Contractors & suppliers have strong lien rights in Vermont. If a contractor or supplier isn’t paid on an Vermont 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 Vermont’s mechanics lien law.
1) There is No Restriction on Which Tiers Can File a Vermont Mechanics Lien
Vermont mechanics lien law allows broad protection regarding who can file a mechanics lien. The law includes any party who furnished labor or materials in the “erecting, moving, or altering improvements to real property under contract with the property owner, owner’s agent, contractor or subcontractor of owner.” There does not appear to be a limit on which tier of subcontractor can file a lien, but it is unclear on whether design professionals – such as architects and engineers – can file a lien.
2) The Deadline to file a Vermont Mechanics Lien is a Little Bit Unclear
The deadline to file a Vermont mechanics lien is a little unclear. It is stated that the deadline to file a lien is 180 days from the date on which payment became due and payable for the last furnishing of labor or materials. While it sounds fairly clear, there is some confusion over whether the 180 days starts from the date of which payment became due for the claimant’s last furnishing, or if the 180 days is calculated based on the date payment became due for the last party to furnish labor or materials to the project. While the deadline may be ambiguous, it may be considered best practice to file the lien within 180 days of the date payment became due for your last furnishing, rather than for the last furnishing of the project. This way, you are sure to be within the timeline of the project as a whole, and are not in danger of missing the period to file a valid lien.
3) No Preliminary Notice Is Required
It’s generally rare that no preliminary notice is required, but conveniently, that is the case in Vermont. Of course, a project participant can always send a purely informational preliminary notice, or a notice of intent to lien in an attempt to procure payment, and it may be a good idea to do so.
4) A Project Participants Signature Is Required on a Vermont Mechanics Lien
Vermont technically requires very little information to be included on the face of the mechanics lien. The only information actually required by statute to be included on the lien is the date the payment became due and the claimant’s signature. While not required, it is best to include the legal property description or some other identification of the property, for indexing purposes. It is also a good idea to include a description of the work performed and the party for whom the work was performed.
5) Notice that the Lien Was Recorded Is Not Required
In Vermont, there is no requirement to send notice to anyone that the lien was recorded with the town clerk. However, it is generally advisable to send notice that the lien was recorded to the hiring party and property owner in order to facilitate a payment.
A Notice of Intent to Lien in Vermont may be enough to push for payment