Home>Levelset Community>Legal Help>Exaggerated Mechanic's lien.

Exaggerated Mechanic's lien.

First question is. Lien was filed more then 1 year ago, contractor never filed legal action. What to do now, how to remove/ release lien in Minnesota. Secondly the lien that was filed is exaggerated by at least $7,000+. What action i can file as property owner against lien holder? Will it be in small claim or district court? What is the name of litigation, is it putative damages? I found this statement below on your website. "if a lien is exaggerated under the definition in Lien Law § 39, the lien will be declared void, and “damages may be awarded to the owner or contractor that can include (i) the costs of any bond; (ii) attorney fees; and (iii) “an amount equal to the difference by which the amount claimed to be due or to become due as stated in the notice of lien exceed the amount actually due or to become due thereon.”

1 reply

Jul 18, 2019

Good questions. First, let's look at the deadline for enforcing a Minnesota mechanics lien (and what happens when it's missed). Then, we can look at amounts that may be included in Minnesota liens. And, finally, we'll take a look at challenging a filed lien.

Minnesota lien enforcement deadline
In Minnesota, the deadline for enforcing a lien doesn't actually run from the date it was filed. Rather, a filed mechanics lien must be enforced within 1 year from the claimant's last furnishing to the project which was claimed in the lien. It might not make a huge practical difference, but it's worth noting since the deadline to enforce will generally be a bit shorter than 1 year from when the lien is filed.

Amount of the lien
Regarding that section you quoted in your question, that specifically applies to New York mechanics liens, as mentioned in this article: Don’t File Fraudulent Mechanics Liens

In Minnesota, it appears that restrictions on lien amounts are created by § 514.03 of the state's lien statute. Under § 514.03(1), lien claims are limited to the contract price for the work that's performed. So, a claimant can only lien for the price of the work they did as set out by the contract. However, whenever a written contract isn't used, a lien claim can only be made for the reasonable value of the work performed. Where a lien claimant has filed their lien in an amount the owner feels is improper, that owner can challenge the lien filing through legal action.

How exactly to challenge a filed lien
There can be a number of different ways to challenge a filed mechanics lien, and consulting a local construction attorney would probably be helpful in that regard. Though, property owners do regularly threaten slander of title against mechanics lien holders - particularly for exaggerated or fraudulent liens. And, pursuing a slander of title action could be successful, particularly if there's reason to believe that the lien claimant intentionally overstated what they were owed on the lien claim. Here's a quick breakdown of slander of title claims in Minnesota by Aaron Hall: Slander of Title Claim: Five FAQs. But, when an improper lien has been filed, there are likely other potential causes of action that may be brought against the lien claimant. Consulting a local construction or real estate attorney would be helpful in determining exactly what actions may be available, since that will be largely dependent on the specifics of your situation and/or the documentation on the project.

As for where, exactly, to bring such an action - generally, actions regarding a mechanics lien aren't brought in small claims court. Rather, they're made in the district court in the district of the county where the mechanics lien was filed.

With all of that being said, when there are obvious flaws with a mechanics lien - like a vastly overstated amount and/or an expired lien deadline - an owner may be able to have a mechanics lien removed from their property without even pursuing legal action. By making legal threats to seek damages if the lien claimant fails to release their invalid lien, an owner may be able to convince the claimant to remove their own lien so that they do not face potential court costs and additional liability. When a demand letter requiring the release of a lien is sent via an attorney, it will tend to carry a little more "umph".

0 people found this helpful

Helpful