Sunday, November 13, 2016

Don't wait too long to file your mechanic's lien

As the end of the year quickly approaches many companies will begin reviewing their accounts receivable and decide what to write off and what to pursue.  While mechanic's liens have deadlines to file that does not mean you should wait until the last minute.   There can be practical reasons why filing a mechanic's lien early can lead to better recoveries.   Some of the reasons include: 1) the recency is primacy principle.  The long you wait to file the lien the more likely it is that the specifics of your work and your claim will become blurred.  Deal with the claim quickly while details are fresh; 2) if the owner pays out to others the lien fund may be exhausted before your lien is recorded.   Always remember that a mechanic's lien is only as good as the fund remaining.  If you wait to long, others may be paid leaving you holding an empty bag; and 3) an early lien can put pressure on the project and force the key players to deal with you to avoid problems (such as lenders refusing to fund).  

When in doubt, speak to your attorney about the pros and cons of filing your mechanic's lien but always remember that conversation is better had months before the deadline expires - not days.  

Vincent T. Pallaci is the managing member of Kushnick Pallaci PLLC.   Kushnick Pallaci PLLC regularly counsels clients on filing and enforcing mechanic's liens.

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