we have Purchase order for $15,000.00 but have done additional work & billed over contract amount and customer has not given a change order. Can we still file a lien on amount over contract amount?
1 reply
Feb 20, 2020
Change orders should be made in accordance with the contract. And, if the contract doesn't provide specific guidance as to how change orders should be made, then change orders should at least be made in writing and signed by the property owner. That way, there's little doubt as to whether the contractor will be entitled to be paid for those changes. That's also true when trying to determine whether work done under a change order will be lienable - the more official the authorization for work, the easier it is to argue the work is lienable.
With that being said, if there's documentation that will back up the value of the change orders which go above and beyond the contract price, and if it can be shown that the owner did authorize the work performed as change orders, then a claimant may be able to include those amounts in their lien. Further, if possible, demanding that a customer provide a change order, or even drawing up a change order and providing it to the customer for signature could help to establish a lien. Though, if the job is a home construction contract, it may be easier for an owner to argue the lien is invalid for exceeding the contract price.
Recovering payment without filing a mechanics lien
Of course, before deciding to pursue a mechanics lien, keep in mind that there are some other recovery options which should help to force payment.
Sending something as simple as an invoice reminder can help to recover amounts that are owed but not paid. Or, escalating the issue by formally demanding payment could help, too - that can help to put a hard deadline on when payment must be made, especially if there are legal threats looming. And, keep in mind that the mere threat of a lien claim - like with a Notice of Intent to Lien - is often enough to compel payment. Nobody likes dealing with a mechanics lien claim - and customers will usually do what they can to make sure a lien isn't filed against their property.