Lien and notice deadlines are some of the most thought about and worried about dates on a construction project – at least when it looks like there may be payment issues. And, there is good reason for that. Mechanics liens are very powerful tools to protect against nonpayment in an industry that struggles with many payment issues. However, in order to qualify for that powerful protection and retain the ability to file a valid and enforceable mechanics lien, there are several timing requirements and deadlines that must be met.
A potentially frustrating aspect of the process of compliance with these deadlines is: what if there’s a backlog at the recorder’s office when you attempt to have your lien claim recorded? Or, what if your document is mishandled or lost in the the recorder’s office before it can be recorded?
In other words, what happens if you get your lien claim to the recorder’s office “with plenty of time to spare,” only to have your claim miss the deadline due to a problem at the recorder’s office?
Best Practice – Avoid This Issue!
Well, how’s that for some expert advice! The answer here, the industry best practice is: just don’t do it! Thanks Levelset! If only I’d thought of that myself…[sarcasm alert!]
But in all seriousness, the consequences of missing deadlines are significant and can be deadly to a lien claim. Is there anything more important than getting paid? Knowing how important lien deadlines are, the best thing you can possibly do is avoid this scenario altogether.
And, since there are numerous ways to avoid the issue, worrying about recorder’s delays can be a thing of the past with a little bit of forethought.
In order to avoid the potential problems related to delays by recorders, there are several steps that can be taken:
- Don’t wait until the deadlines are about to expire to send your lien document to be recorded;
- Use electronic recording whenever possible;
- Use a courier, or walk your lien into the recorder’s office yourself instead of sending it through the mail, FedEx, or some other delivery.
Construction: No Place for the Procrastinator
Clearly, the best option is to provide yourself an appropriate amount of time to get the lien recorded. The closer you get to the deadline, the more likely it is that any potential hiccup could result in an untimely, and thus, invalid or unenforceable, lien.
It’s not just delays at the recorder’s office or potential mishandling that could result in a missed deadline, too. Problems with margins, formatting, recording fees, the cover page, or more could all result in a rejected lien that would need to be resubmitted. Resubmissions take time, and the more time taken, the more likely a missed deadline will follow.
There are many reasons (some of them are even good) that a lien deadline may be approaching rapidly when the decision to file is made. In these cases, claimants should utilize option 2 or 3 from the bulleted list, above.
While e-recording is the generally the quickest way to get a document recorded, not all counties are set up for it, although the number is growing all the time. If e-recording isn’t an option, it pays to physically walk the lien in for recording, either by yourself or through the use of a courier, rather than relying on mail.
These tips are all well and good, but what if you still find yourself stuck in this mess?
Is This a “Late” Recording?
When the lien gets to the recorder’s office within the appropriate deadline, but isn’t recorded until after, what happens?
The answer here is, “it depends.” (I’ll bet the regular readers of this blog just knew that answer was coming!)
In some cases, the lien can be marked as received on a certain date and that date used as the date for recording purposes. However, this is not necessarily a general rule, and it may not help anyway.
In order to determine if the document was “recorded” on the date of receipt, despite the delay, the document itself can be examined. Many times the document will have a stamp providing the date and time of recording.
Other times, the document will have an instrument number or book and page that can be used to look up the recording information. If the corresponding date is the date of receipt, the recording is not late.
However, in may cases lien claimants are also required to serve a copy of the recorded lien on the property owner within a certain specific deadline, some of which can be very short. If the backlog was significant, even if the lien was “recoded” prior to the deadline, a copy of the recorded lien may not be received to be served before the deadline for service expires.
While the first possibility was at least potentially able to result in an enforceable lien, the other option is just bad all the way around. If the actual recording is past the deadline the lien is late, it doesn’t matter when it was sent to, or received by, the recorder. Or whether it’s the recorder’s fault (or at least not your fault) that the document didn’t get recorded when it was received. And, if it is recorded late, it is going to be unenforceable. As noted above, the deadlines governing mechanics liens are strict, and missing a deadline to get your mechanics lien recorded invalidates the lien claim.
Because of the foregoing importance of not missing the lien deadline, it’s crucial that the lien makes it to the recorder with an appropriate amount of time in which to get recorded prior to the deadline expiring. Whether that’s by being more proactive regarding deadlines, or using a quicker delivery/recording method – the end result needs to be the same. Get the lien recorded on time, or lose the opportunity to enforce.
Looking for deadlines for public projects?
Check out our article Bond Claim Deadlines in All 50 States.