What Costs Can I Include in a Mechanics Lien?

By on May 25, 2010

I practice law, and focus on construction law, in the states of Washington, Oregon and Louisiana.    Whenever folks are looking to put together a mechanics lien, this is a question that is very frequently asked.  (Previously wrote about it here).

While the question seems quite simple, it’s actually a bit complicated.   And it’s a very sensitive question to boot.   The answer differs depending on which state’s law applies, and some states are more sensitive to the topic than others.   In some states, if the lien amount is listed incorrectly, or includes costs not allowed under law, it could invalidate the entire lien.

In other words, tread very carefully.

So, what is this question asking anyway?   Well, folks are typically looking to include two different costs into the amount of its lien.   First, the cost of filing the lien itself.  This may be the cost of an attorney, the filing fees with the county, or the cost of our service ($295).   Second is charged interest on the unpaid account.  Sometimes this is the state’s judicial interest, or interest allowed by contract.

Let me make something very clear:  This is an extraordinarily complicated question to answer on a general basis.  You should consult with an attorney to figure out exactly what costs you can and should and may include in your lien.

However, let me take a crack at trying to answer this question generally.

In Louisiana, Washington and Oregon, if someone wants a general rule, I always advise my clients to simply file the lien for the amount that is due under the contract, without any of the extras.  I advise this unless there is specific circumstances and law that allow them to do the contrary, and they know the law.  I advise this simply in an abundance of caution for these two reasons:

1) If you include it (the extra costs), and you cannot include it, it could invalidate the lien; and

2) if you do not include, it doesn’t mean you can’t collect it. It just means its not part of your lien, and you don’t have the lien against those particular funds (you still have any legal or contractual right to it).

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About Scott Wolfe Jr

Scott Wolfe Jr. is the CEO of Zlien, a company that provides software and services to help building material supply and construction companies reduce their credit risk and default receivables through the management of mechanics lien and bond claim compliance. He is also the founding author of the Lien Blog, a leading online publication about liens, security instruments and getting paid on every account. Scott is a licensed attorney in six states with extensive experience in corporate credit management and collections law, with a specific emphasis on utilizing mechanic liens, UCC filings and other security instruments to protect and manage receivables. You can connect with him via Twitter, LinkedIn and Google+.Read Scott's Biography Post Here
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  • MIchael

    In New York. Can a mechanics lien be filed upon a property that has been foreclosed? which now the bank now owns?

    • http://www.expresslien.com Scott Wolfe Jr

      Hi Michael – Thanks for the comment. Since zlien.com/blog is not a law firm, we cannot give legal advice. And while I am personally an attorney, I only practice in WA, OR and LA (not NY). As such, you should consult with an attorney licensed in your area for legal advice specific to your question.

      I will also recommend the attorney directory site http://www.avvo.com, where you can find a listing of relevant attorneys and ask questions to attorneys online.

  • http://www.carrbutterfield.com Lisanne

    I’ve often read (and heard from colleagues) that including the wrong amount in a lien may invalidate the lien. What happens if the amount is wrong due to a mere typographical or mathematical error of less than $500? Does that invalidate the entire lien? Assuming it’s beyond th 120-days to file a new lien, what is our recourse to fix the record? Can you refer me to a resource to answer this question under Alaska law?

    • http://www.expresslien.com Scott Wolfe Jr

      Hi Lisanne – thanks for visiting and for your comment. Whenever you deal with the particular requirements of the mechanic lien’s contents, things can get tricky, and the answer will change from state to state. In some states, courts will look this issue and usually find in favor of the lien claimant. The bigger the “typo,” the less likely they are to accept the mistake.

      I had a client in Louisiana bring this to a judge, where the lien was off by about $20,000. The judge allowed us to have the lien amended and reduce the lien amount by $20k (even though the lien period had expired). I don’t think the result would have been the same if we asked for the lien amount to be increased.

      The law in Alaska will be different. You may want to pose your question to an online Q&A service like avvo.com. Even though I’m an attorney, I sometimes use the service as a listserv of sorts, where I can ask a bunch of other attorneys a question and get some answers about something they might know more about than me.

      From a quick google search, I found that the lien content requirements for Alaska is codified in AS 34.35.070. This statute’s annotations has the following three cases summarized which may be helpful:

      STATEMENT OF DEMAND MUST BE TRUE. –It is necessary that the statement of the lienors’ demand contained in the notices should be the true amount due, after making deductions for all just credits and offsets, but it is not necessary that such shall be expressly stated in the notices filed. Irvine v. McDougall, 4 Alaska 702 (D. Alaska 1913).

      INCLUSION OF IMPROPER ITEM VOIDS LIEN. –Where a lien claimant includes in his lien statement an item not embraced in the statutory lien, for labor, such as for expenses of transportation, he loses his lien. Bloom v. McCluskey, 7 Alaska 349 (1925).

      UNLESS MISTAKE IS HONEST AND ITEMS MAY BE SEPARATED. –The fact that a lien claimant includes in his claim, through an honest mistake, a claim for services for which the statute gives him no lien, will not defeat the lien for other services within the statute also claimed, if the two can be separated. Irvine v. McDougal, 5 Alaska 220 (D. Alaska 1915), citing Pioneer Mining Co. v. Delamotte, 185 F. 752 (9th Cir. 1911).

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