I'm taking night classes and I've already answered the question but my professor wants more options. If a contractor files a mechanics lien and receives partial payment, what can he do to full payment NOW?
1 reply
May 6, 2020
There are a number of steps that can be taken after a mechanics lien has been filed, including sending a Notice of Intent to Foreclose. Levelset discusses steps for getting paid after filing a lien here: The 4 Steps to Take After Filing a Mechanics Lien. As for partial payment - deciding what to do with a lien after it's been paid can be a tough call, as discussed here: Mechanics Liens and Partial Payment: What Are the Options?
Generally, a claimant won't need to release their lien claim just because their customer offers or gives partial payment of the claim. Though, if you've agreed to settle for a lesser amount, then a lien release would be necessary after the agreed-upon amount is received. So, the lien could still be leveraged into final payment. And, that leverage can help to push an owner or customer to enter into entering into a payment plan on the debt or securing the debt outside of the lien process. Levelset discusses some mechanics lien alternatives in the following article, and releasing a lien may be more tolerable with these remedies in place: Don’t Want to Lien? Here Are 5 Other Options.
Finally, keep in mind that South Dakota mechanics liens have an incredibly long shelf life. South Dakota lien claimants don't have to make a decision on whether or not to enforce their mechanics liens for 6 years after their last furnishing date. Meaning, there's typically no rush to make a decision on a lien claim one way or the other if you don't want to. And, entering into a long-term payment plan could be an option while leaving the lien in place.