Record Lien Before Completion

#7 of the Top 10 Misconceptions about Mechanic's Liens

It's good practice to record a mechanic's lien as soon as equipment, materials or services are first provided for the project

Not true! You cannot record a lien before completion.

The mechanic's lien must not be recorded until the entirety of labor/materials/equipment/etc. called for under a contract have actually been provided.

A subcontractor that does record a lien before completion of his work under a contract has recorded the lien prematurely and will likely lose all mechanic's lien rights however, for a supplier providing materials pursuant to a credit application, there is not one contract with a set quantity of materials.

For a supplier, each order/invoice may represent an individual contract. The supplier may record one mechanic's lien combining the invoices, or the supplier might be able to record multiple mechanic's liens each related to one or more invoices (assuming that each mechanic's lien meets all timing requirements and other requirements).

It will depend on the individual contract circumstances, and a construction attorney should be consulted.

Retention and mechanic's liens

Retention is not legally owed until full completion of the work, and logically that non-owed retention amount might not yet be "lien-able" under the "lien is for the amount owed under the contract" rule, but because the entirety of work will have been provided at the time the lien is recorded, the amount owed as retention may be included in the lien amount even if it is not yet due under the contract. The important concern is that you do not record a lien until the entirety of work is performed.

So, can you record a lien before completion?

Most likely no unless you're a supplier but, it would be best to check with an attorney because circumstances vary from contract to contract.


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Above article written by:
David J. Barnier,
Partner at Barker Olmsted and Barnier, APLC


Disclaimer -
This article presents a discussion of general laws, rules, and strategies related to mechanic's liens and other construction issues and is intended to provide background information that will assist the reader in understanding the general laws and rules that apply. Examples and hypotheticals are described in this article for the purpose of illustrating these general rules, however no information within this article should be relied upon when analyzing a specific real-life situation.

For each real-life situation that the reader experiences, it is necessary that the reader consult with an experienced construction law attorney to ensure that the reader's specific situation is evaluated. The laws and rules affecting mechanic's liens and construction are extremely complex and no attorney can provide in a writing an explanation that will empower the reader to use only the information in an article to evaluate how the law will apply to a specific real-life situation. In other words, the reader should not rely on the information in this article when addressing a particular real-life situation.