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Risk with filing lien?

I feel like we are correct in beginning the lien process - started the NTO's - (We were hired directly by an Owner's Designee to negotiate the telecom agreements at existing properties - no building permits) but I have some concern that our client may lash out and make it difficult/expensive for us by suing us for incorrectly filing a lien or slandering them to their lenders by falsely claiming we made an egregious claim. Need some support here!

1 reply

Nov 28, 2017

If reasoning with the owner has not worked and invoices remain unpaid, a lien may very well be the best option. Of course, you must first determine if filing a mechanics lien is an available remedy for the work you've provided. Filing a lien can put a strain on the relationship, and it could also trigger an adverse response from the owner. The owner could assert that the claim constitutes slander of title or could threaten suit, but if the claim is legitimate and is supported by proof (think: the contract, invoices, other communications between you and the owner, etc.), then the owner's claims will fail. Penalties come into play when a claim is grossly overstated or is made without a justifiable basis, but if the claim is properly filed, is justified, and is backed by proof, the penalties you mentioned would not hold up. Minor errors typically will not rise to the level of penalty. However, they could certainly cause your claim to fail. We have a good resource on this topic, which can be found here: https://blog.zlien.com/construction-payment/frivolous-mechanics-liens-intentionally-fraudulent-vs-honest-mistakes/

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