Contractors & suppliers have strong lien rights in New Mexico. If a contractor or supplier isn’t paid on an New Mexico 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 Mexico’s mechanics lien law.
1) Contractors Must Be Licensed to File a Valid New Mexico Mechanics Lien
New Mexico mechanics lien protection is pretty broad. Licensed contractors, subcontractors, as well as material and equipment suppliers that have participated in the contributed to the construction, alteration or repair of a property are all entitled to mechanics lien rights. While design professionals including surveyors, architects, and engineers all have lien rights as well, the design plans must be used in order to file.
However, New Mexico has strict licensing requirements. If the claimant is required to have a license by the Construction Industries Licensing Act, the claimant must be licensed in order to claim a lien. Further, an unlicensed contractor may not be able to file suit to recover any money owed even without the protection of a lien. And finally, if a contractor is unlicensed it may be possible for the property owner to request a return of the money already paid.
2) Be Aware of Two Different Deadlines to File Depending On Project Tier
There are two different deadlines to file a mechanics lien in New Mexico. For general contractors, the deadline to file a mechanics lien is 120 days from the completion of the project. Subcontractors, and other parties without a direct contract with the property owner, only have 90 calendar days from the completion of the project in which to file a New Mexico mechanics lien.
While it is not required that a copy of a New Mexico mechanics lien be sent to the property owner after recordation, a party without a direct contract with the property owner may send notice of the lien to the property owner in an attempt to eliminate a possible defense that the owner has paid the full contract amount to the general.
3) New Mexico Has Very Specific Preliminary Notice Requirements
The conditions in which preliminary notice are required in New Mexico are very specific. New Mexico only requires a preliminary notice to be sent under certain conditions. Preliminary notice must be given when: 1) The claimant does not contract directly with the property owner or the general contractor, AND 2) The claim is more than $5000, AND 3) The project is NOT on a residential property with less than 4 dwellings. All other parties are not required to send preliminary notice but may send a notice of intent to lien if desired, in an attempt to facilitate payment.
When required, a preliminary notice must be sent within 60 days of the first date that service or materials were provided on a project.
4) Attorney’s Fees May Be Awarded in Lien Foreclosure Action – But Only to Successful Claimant
While not included in the mechanics lien document itself, attorney’s fees will be awarded to a lien claimant in a successful enforcement action. Interestingly, the award of attorney fees in a successful enforcement action may not be reciprocal to the property owner in New Mexico. If the property owner is successful in defeating the mechanics lien claim in a foreclosure action, the unsuccessful lien claimant may not be held liable for the property owner’s attorney’s fees.
5) A Legal Property Description Is Not Required
A legal property description is not required when filing a mechanics lien in New Mexico. Instead, the lien simply needs to include a description “sufficient for identification” of the property. Clearly, a full legal description is sufficient to identify the property, and if available, may be used. As a guideline, the description should be sufficient for a stranger to identify the property (at the exclusion of other properties). In the case of residential property, a municipal street address may be sufficient to identify the property for the purposes of filing a New Mexico mechanics lien.