My company is a second tier contractor. The contractor has the typical pay when paid stipulation. This contractor is 120 days past due. At what point is a lien filed? Does it depend on invoice date or date of services?
Aug 24, 2017
This is a great question about pay when paid clauses.
The short answer here is that pay-when-paid clauses have nothing to do with your right to file a lien, and the timing to file a lien. The right to file a lien comes from the state's statutory law, and it doesn't matter what the contract says.
It's an unfortunate fact that waiting on these types of clauses (and payment in general) for 120 days is not that uncommon in construction. There are a bunch of reasons that slow payment is such an issue in this industry, but the real issue is whether it can be alleviated in some way.
Many companies attempt to prioritize their invoices or pay-apps by making sure they send preliminary notices, which provides visibility to the interested parties on the project and keeps them informed that you have remained in a secured position, and are able to file a lien if needed.
Your question, of when the lien gets filed, also has little to do with the age of your particular invoice. The deadline to file a lien is usually calculated from the last date you did any work on or supplied any materials to the job, or the end of the project as a whole (depending on state). In California, the lien deadline is set at 90 days from completion of the work as a whole (or 30 days from the filing of a notice of completion/cessation).