If we file a lien and it goes in favor of the other side. What would be the consequences? Pay legal fee, etc?

1 month ago

Company paid us to paint didn’t pay draws on time, stopped us from working on some days didn’t get done on time because of this. Now are saying contract was broken because of this.

Senior Legal Associate Levelset

First, note that the majority of mechanics lien filings don’t result in a lawsuit. And, generally, the only time a lien claimant would be responsible for penalties, fees, damages, etc. would be if there was a judgment against the claimant if their lien was challenged or if the claimant unsuccessfully enforces their lien claim. Further, even when there is a potential issue with a lien claim, a claimant will often have the opportunity to release their lien claim before serious penalties or fees come into play.

With all of that being said – generally, if a lien claimant has filed a mechanics lien and that lien is deemed invalid, it’s possible that the lien claimant might be responsible for paying the costs and fees of the other party to the dispute. Typically, as long as the filed lien isn’t fraudulent or exaggerated, a lien claimant won’t be responsible for serious damages or penalties. And, note that there’s a difference between fraud and an honest mistake.

But again – lien claims are typically resolved before legal action becomes necessary, and if a filed lien claim does look like it may be doomed, then a lien claimant can typically remove their lien before serious liabilities arise.

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