We have talked about the many ways mechanics liens can get you paid. Sometimes, however, litigation may become necessary and you will need to file a lien enforcement action. If litigation is necessary, however, many statutes provide some additional protection to the lien claimant. Mechanics liens can entitle you to attorney fees and other costs if your action to enforce the lien is successful.
Successful Claimants in Mechanics Lien Enforcement Actions Rarely Foot the Bill
Mechanics lien claims puts pressure on parties to pay you in many different ways. The looming specter of being on-the-hook for amounts in addition to the amount claimed to be due is another form of pressure. Many states will include attorney fees, interest, and court costs in an award to a successful claimant in a lien enforcement action, and some states go even further and allow for collection costs and other expenses to be recovered. The longer an owner and/or general contractor fights a valid mechanics lien, the more expensive it may ultimately become. In some cases, an attorney fee award can be larger than the amount originally claimed to be due. Given this possibility, and the fact that time may be working against them, owners and/or general contractors are much more willing to negotiate and resolve underlying payment issue quickly.
Know the Difference Between Being Awarded Attorneys’ Fees in Court, and Claiming Them on the Face of the Lien Claim
Like in any other scenario in the construction world, there are certain issues and pitfalls you need to be aware of when trying to recover additional costs such as attorney fees or filing fees. There is a huge difference in being awarded attorneys’ fees by the court pursuant to a successful enforcement action, and claiming some amount for attorneys’ fees not he face of the lien itself. In fact, it can be a determining factor in whether the mechanics lien is even valid. Many states specifically limit the amount appropriate to be claimed due on the face of the lien to the actual value of the work performed / contract amount. By overstating the lien claim to include an amount for attorneys’ fees, a lien claimant may be playing with fire.
Other Ways A Mechanics Lien Works To Get You Paid
The fact that many states’ mechanics lien statutes allow for a successful claimant to recover attorneys’ fees puts more pressure on parties to pay the amount due, and can take the sting out of being required to initiate an enforcement action. But, these are not the only reasons a mechanics lien can be a good solution to getting you paid. Some other reasons are set forth in our Free Guide to the 17 Ways A Mechanics Lien Works To Get You Paid. The full list of these mechanics lien effects are as follows:
- A mechanics lien encumbers the property
- A mechanics lien gets the lenders attention
- A mechanics lien gets the owners attention
- When mechanics liens are filed they cause contracts to get breached
- More parties become obligated to your debt
- A mechanics lien sets a firm deadline
- You can always fall back on the property for payment if you filed a mechanics lien
- People will pay you to avoid dealing with the mechanics lien
- Mechanics liens are hard to challenge
- Mechanics lien claims help when parties file for bankruptcy protection
- Mechanics lien will effectively freeze money flow on a project
- Mechanics lien claims may force parties into favorable joint check agreements
- Lien claims may entitle you to attorney fees and other costs
- Mechanic liens escalate the situation and prioritize your debt
- Mechanics lien claims may affect a contractor’s bonding ability
- Lien claims affect relationships
- Mechanics liens creative leverage