Foreclose on Lien

Foreclosing a mechanics’ lien requires a lawsuit brought in district court. District court requires companies to be represented by an attorney; you cannot represent your construction company yourself. Starting a foreclosure lawsuit has very specific steps that must be followed. If those steps are not followed, you can lose your lien rights. Be sure to hire an attorney with experience foreclosing mechanics’ liens.

A word of caution. If this is a simple matter of a customer unwilling or unable to pay the invoice, the foreclosure action may be relatively simple, though simple foreclosures are still expensive and take a long time. Many times, customers don’t pay because they believe the work was not done properly. They’re willing to walk away without paying the balance if the contractor is not going to fix the problem and walks away, too. When you start the foreclosure lawsuit, they respond with a counterclaim for the bad work. Mechanics’ lien foreclosure actions can get very expensive when there’s a counterclaim. While you may recover all of your legal expenses when you win, you must be prepared to pay the legal expenses along the way hoping you’ll be able to recover them at some point later. You may recover those fees, either with a settlement before trial or long after the trial if you win, but you still have to pay them first and recover them later.

There are many questions an attorney experienced in mechanics’ lien foreclosures will ask before moving forward with the foreclosure because the process can be expensive and take a year or longer to complete. There are alternatives to foreclosing a mechanics’ lien to help you collect the money you’re owed that may get you paid faster and with less out-of-pocket expense. Be sure you have all the information and options available before you start the lawsuit. Lawsuits can be easy to start, but hard to stop if you find out later that foreclosure wasn’t the best option.