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General contract has gone out of business, how does this affect our lien

IdahoMechanics Lien

We recently completed work on a project and the GC has gone out of business at the end of the project. we have been in contact with the developer of the property and have now invoiced them directly for the remaining balance. Do we need to change anything in our lien filing to reflect this change?

1 reply

Dec 23, 2020

No, changes in other parties' circustances generally shouldn't affect the information an Idaho mechanics lien claimant puts on their own lien claim - particularly when those changes in circumstance occurred after the claimant's work was completed. For example: Idaho mechanics liens should generally include the claimant's hiring party and their contact info. Even if that hiring party goes out of business, they're the ones who hired the claimant to do work on the job. So, listing that hiring party, even if they're defunct, is appropriate since it represents accurate, required information about how the claimant came to perform work on the job.

It's worth noting that this is the exact type of situation is why lien rights are so crucial for subcontractors, suppliers, equipment rental companies, and others who were hired by someone other than the owner on the job. Despite the fact that the customer has gone belly-up, a mechanics lien claim can attach to the property and force payment from someone else on the job - like the owner, developer, lender, etc.

For further discussion on Idaho mechanics lien rights and claims, these resources should be helpful to you: (1) Idaho Mechanics Lien Guide and FAQs; and (2) How to File an Idaho Mechanics Lien – Step by Step Guide to Get You Paid. Additionally, keep in mind that the mere threat of a mechanics lien claim will often be enough to force payment, particularly when a lien claim would disrupt the progress of a development: What is A Notice of Intent to Lien And Should I Send One?

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