5 essential things to know about New Hampshire mechanics liens
Contractors & suppliers have strong lien rights in New Hampshire. If a contractor or supplier isn’t paid on an New Hampshire job, they can turn to filing a lien to speed up payment and protect themselves. However, there are specific requirements and rules that must be followed. Here are 5 essential things you need to know about New Hampshire’s mechanics lien law.
Most project participants are eligible
In New Hampshire, mechanics lien law states that general contractors, subcontractors, laborers, and material/equipment suppliers, are entitled to mechanics lien rights. In contrast, sub-sub-subcontractors (likely) and suppliers to suppliers (definitely) do not have rights.
Though not mentioned explicitly by statute, equipment lessors (within 2 tiers of the general contractor) probably have mechanics lien rights. Prior to January, the law was fuzzy on whether or not professional designers (architects and engineers) could file a New Hampshire mechanics lien, but after a recent amendment, it has been determined that they do have that right.
A mechanics lien in New Hampshire is not required to be notarized.
The deadline is simple
The deadline to file a mechanics lien in New Hampshire is 120 days from the date that a project participant last contributed labor or materials.
It's important to be timely when filing preliminary notice
Preliminary notice is required for all project participants not in direct contact with the property owner. Though there is no mandatory deadline for sending preliminary notice, the earlier the better! Because the lien is only worth the amount the property owner owes the general contractor at the time preliminary notice is served sending the notice early is crucial. The Preliminary notice is not required to be sent by any particular method, but since proof of delivery should be obtained, sending via certified mail with return receipt requested may be advisable.
New Hampshire may allow some fees to be included in the lien
In most states, a mechanics lien consists of the unpaid contract amount. However, in New Hampshire, it’s unsettled as to whether mechanics liens may include profit and overhead (if included in contract amount), interest, finance charges, attorney’s fees, court costs, breach of contract (consequential) damages. The law here is unclear so it is not guaranteed.
Mechanics liens usually take priority, but there are some exceptions
New Hampshire mechanics liens generally have priority over pre-existing liens and other encumbrances. The two instances where mechanics liens may not take priority are a tax lien or a pre-recorded conventional mortgage.
Conventional mortgages take precedence when:
– The mortgage was recorded prior to the project participant providing labor or materials
– Proceeds were given to subcontractors and suppliers
– There is an affidavit from the borrower, a disbursement from the lender is for completed work, and all subcontractors and suppliers have been paid for their share of such work, or will be paid with the disbursement
Sending a Notice of Intent can push for payment before a Mechanics Lien is needed