If you’ve gone unpaid while working on a construction project in the Green Mountain State, then a mechanics lien might be exactly what you’re looking for. A mechanics lien is one of the most powerful tools for contractors and suppliers to protect their rights to payment. This how-to guide will provide you with everything you’ll need to know about filing a mechanics lien in Vermont.
Table of Contents
Before you file: Make sure you have lien rights
Clearly, the first step in filing a Vermont mechanics lien is figuring out if you even have the right to file. The answer to this question in Vermont is fairly straightforward. The law says that any person who performs labor or furnishes materials for erecting, repairing, moving, or altering such improvements shall have a lien.
This means that under Vermont law, a broad spectrum of project participants are granted lien protection. This includes general contractors, subs, and material suppliers, regardless of the tier. The only issue that’s unclear is whether design professionals, such as architects and engineers, have Vermont lien rights.
Vermont law doesn’t require you to send preliminary notice before you file a Vermont mechanics lien. However, even though it’s not required, we recommend sending one anyway. Sending preliminary notice provides other benefits that help to speed up payment.
One last attempt: Send a Notice of Intent to Lien
Before you go filing your lien claim, there’s one more cheap and easy step you can take to try and induce payment. This is called a Notice of Intent to Lien. There’s no specific format or state requirement for this notice. It’s simply a letter sent to the owner informing them of your intention to file the lien claim if payment isn’t forthcoming.
This is particularly useful in a state that, like Vermont, has no notice requirements. It informs the property owner that you haven’t been paid, and acts as a good faith attempt to resolve the issue before filing the lien. This notice will typically do the trick. But, if sending a Notice of Intent doesn’t work, then it’s time to file.
Step 1: Prepare the Vermont mechanics lien claim form
Interestingly enough, the Vermont mechanics lien form doesn’t require a lot from you. In fact, the statute only really requires two things:
- The date the payment was due
- The claimant’s signature
Seriously, that’s it! That said, we strongly recommend providing a few other pieces of information to ensure that the claim isn’t challenged. Like any payment paperwork, the more detail you can provide that proves your right to get paid, the better.
Levelset’s forms were created and reviewed by construction attorneys and payment experts. Thousands of Vermont contractors have successfully used these forms to get paid what they’ve earned.
Your name and address
The first step in filling out this form is to provide your information. Be sure to use your full name. Also, if filing on behalf of a corporation, you should provide the full, legal name of the business.
Property owner information
The mechanics lien, although it attaches to the property and not the owner, for recording purposes you’ll still need to include the property owner’s information. If there’s more than one, be sure to include all of them. If this isn’t readily available, learn how to find the property owner’s information for a construction job.
Identification of the property
A full legal property description isn’t required. But then again, it doesn’t hurt. Some town clerk’s offices may require this, and there’s no harm in putting too much information. For more information on how to find this, you should read our guide to finding the legal property description.
Here you’ll need to add the amount due that is the basis of the lien claim. This amount shouldn’t include any attorney’s fees or any other unrelated amounts in the claim. Do not overstate the amount due! Claiming too much can make you liable for filing a fraudulent lien claim.
Description of labor and materials provided
Since this isn’t necessarily a requirement, you don’t need to add too much here. However, adding a brief statement describing the labor and/or materials you contributed to the project will make proving your claim easier if someone challenges your lien.
Last date and date payment was due
First, you’ll need to provide the last day that you furnished labor and/or materials to the project. In addition to that, you’ll also need to provide the date that payment for the last work became due. That’s because the deadline to file a Vermont mechanics lien is measured from the due date. If this is unknown or hasn’t happened yet, then leave this blank. The lien will cover the remaining unpaid contract price.
Sign and notarize it
Lastly, it’s time to sign your lien claim. But be sure you wait to sign until you’re in front of an attorney. A Vermont mechanics lien must be notarized in order to be considered valid.
Step 2: File your Vermont mechanics lien
Once the mechanics lien form is all filled out, it’s time to file your claim. This may seem simple, but there are still a few different things that could go wrong. Here are some of the more common mistakes when it comes to filing your lien claim:
- Incorrect filing fees
- Filing in the wrong town or office
- Not realizing backlog and turnaround time and filing late
- Missing the deadline because the first claim was rejected
Where to file the lien
A Vermont mechanics lien form needs to be filed with the town clerk’s office in the town where the property is located. It’s critical that you file your lien in the right town or city office. In addition to that, be sure to contact the office ahead of time. Each office will have its own specific formatting requirements and filing fees.
View a list of Vermont county offices, including filing requirements and fees.
Deadline to file
Unfortunately, the deadline to file a lien claim in Vermont is a bit uncertain. The law states that in order to have a valid lien claim in Vermont, the claimant must file their statement within 180 days after the payment became due for the last labor or materials furnished to the project.
The problem with this statement is that it’s unclear whether this means when the claimant’s payment becomes due, or when the last party performing work on the project’s payment becomes due. In any case, the safest option would be to start counting from when your payment became due.
How to record the lien
Once you’re ready to file, you need to figure out how you’re going to actually deliver the lien to be recorded.
Filing your lien claim in person is typically the best bet. By physically going down to the office, you’re ensuring that if there are any mistakes or complications, they can be handled right there in the office. Plus, filing in person guarantees that the claim is filed that same day. If deciding to file in person, it’s a good idea to bring multiple copies, along with an extra blank check in case you calculated the fee incorrectly, or need to add another page at the last minute.
Another option is to mail in the mechanics lien claim. If you decide to go this route, you’ll need to give yourself ample time for filing. If your deadline to file is near, it’s best to go in person. That’s because many claimants fail to account for the time it takes for the mail to reach the office, and then the potential backlog of documents that the clerk has to process. Even worse, it’s common for a claim to have a mistake, or for the wrong fee amount to be included. That means the clerk will need to mail your claim back for you to correct and refile.
When sending the lien claim by mail, make sure to verify how much the filing fees are. Also, you should include a self-addressed, stamped envelope with return instruction if you’d like to retain a copy for your records.
What happens after you file a Vermont mechanics lien?
If you’ve followed all of these steps, then congratulations! You just successfully filed a Vermont mechanics lien, and it’s already working to get you paid. But just because the lien has been filed, it doesn’t mean there’s nothing left to do. In Vermont, a mechanics lien only lasts for 180 days. Within that time, you’ll need to take some action before the lien expires and is no longer enforceable.
Option 1: Enforcement (foreclosure) action
The deadline to enforce a Vermont mechanics lien depends on whether the payment was due at the time the lien was filed. If the payment was due, then the deadline to enforce is 180 days from when the payment became due. However, if the payment wasn’t due yet at the time of filing, then the deadline to enforce is 180 days from when the claim was filed.
Keep in mind that a foreclosure action is a full-blown lawsuit. Lawsuits can cost valuable time and money. If this step is necessary, be sure to contact a local construction attorney for some guidance and legal advice.
If you aren’t quite ready to file a lawsuit, there’s one more option to take. Similar to the Notice of Intent to Lien, you can send a Notice of Intent to Foreclose. This is like a final warning letter stating that if no paid within x amount of days, then you are willing and able to enforce your lien rights in court.
Option 2: Release (cancel) the mechanics lien
This is the option to use if you get paid within the 180 days. There are no specific statutory requirements or procedures for releasing a lien claim. But, if you’ve been paid, this is just good industry practice. Besides, the owner whose property was liened will likely only agree to pay if you release your lien claim. The process is simply filing a document in the same office where the lien was filed stating that the claim has been satisfied.