I'm a GC and am having a hard time collecting money from a customer with locations in various states. The dates to file a lien have all expired. What are my options as this point? Customers are in DE, MD, MI, PA, WA, , MN and IN. Thank you.
That's a great question and one we get often! Luckily there are several options you may pursue in regards to missing a mechanics lien deadline. First, you need to determine if you really missed the deadline.
When it appears that a lien deadline may have passed you first need to determine whether the deadline has in fact really passed. Although this sounds simple the truth is that mechanics lien deadlines can sometimes be trickier to calculate than it seems like they should be.
If you determine that you really missed the deadline there are still a few options available to you. One option is to go ahead and file a mechanics lien anyway. It is never a good idea to file a lien that you know is invalid or otherwise improper, there is some gray area around the calculated lien deadlines that aren't always cut and dry. Filing a lien may prompt payment by bringing the payment to the attention of relevant parties even if an enforcement action that lien may not be effective. Please note that filing an invalid lien is a bad idea and knowingly filing a fraudulent lien can open a claimant to potential civil or criminal penalties.
Although the lien deadline has passed, there are other protections built into the law to help ensure payment, and other actions can be taken to move payment along. Here are some of the potential few steps in the absence of mechanics lien rights:
Send the property owner a notice of intent to lien.
Notices of intent to lien can be extremely effective in promoting payment – and just because you may not actually file a lien, it can still be a threat in the arsenal to prompt payment.
Send to collections.
If you have an internal or external collections department or partner, sending a claim to them early in the process with all available supporting information can have good results.
Litigation is generally the last resort, but just because there is no mechanics lien right to enforce, that doesn’t mean that there isn’t a cause of action to pursue: Prompt pay statutes, breach of contract, unjust enrichment, and more can all provide avenues to recovery.
I hope that helps!