Filing a Mechanic’s Lien. Again. And Again.
Liens on private property and liens on public property serve a similar purpose—to protect the contractors who improved the property through their performance of construction work and to ensure that they are paid for their work. But private and public liens sometimes follow very different rules.
One of the biggest distinctions can be found in the time within which the liens must be filed. On private property, a lien generally must be filed within 8 months of the last day that the contractor itself performed actual work improving the property (work on single-family residences has a shorter, 4-month, deadline). It doesn’t matter how long others continue to work on the project or when it was completed. If more than 8 months elapse from the lienor’s last day of work, its time has expired and the lien may not be filed.
Work on public property follows a different rule. Because a public lien attaches to the fund of money due to the prime contractor, not the structure itself (you can’t sell the Brooklyn Bridge to enforce your lien), a longer time to file is permitted. The rule for public liens is that they must be filed “at any time before the construction … is completed and accepted by the public corporation.” Both requirements must be met: completion and acceptance. The practical application of this is that so long as the public entity is still holding money due to the prime contractor, a lien will probably be deemed timely.
These differences played out recently in connection with a school construction project. A trucking company filed a lien in 2011 for money due from Pavarini McGovern. Unfortunately, it listed the wrong general contractor on the lien and it was never properly recorded by the School Construction Authority ("SCA"). More than a year passed and the lien was not renewed. It expired and lapsed. But when the lienor realized in 2015 that its lien had lapsed, it filed a new lien, properly naming Pavarini McGovern.
When the general contractor asked the court to dismiss the lien as expired, the lower court granted its motion. But the appellate court reversed. The court held that because Pavarini McGovern did not establish that the project was both completed and accepted by the SCA when the new lien was filed in 2015, it had failed to establish that the new lien was untimely.
So, even though the lienor would have been dead in the water on a private lien once 8 months had elapsed from its last day of work, a lienor on a public improvement might have years to keep filing new liens (each one automatically superseding the last) until the entire project was both completed and accepted. Nice to know.
Contact GDB Construction Law attorney Randy J. Heller, Esq. for more information.
Further information on mechanic's liens can be found on our blog:
What Can You Lien For? And What Not?
You Must Renew a Bonded Lien, Or Else
Willful Exaggeration of a Mechanic's Lien - Only Established at Trial
A Willfully Exaggerated Lien - It's Not Just the Amount