Short Answer: Probably, yes.
Long Answer: I love Avvo.com, and frequently participate in that community of attorneys. A question was asked to the attorney world at large two weeks ago by someone in Seattle, Washington, that interested me. I planned to answer it on Avvo, but didn’t get around to it until it was too late. Unfortunately, the question went unanswered. Here it is:
Do contractors have the right to put a lien on my property if they didn’t finish work?
Of course, this question is asked from the property owner’s perspective, and most everything on the Lien Blog is written from the perspective of lien claimants. But this is an important question here because it is one that implicates the claimant’s rights, and is a frequently asked question.
[pullquote style="left" quote="dark"]The rule is usually as simple as this: If the property is improved and the contractor isn’t paid for that improvement, there is a mechanic’s lien right. [/pullquote] As disclosed in the short answer above, it is highly likely that the contractor can file a mechanics lien even if the work is not completed. Most states allow contractors to file a mechanics lien for the value of their improvements to the property. The rule is usually as simple as this: If the property is improved and the contractor isn’t paid for that improvement, there is a mechanic’s lien right.
Of course the contractor cannot lien for its incomplete work, because the property wasn’t improved for that incomplete work. However, just because the work isn’t completed doesn’t mean the contractor didn’t contribute an improvement for which the contractor is owed.
We wrote a similar FAQ last year called “Can I File A Lien If My Workmanship Is In Dispute.” A dispute with a contractor for workmanship problems is a very close cousin to a dispute over the completeness of work. The result in that situation is also close to the result here, which is that the mechanics lien can usually be filed.
Contrast this, however, with an exception that exists in some states like Iowa.
This past June, the Iowa Supreme Court decided Flynn Builders LLC v. Landes, and tossed a mechanics lien as improper because the contractor did not complete the work. As explained in that post, Iowa only allows contractors to file a mechanics lien if they “substantially performed” on the contract.
Absolute completeness is not required to file a lien in Iowa (and therefore, problems with workmanship or punch list items probably wouldn’t prevent a lien filing), but it is clear that unlike many states and contrary to the general answer to this FAQ written about here, a contractor in Iowa must complete – or substantially complete – the project to file a mechanics lien.