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Can I exercise Lien rights if material isn't on site?

If we have done a prelim on a job (if required), and they put the project on hold and for whatever reason the material is not on the jobsite- we have been instructed to pick it up, or it is at the supplier's warehouse, or we haven't shipped it all yet- can we still exercise our lien rights? Looking at CA, NY, NJ, TX - projects have been put on hold even though we have already had to order/pay for/ can't return material and it is club specific and the customer is not willing to pay for it.

5 replies

Mar 26, 2020

In California, a material supplier acquires lien rights on a project only to the extent material is actually incorporated into the job, unless the material was specially manufactured for the project.

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Mar 26, 2020

No, I'm sorry but you can't lien for materials that aren't actually used unless they were custom materials that can't be used on another job. You can still sue the person who ordered the materials but you can't file a lien against the property.

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Mar 27, 2020

Generally, specially fabricated materials that aren't actually incorporated into the job site won't be lienable. However, in some states, a lien for those materials could be allowable or might at least fall into the grey area. Though, if the material isn't even delivered to the job site, things may be less optimistic. It looks like Cathleen and Peter covered California above, but let's take a look at New Jersey, New York, and Texas. Additionally, keep in mind that Levelset has this handy resource available: Specially Fabricated Materials and Mechanics Lien Rights – An Overview.

New Jersey

Unlike New York and Texas, the New Jersey mechanics lien statute doesn't specifically address specialty or manufactured materials. Further, the statute doesn't seem to provide protection for situations where materials aren't actually furnished or delivered to the job site. It might be arguable that lien rights should be available - but, at least based on the text of the lien statute, that might be an uphill battle.

New York

Regarding New York projects - mechanics lien rights will exist for materials manufactured but not actually delivered to the project site. § 3 of the New York mechanics lien statute reads, in part: "materials actually manufactured for but not delivered to the real property, shall also be deemed to be materials furnished."

Texas

Texas is also very clear about allowing mechanics lien rights for specially fabricated materials, even if those materials don't make it to the job site, as laid out explicitly at § 53-023 of the Texas Property Code. Note, though, that a Notice of Specially Fabricated Materials must be sent to preserve those lien rights (and, this notice is sometimes combined with other "preliminary" notices at the start of a job).

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Mar 31, 2020

Thank you. These are custom made materials specific to the club requesting them.

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Mar 31, 2020

The real question here is how custom are the materials? Can they be used by you or by others on another job? If so you're probably out of luck.

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