Home>Levelset Community>Legal Help>Hello, I am an Architecture firm who contracted with a developer to do permit drawings on a property the developer owns. Terms of the contract state that the balance of payment is due upon the sale of the property. however, the developer has not worked on the project in 6-8 moths and we know to be struggling to keep other jobs afloat. Is a Mechanics Lien the right way to secure that we are paid upon sale of the house? He is not in breach of Contract yet, and the work we performed was over the 90 ago so not sure we can file a lien. We do not want to be in a situation where if the developer does sell (prior to completion or after completion) to pay off debts owed to others and we are not then compensated. Appreciate any advise you can offer. Thanks, Chris

Hello, I am an Architecture firm who contracted with a developer to do permit drawings on a property the developer owns. Terms of the contract state that the balance of payment is due upon the sale of the property. however, the developer has not worked on the project in 6-8 moths and we know to be struggling to keep other jobs afloat. Is a Mechanics Lien the right way to secure that we are paid upon sale of the house? He is not in breach of Contract yet, and the work we performed was over the 90 ago so not sure we can file a lien. We do not want to be in a situation where if the developer does sell (prior to completion or after completion) to pay off debts owed to others and we are not then compensated. Appreciate any advise you can offer. Thanks, Chris

I am an Architecture firm who contracted with a developer to do permit drawings on a property the developer owns. Terms of the contract state that the balance of payment is due upon the sale of the property. however, the developer has not worked on the project in 6-8 moths and we know to be struggling to keep other jobs afloat. Is a Mechanics Lien the right way to secure that we are paid upon sale of the house? He is not in breach of Contract yet, and the work we performed was over the 90 ago so not sure we can file a lien. We do not want to be in a situation where if the developer does sell (prior to completion or after completion) to pay off debts owed to others and we are not then compensated. Appreciate any advise you can offer. Thanks, Chris

1 reply

Oct 3, 2018

I'm sorry to hear about this problem job. If available, mechanics liens can be a powerful tool in situations like this. Before any sale is made, the purchaser (or their lender) would almost certainly require that the lien claims be resolved prior to closing the deal. Before getting too far along, let's discuss the deadline for filing a mechanics lien. In Virginia, a lien claimant must file their lien 90 days from the last day of the last month in which labor/materials were furnished to the project. Thus, the calculation is not quite as simple as 90 days from the last date work was provided. So, in a situation where a claimant's last work provided was at the beginning of a month, this deadline could be extended well beyond 90 days from the last day when work was performed. If a lien is no longer available, that does not mean all hope is lost, though. For one, because the mechanics lien remedy is such a drastic one, the mere threat of a lien claim can be effective to compel payment - regardless of whether a valid lien claim could be filed. By sending a document like a Notice of Intent to Lien, a claimant can give their customer one last chance to pay, This document acts like a warning - it states that if payment isn't made soon a mechanics lien will be filed. You can learn more about the document here: What is a Notice of Intent to Lien and Should You Send One? Further, there are other options available even where recovery under a mechanics lien might not be possible. Demand letters that threaten legal action if payment is not made can be effective - especially when they threaten specific legal claims (such as breach of contract or unjust enrichment). When sent through an attorney, demands such as these tend to carry a little more weight. If a demand is not enough, actually taking legal action could be an option - though, it would be wise to consult with a local real estate attorney about the potential for a lawsuit prior to making that decision. They will be able to review any and all documentation, communication, or other information and advise you on potential actions and how best to proceed. Of course, before taking any drastic action, it may be worthwhile to reach out to the developer and discuss the issue and/or attempt to set up a payment plan.

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