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Can a subcontractor file a Mechanics Lien after the contractor has been paid in full?

DelawareMechanics LienNotice of Intent to LienRight to Lien

We have a house that was renovated in South Bethany DE and had some work done by a subcontractor electrician who was fired from the job by the contractor. The contractor stated the electrician didn't complete the work properly. Contractor also paid the electrician upfront, per their contract, for parts and services with remaining balance due upon completion. I knew the contractor fired the electrician for poor work. The electrician has sent two letters threatening to put a mechanics lien on our house for the balance of the work he never completed. We paid the contractor the final draw on 6/14/19 and received the certified letter on 6/17/19. Since we are paid in full with the contractor, shouldn't the electrician be going after the contractor? It's beginning to become harassment from the electrician at this point. The letter was sent from his office in MD to the Trustees' house in MD. Any advice would be greatly appreciated.

1 reply

Jul 9, 2019
That's a great question, and I'm sorry to hear you're having to deal with this. Before getting too far along, I should mention that I'm not able to provide you advice on how to proceed, but I can provide some information that should be helpful to you.

First, it's worth mentioning that Delaware is what's called an "Unpaid Balance" state when it comes to mechanics lien laws. That means a sub-tier lien claimant (i.e. someone hired by someone other than the owner) can only file a mechanics lien to the extent that the general contractor on the job has gone unpaid. So, that means if a Delaware general contractor has been paid in full, then that contractor's subs and suppliers aren't able to file a valid and enforceable mechanics lien. Further, mechanics liens can only be validly filed for amounts that are owed but unpaid for the work they've performed. So, a subcontractor who gets fired is not able to file a lien for work not performed or materials not provided - they'd generally be limited to the price or value of the work they did perform.

With that being said, simply because a lien wouldn't ultimately be valid doesn't mean it can't be filed or that it can't cause a lot of headaches and expense. Mechanics liens can generally be filed regardless of whether the claim is actually valid - county recorders offices neither have the authority nor the bandwidth to investigate every claim made. So, a claimant could still pursue a claim even if that claim is ultimately improper.

It can be hard to actually prevent a mechanics lien filing, but explaining to the claimant that they don't have a valid basis for a lien claim might be a good start. Further, if an improper lien is being threatened, it might also be worthwhile to point out that there are penalties that could be in play if the lien is improper or fraudulent. So, showing a potential claimant that they might actually create liability for themselves by filing a lien could help to stop them from proceeding and instead direct their claim at their contractor.

While preventing a mechanics lien claim is hard, there are a number of avenues for removing a lien claim once it has been filed - including bonding off the lien, challenging the lien claim, or even bringing in the general contractor into the dispute to resolve the matter. For more insight on removing an improperly filed lien, here are two great resources: (1) How Do You Remove A Frivolous Mechanics Lien?; and (2) Improper Lien Filed on Your Property? Here’s What to Do. Further, I think this resource might also be helpful: I Just Received a Lien Threat – What Should I Do Now?

Lastly, note that mechanics liens are serious business, so if a lien claim does get filed, it'd be wise to consult a local construction or real estate attorney. They'll be able to assess your circumstances and advise on how best to proceed. Even before it gets to that point - a lawyer could also be helpful in fending off harassment from a claimant.
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