We have several jobs that are not completed but our preliminary liens are expiring.
1 reply
May 20, 2019
I'm sorry to hear that you've been facing payment issues on these jobs. Everyone should be paid what they've earned, and no one should have to file liens just to get paid what they're owed. Let's first review the timeframes for Montana mechanics liens, then get into what options might be available to recover payment when the lien enforcement deadline is rapidly approaching. If you're already familiar with Montana's timeframes for filing and enforcing a lien, feel free to skip down a bit.
In Montana, a mechanics lien must be filed within 90 days of the claimant's last furnishing of labor or materials to the project, but also within 90 days of the owner filing a Notice of Completion (if one is filed). This represents the last timeframe before which a lien can be filed. Once a lien is filed though, there's another deadline to consider - the lien enforcement deadline. In Montana a filed lien must be enforced (i.e. suit must be filed) within 2 years of filing the lien. This deadline exists regardless of the project's status. Even if the project has not been completed, if a lien has been filed and over 2 years pass without an enforcement action, then the lien(s) will become unenforceable. While enforcing a lien is often seen as the next step once a lien has been filed, many claimants find that adding another step helps with this process.
Generally, the 2 year period from lien filing to the lien enforcement deadline allows parties to try and negotiate and resolve their dispute without the need for legal action. But, while mechanics liens are a powerful tool, some businesses find that adding another step in between filing a lien and enforcing that lien can help with recovery. When payment still isn't made after a lien filing, sending a warning or threat that the lien will be enforced and foreclosed will often grease the wheels toward payment.
Sending a document like a Notice of Intent to Foreclose shows the property owner, contractor, and any other recipients that nonpayment is not an option, and that the lien claimant is willing to take to the courts if the issue isn't resolved. Because nobody likes a lawsuit, and because the implications of a lien enforcement action are so serious, many recipients become more willing to talk payment if they know the enforcement action is looming. But ultimately, if payment remains unpaid and the deadline to enforce the lien is closing in, it may become time to secure legal representation and look to enforce the filed lien via suit.