I read a great article from Justin Stark’s Oregon Construction Lawyer blog titled “Lien Foreclosure: Who is a Party?” The article addresses which parties need to be included (and can be included) in an action to foreclose an Oregon mechanics lien.
The answer he gives to this question is funny: “Everyone is invited!” The answer is funny, but definitely true. And while the article addresses the law in Oregon, it is pretty much the same in every state.
Lien Foreclosure is a topic we’ve exhausted here at the LienBlog. Long story short is that mechanics liens are a temporary restriction upon property that expires unless the filing party files an action to enforce or foreclose the lien.
When it comes time to file this foreclosure action, the mechanics lien claimant must be very careful to follow the procedural requirements. It should also be quite interested in filing the lawsuit to make the biggest impact, and influence the parties to pay its claim.
That means making some decisions on who should be named parties in the litigation. For this, state procedural rules typically fall into one of two categories.
Either, like Oregon, they require that everyone who has filed any claims against the project be included in the suit. This is the majority rule in the United States, and it makes a lot of sense. If you have 10 claims against a single project, those 10 claims should be decided in one court and by one judge. A lot of times these claims are caused by cash shortages or problems appropriating money. If ten different courts were left to iron these wrinkles out, it would take forever.
Or, like some of the minority states, each claimant can file its own individual lawsuit against the property owner and the property. This can be good for the claimant b/c it does streamline their single claim against the property owner, and it works great if they have the only claim or one of a very few claims.
It’s important to consult with a construction lawyer in your area when its time to foreclose against your mechanics lien claims, and that’s because like everything else with lien laws, the devil is in the details.