Lien on: 2 requirements for every construction lien
If you’re filing a mechanic’s lien, be very sure to include the right time and correct amount. A contractor discovered how important these two things are in a recent case pitting him against his customer.
A construction contract was negotiated and executed in the amount of $246,700. When customer-dictated changes increased the price by $10,000, the contractor simply whited out the old price and inserted a new, higher price on the contract. While he claimed the customer had seen and agreed to the new price, the contractor had failed to obtain a signature or initials acknowledging the change. Sometime after construction had begun, the customer discovered the price increase and ceased making payments. Construction stopped, and the contractor timely filed a claim of lien for the balance still due to him for work done on the project. Two months later, the contractor amended his lien to include additional work he had to perform to protect the partially finished project from the elements.
The customer wasn’t happy. She claimed the amended lien was filed late and for exaggerated amounts. The court, however, sided with the contractor, finding that the additional work done by the contractor to safeguard the yet-to-be completed project was done in good faith, within a reasonable time, and pursuant to a contract. The court then determined that this subsequent work extended the time for filing a lien. It was not remedial work (which would not extend the statutory deadlines for the filing of a lien), but rather work necessary to complete the contract.
It was a good day for the contractor. His good faith efforts to fulfill his contractual obligations, and his filing of the amended lien for the correct amount and in the right time frame overcame his failure to obtain a fully executed contract with the adjusted price. Without these two elements, it could have turned out very badly for the contractor.