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Invoice payment Quandary

there are 5 open invoice for material. I sent payment of 4 of them total $3339.00 along with a copy of the invoice to apply them too. That left one invoice for $6900. The supplier choose to apply it as a partial payment to the $6900 and is threatening to file mechanics lien against the other 4 properties. Is this legal?

1 reply

Jan 17, 2020

When payment is to be made on a specific invoice, then the party making payment should generally make it as clear as possible which invoices should be paid by which check. If that's done, though, then the party receiving payment should apply the payments to the specified invoices identified. This is particularly true when mechanics lien rights may be coming into play. Mechanics liens attach to specific properties, not against contractors in general - and a material supplier can't simply pick and choose which houses to lien when they've been properly paid for specific properties. Ultimately, though, it sounds like improved communication should clear a lot of things up here. By openly discussing the issue with the material supplier, it should be possible to straighten out invoices and to create a realistic expectation of when the final invoice will be paid. And, with open and honest communication, it's less likely a supplier will feel like they need to pursue a mechanics lien just so they'll be paid what they're owed. To avoid similar problems going forward, though, it might be helpful to stagger payments and/or to require project-specific lien waivers be exchanged for the check allocated to that property. More on using (collecting) lien waivers here: How To Handle Requesting & Tracking Lien Waivers.

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