We have filed a mechanics lien and the customer has made a payment but it is not for the full amount of the lien. If we accept the payment and the customer doesn't pay any more of the balance owed do we have to file a new lien?
Sep 25, 2018
First, I'm glad your lien has lead to at least partial payment! Having to resort to a lien is never ideal, but when necessary, liens get the job done. When partial payment is made on a lien claim, the lien claimant does not need to release their lien outright. Further, New Mexico's mechanics lien statute does not specifically provide for the partial release of mechanics liens. So, when partial payment has been made on a New Mexico mechanics lien, it's a good idea to keep detailed record of what amounts have been paid toward that lien claim and to communicate that with your customer and/or the property owner. Keeping them apprised of the situation is a good idea, because if there's a misunderstanding about the status of your claim, it could lead to anger and potentially legal action. However, until the lien claim has been paid in full (or until a claimant is satisfied with the amount they've been paid), it is not wise to release a filed mechanics lien. Mechanics liens are the best leverage contractors, subs, and suppliers have to recover payment. Plus, lien claimants have a lot of time to use their lien to compel payment before a lien enforcement deadline comes into play. In New Mexico, a claimant has two years from the date the lien was filed to enforce their lien or commence binding arbitration on the dispute. If legal action does become necessary, it would be important to take into account payments made toward that lien claim - a claimant would likely need to reduce the amount of their action at that point. Finally, if partial payment will be accepted, but that partial payment should not work to extinguish the entire claim, it's very important to clarify that fact with the party making payment. A misunderstanding could certainly arise if they believe the payment will resolve the dispute in its entirety. Further, it's also incredibly important to review any documentation sent along with the payment to be sure that accepting that payment does not signal the claim has been fully paid. Finally, this article from zlien should be helpful: I Received Partial Payment — What Should I Do With My Mechanics Lien?