filing. Furthermore, the late claim will also be invalid to the extent that the owner paid the general contractor before the lien was filed. Lesson here? File as early as possible.
Where to file a North Dakota mechanics lien
A North Dakota mechanics lien must be filed in the county recorder’s office of the county where the property is located. There are a lot of different county offices that file a lot of different documents. And it’s a good idea to contact the appropriate office ahead of time to ensure that you have everything you need to get your claim filed properly. To make things easier, we’ve put together a list of ND recorder’s offices along with their requirements and contact information.
How to file a North Dakota mechanics lien
Now that you’re ready to file, the last issue is how exactly to get your document recorded. In North Dakota, claimants will have three different options’ filing in-person, filing through the mail, or filing electronically; each with its own advantages and issues.
1. File your lien in person
Going down to the recorder’s office, and waiting in line may seem like a hassle. But this option is your best bet to get your lien claim filed properly. Since you’re actually in the office, any errors or problems can be taken care of on the spot. Not to mention that filing in person guarantees that the claim is filed the same day. When headed to the office, be sure to not only have extra copies of your lien document but a blank check or two as well; just in case you miscalculate your filing fees.
2. File your lien by mail
This is a relatively common option, but it does have its drawbacks. Most notably, the amount of time it can take to get your claim recorded. You have to consider the time it takes to get to the office. Furthermore, there’s the potential backlog that the office may be currently experiencing. Also, if your lien is rejected, the office will mail it back for you to correct and resend. If your back is up against the deadline, then this could be risky. But, if you do decide to mail in your claim, we’d recommend including a stamped, self-addressed envelope with return instructions. That way you can have a certified, filed copy for your records.
3. Electronic recording
Some North Dakota counties do provide the ability to file your mechanics lien online. If so, you will have to register an account with a third party service, and digitally upload your documents. Clearly, convenience is the main advantage here. If this is the route you wish to take, be careful to ensure that the scanned documents are in the right format, and legible.
Step 4. Enforce or release your mechanics lien
If you’ve followed all these steps, then congratulations! You’ve successfully filed a North Dakota mechanics lien, and it’s ready to start working to get you paid. However, payment isn’t guaranteed. There is at least one more step you’ll need to take after the lien is filed.
Option 1: Enforce (foreclose on) your mechanics lien
A North Dakota mechanics lien will only be valid for 3 years from when the lien was filed. You will need to file an action to enforce your mechanics lien in the district court of the county where the property is located and record a notice of lis pendens within that time period. If not, the lien will expire and no longer be enforceable. But this deadline can be significantly shorter if the owner or contractor served a written demand to enforce. If you receive one of these demands, your deadline to enforce will be cut down to just 30 days from receipt of the demand.
However, before you can enforce your claim of lien, you’ll need to send a Notice of Intent to Foreclose. This can be served to the owner either personally at least 10 days before filing the action or can be sent by registered mail at least 20 days prior to filing an action.
It’s important to note that enforcing a lien claim is a full lawsuit. You shouldn’t foreclose without contacting a construction attorney to offer legal advice and guidance through this process. And, depending on the amount in dispute, you may want to ask yourself if a foreclosure is worth it.
Option 2: Release (cancel) the claim
North Dakota doesn’t have specific rules about the release or cancellation of a mechanics lien once you’ve been paid. However, typically payment will be conditioned upon and exchanged for the release of the lien claim. This is simply filing a document in the office where the lien was filed. This should reference all of the lien information, e.g. document number, page number, the date and time it was filed, and a request to release the claim.