Since this blog is focused on mechanic liens, we’ve posted time and time again about the importance of following lien laws and filing requirements. Most states very strictly interpret their mechanic lien statutes, and as a result, very small mistakes can invalidate your entire lien.
In fact, it’s important to think about every aspect of your lien claim. Take the claim amount as an example.
At first glance, setting forth the amount of your lien claim seems quite simple. It’s the amount you’re owed, right? Leave it to the law to make matters complicated. When setting forth the amount of your mechanic lien claim, a contractor or supplier must think about what amounts can and cannot be included.
Can you include interest, late payment fees, the costs of filing the lien itself, liquidated or delay damages, etc.? In many states, the answer is no. And the consequence for making a simple honest mistake may be the complete invalidation of your lien.
Over the weekend, the New York Construction Law Update posted on its blog about this very issue, reminding me of how sensitive the simple task of setting forth the claim amount in a lien can be. And reminding me of another problem that arises with this subject: contractors or suppliers who exaggerate their lien claims.
Here is what Vincent Pallaci says in his post about exaggerated claims regarding some claimants’ tendancy to aim high when setting their claim:
Of course there are certain contractors that intentionally inflate the lien thinking it will perhaps give them more leverage to negotiate or increase the chances of quick payment. Some contractors file the intentionally exaggerated mechanic’s lien simply to irritate and infuriate the person that owes the money and refuses to pay.
In New York, as explained by Pallaci, the lien claim amount should not include liquidated or delay damages, or other types of extra amounts, but should only be filed for “the amount of the labor and materials actually performed and unpaid for at the time that the lien is placed.”
Many states treat the issue similar to New York, but it’s critical to consult your state’s specific requirements. We wrote about this a few months ago in this post: What Costs Can I Include In A Mechanic’s Lien?