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If we have 2 contracts on the same site can we file liens using the 2nd contracts Last Day Worked for Receivables Outstanding on the 1st contract?

We have a job site where there are 2 buildings and separate contracts were written to us for each. We finished work on the first contract and have yet to be 100% funded. Our last day worked on that contract work now is past the time frame to file a lien. However, we still have days remaining from our last day worked on the second building. Since it's the same job site, can we still file using the 2nd contracts last day worked?

1 reply

Mar 19, 2019

That's an interesting question, and I'm sorry to hear you've been going unpaid. First and foremost - the safest option when it comes to calculating mechanics lien deadlines is to play the deadlines conservatively. In order to be certain that all work will be protected when a claimant provides work under multiple contracts, it's generally a good idea to treat the contracts as if two separate liens would be necessary. While one lien against one property for work done under multiple contracts could be appropriate at times, this should probably be treated as the exception to the rule - especially when the contracts will be wrapping up at different times. Looking to the Ohio mechanics lien statute doesn't prove much clarity for the situation described above since lien statutes can't anticipate every situation. However, based on the definitions and verbiage used in the statute, a claimant might have a colorable argument that their deadline to lien should be based on their last overall furnishing to the project and that the fact that work is performed under separate agreements shouldn't affect the deadine to lien. § 1311.02 of the Ohio lien statute establishes who may file a lien in Ohio. It states that the following parties will have the right to lien: those who perform work "by virtue of a contract" with the owner will have the right to lien, as well as "every person who as a subcontractor, laborer, or material supplier, performs any labor or work or furnishes any material to an original contractor or any subcontractor, in carrying forward, performing, or completing any improvement". While that doesn't provide all that much help, it does appear that the claims of a sub or supplier are tied more closely to the overall improvement than to the contract itself (more on that in a bit). Next, let's look to § 1311.06 which sets some guidelines for filing. Under § 1311.06(A), a claimant must include in their claim "the first and last dates that the lien claimant performed any labor or work or furnished any material to the improvement giving rise to his lien." Again, it appears that the lien claim is tied to the claimant's overall work at the improvement rather than to the contract under which that work is performed. Section § 1311.06(B)(3) sets the timeframe for a mechanics lien filing on property that's non-residential and non-oil and gas related. It states that such a lien must be filed: "within seventy-five days from the date on which the last of the labor or work was performed or material was furnished by the person claiming the lien." That section does not provide too much clarity for a situation where work is being provided under 2 separate contracts. But, it might be read as stating the deadline runs from the claimant's overall last furnishing of work for the project, and that the timeframe doesn't tie directly to the last furnishing under a specific contract. § 1311.08 of the Ohio lien statute discusses lien filings when work is performed on multiple buildings on one lot or on contiguous lots, but it too does not discuss a situation where the work is being performed under multiple contracts. Under that section, when work is performed on separate buildings on the same lot or upon contiguous or adjacent lots under the same overall prime contract, one lien will attach to all of the related lots where work was furnished - and multiple claims won't be necessary simply because work is performed on separate buildings. But that refers to the amount of land which is secured by a lien - and it does not discuss what amounts will be subject to a specific lien or what happens when work is being furnished under multiple contracts. Finally, one signifier which might provide some help here might be to look at the project's Notice(s) of Commencement. If one Notice of Commencement has been filed for all work being performed on the multiple buildings, that might stand to signify the buildings are considered one overall "improvement" - which, a claimant could reason, might mean only one lien claim would be required. Where multiple Notices of Commencement have been filed, separating the work to be performed on the different buildings, that might indicate that the buildings are two different improvements - and having two separate contracts might create two separate lien deadlines. Finally, it's important to remember that it's not necessarily a black and white issue, and that arguments could be made on either side. Typically, mechanics lien disputes don't actually make it to the point where a lien is determined to be valid or invalid - that really on happens when a lien is challenged via legal action or unless the lien must be enforced. So, unless and until a court puts eyes on the lien, arguments over the ultimate validity or invalidity might be moot. And, when a lien filing takes place, claimants often find that they have the opportunity to discuss and negotiate payment with the owner prior to official action becoming necessary. But, as mentioned at the start of this (admittedly longwinded) answer, the safest way to proceed when making payment claims under multiple contracts may be to advance with separate lien claims. As a final note - keep in mind that, in many situations, the mere threat of a lien claim can work to compel payment regardless of whether a claimant could or would file a lien claim. That idea is discussed here: What is a Notice of Intent to Lien? For more on Ohio liens, this resource should be valuable: Ohio Lien & Notice FAQs.

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