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Next steps in foreclosure process for a subcontractor that did not lien.

We are a hired subcontractor who have not been paid for work done in February/March of this year. The GC is in the process of filing foreclosure on the property. Until now we have not made any legal action against the GC or the contractor. Can we lien on this property or file anything under the foreclosure to try to get some of our invoices paid? What are the next legal steps for a subcontractor who did not file a lien on the property within the time allotted time frame. Can we file a lien still? What are the legal kickbacks possible if we file and they reject/challenge the lien?

1 reply

Dec 19, 2018

These are fair questions, and I'm sorry to hear that you've gone unpaid. As you may know, the deadline for filing mechanics liens is very strict, nationwide. Once the timeframe for filing a mechanics lien has passed, any subsequently filed lien will be invalid. In Minnesota, this deadline is 120 days after the claimant's last furnishing labor or materials to the job - and insignificant amounts of labor or materials furnished for the purpose of extending the timeframe for filing a lien will not work to extend this deadline. When a mechanics lien is filed beyond the deadline, such a lien would likely be set aside as invalid and unenforceable - especially where a foreclosure is imminent. Potentially, if the lien claimant is found to have filed their lien in bad faith, additional penalties (such as fines, damages, etc.) could also come into play since states tend to take fraudulent lien claims very seriously. In either case, often, a lien claimant will have the opportunity to remove their filed lien before serious penalties come into play, but that might not always be the case. When the deadline to file a lien claim has long passed, typically, the safer idea will be to resort to some other option for recovery. Finally, it's also worth mentioning that just because lien claims have popped up on a project and the parties above you (like your customer and/or the general contractor) haven't gotten paid - that doesn't mean you aren't entitled to payment from those parties. Thus, if those parties are pursuing payment recovery, reminding them that you must still be paid and that you will pursue them for payment can help. When a job blows up with payment disputes, it often feels like a free for all - but that doesn't mean your customer is off the hook for paying you. It just might be a little harder when a lien claim is not available.

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