If you are a building contractor or supplier then you need to be familiar with the Massachusetts mechanic's lien law. It could be your best friend or your biggest nightmare depending on whether you know how to navigate your way through this somewhat cumbersome legal process.
The construction lawyers at the Katz Law Office have nearly four decades of experience guiding both general contractors and subcontractors through Massachusetts' law on mechanic's liens.
What is a Mechanic's Lien?
In essence, the title "mechanic's lien" is a misnomer as it has nothing to do with the rights of a mechanic or cars (which rights fall under the remedy of a "garagemen's lien"). Simply put, a mechanic's lien is a security interest that a contractor or supplier has in the property that ensures they are paid for the labor or materials supplied to the construction.
Massachusetts General Laws Chapter 254 governs how mechanics' liens are to be initiated and later perfected by contractors or suppliers. The right can be asserted on either a residential or commercial project but does not attach to construction projects on public land. Typically, the very filing of a mechanics lien against a project will be enough to resolve a dispute.
Once the lien is recorded, a lending institution will pay it off before it makes a disbursement to the owner of the project. The lien often will have the effect of stopping the funding on a project until the lien is satisfied or removed.
Attaching a lien to the property is often a contractor's or supplier's only immediate remedy to getting paid for work done or supplies provided and delivered.
Who Can File One?
The right to file a lien is open to almost anyone involved in a private construction project, including the:
- General contractor,
- Subcontractors,
- Second-tier subcontractors,
- Laborers, and
- Suppliers.
Any of these parties can all take advantage of the protection of the statute. The statute also provides protection for architects, engineers, construction managers, and those companies supplying rental equipment. However, any party who asserts a mechanic's lien must have a written construction contract in one form or another. The statute does not mandate the type of contract required, but it does require one.
How to File a Mechanic's Lien in Massachusetts
In Massachusetts, a mechanic's lien is initiated by the filing of a series of recordings in the local registry of deeds where the subject property of the project is located:
- Notice of Contract
- Notice of Identification (for more distant subcontractors)
- Statement of Account
Once those recordings are completed, it is followed by a lawsuit in Superior Court. The mechanic's lien law has strict timing and filing requirements that must be satisfied or the lien will be unenforceable.
1. The Notice of Contract
In order to file a mechanic's lien, you must first record a Notice of Contract with the local registry of deeds.
Read more about filing the Notice of Contract here.
Basically, though, the Notice would contact specific information about the construction requirement, what the lien would encumber, and the amount owed. It must be recorded no later than 90 days from the date:
- A contractor did work on the project, or
- A supplier last delivered goods to the project.
This timeframe can be accelerated in some cases, so do not wait for the last minute to file a Notice of Contract.
2. The Notice of Identification
In the case of a second-tier supplier or sub-subcontractor can protect themselves by sending the general contractor a Notice of Identification within 30 days of starting work on the project. This notice alerts the general contractor (with whom they have no contractual relationship) that there is a party working on the project and the estimated value of its work.
You must never assume that the party you are working with or the party to whom you are supplying goods is keeping the general contractor aware of the multiplicity of parties working on any given project. If you do further work or provide supplies between filing the Notice of Identification and filing the Notice of Contract, then you will not be limited by the amount in the Notice of Identification.
3. Statement of Account
In connection with the Notice of Contract, you are required to record another document called a Statement of Account. It is somewhat similar to the Notice of Contract and provides accounting, under oath, of the amount due at the time of recording. The Statement of Account must be recorded within 120 days from the last date that work was performed on the project.
It is often wise to file both the Notice of Contract and the Statement of Account at the same time. In this way, you only have one deadline to manage instead of having to comply with two separate deadlines.
4. The Lawsuit
If your lien is still not resolved, then a lawsuit must be filed in court against the property owner to enforce the original mechanic's lien.
A copy of the complaint initiating the lawsuit in the Superior Court is then recorded at the registry of deeds. In order to prevail on the initial mechanic's lien, the contractor or supplier must establish in the lawsuit that they are due money for their work and that they have satisfied each of the filing requirements of the mechanic's lien statute. Although judgment on the lien will include an order for the sale of the property at the location of the project, liens will typically be resolved by either payment, a lien bond, or settlement prior to the enforcement of a court order for the sale of the project property.
Conclusion
As you can see, there are a lot of moving pieces involved with the filing of a mechanic's lien in Massachusetts. It is important to note that each step of the mechanic's lien statute must be complied with or else your lien rights will fail. The results of your failure to comply with the statue will result in a loss of rights for your company. There are no exceptions in the event of non-compliance.
Massachusetts Construction Lawyers at the Katz Law Group
At the Katz Law Group, we have handled hundreds of mechanic's liens from the initial Notice of Contract all the way through the lawsuit and trial. We know the hurdles that contractors and suppliers face in these situations and we are here to assist. By starting the process in a timely fashion and making sure that your cost itemizations are clear, you will be in a better position to recover the monies that are due to your company. Please call us at (508) 480-8202 or contact us online to find out how we can help you protect your rights.
The protection of your legal rights is our first priority.
