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We are looking to possibly file a lien on a project we have not gotten paid for.

OhioMechanics LienPayment DisputesRecovery OptionsRight to Lien

We are a lighting manufacturer who provided materials for a job site in Ohio. Our products were purchased from a distributor and sent directly to the job site. The distributor sells our products to the contractor or end user. We have not gotten paid yet, and want to possibly file a lien in order to do so. We learned yesterday that our Distributor is actually going out of business. I am not sure if they are filing for bankruptcy or what their status is. When I spoke with them yesterday, they said they would send me a contact of who to call to find out what and if we will get paid. I have not received anything yet. We would like to be proactive on this to see what we can get done. This material was shipped in February. Total cost was around $13,000. Please let me know our best approach. Thanks, Cori

1 reply

Jul 8, 2020
Ohio's mechanics lien statute doesn't prohibit a supplier to a supplier from filing a mechanics lien claim. Though, it does state that lien rights are available for those who supply materials "to an original contractor or any subcontractor..." So, the statute doesn't seem to explicitly state that lien rights will be available to a supplier who supplies another supplier, either. By and large, suppliers to suppliers are not entitled to file mechanics liens. But, it's possible lien rights would be on the table - after all, most states' lien laws are broadly construed, providing protection to most involved in a construction project. Further discussion, here: Do Material Suppliers to Suppliers Have Lien Rights? So, considering this seems to be in a statutorily gray area, it may make sense to file a mechanics lien. If the lien gets disputed, at that point, you'd be able to decide whether to pursue the lien claim further or whether to release that claim and opt for some other payment remedy. For more on Ohio liens: Ohio Mechanics Lien Guide and FAQs.

Recovering payment without filing a lien claim

Before opting to file a mechanics lien claim, it might be a good idea to send a Notice of Intent to Lien. A Notice of Intent lets recipients know that if payment isn't made, then a lien will be filed. So, by sending this to others on the project (like your customer, the GC, and the property owner), they'll know that you'll create serious issues for this project if you aren't paid what you're owed. Nobody wants to face a mechanics lien, so it's possible that the additional pressure will convince one of them to pay. More on Notices of Intent here: What is A Notice of Intent to Lien And Should I Send One? Additionally, if your customer wasn't paid, then pursuing an unjust enrichment claim could be an option too. More on that here: Construction Payment Remedies: What is Unjust Enrichment? Finally, even if your customer seems to be going out of business, it might be worthwhile to evaluate and potentially pursue legal claims against their business. That's especially true if it looks like they're attempting to avoid their business debts by closing up shop. Consulting with a local Ohio construction attorney would help to clarify whether pursuing recovery would be a fruitful option, there. Plus, they might be able to shed more light on the availability of mechanics lien rights. For help finding a lawyer: Find a Ohio Construction Lawyer.
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