So You Messed Up Your Mechanic’s Lien
If you are in business long enough, it is going to happen. Perhaps you did not get information to your collection attorneys on time. Maybe you miscalculated the last day of work and missed your deadline. Perhaps the lien is in the wrong name, or wrong amount.
For these or many other reasons, you may find that you cannot enforce your mechanic’s lien (or that it is unwise to do so). In this case, you are not necessarily without options. Your right to collect against the non-paying homeowner under your contract remains intact. If you are a subcontractor, your Trust Fund remedies against the general contractor might still be available. You can also attempt to collect under theories of unjust enrichment or others that do not necessarily rise and fall with the validity of the lien. That is, if the homeowner owes you money, you can sue on the contract independent of the mechanic’s lien itself.
Of course, without a lien, you are typically in the same position as a credit card company. You are an unsecured creditor. The biggest difference between suing the homeowner individually on the contract and suing to foreclose your lien is basically the time it takes you to get to the property. If you successfully foreclose a lien, you typically get a judgment for foreclosure immediately upon judgment and you can begin foreclosure proceedings. The case might also be more limited, letting your attorney move it more quickly through Court. Without the lien, it might take longer to get to a judgment, and then you have to perform collection activity after the judgment to finally attach the house and foreclose. Even worse, if you have no lien or lis pendens on file during the lawsuit, the property might be sold to someone else before you get to a judgment!
Depending on the facts of the particular collection, our firm has many ways to keep you and your collateral protected during the proceeding. Whether you can use these protections — and whether there is actually enough value in the collateral to make it worthwhile — are important questions we can only answer after a consultation. So, while nothing in this post is legal advice, you can contact us to set up a meeting to discuss your situation if you need legal advice.