Construction can be a tough business and when something goes wrong on a construction project, as it often does, a mechanic's lien will often follow. The mechanic's lien can be extremely frustrating for those that believe the lienor is not due any money. This guide will help you challenge that lien
Review the mechanic's lien and gather information
Once you receive the mechanic's lien your first reaction may be anger. But once the anger subsides you need to review the lien and do some investigating. If you are the owner of the property you may not know who the lienor is. Talk to your general contractor and find out who the lienor is, what work was performed, and if they were not paid, why were they not paid. If you now the lienor, call him, her or it and find out why a lien was filed if you do not believe any money is due.
Dispute the mechanic's lien in writing
Whether you are the owner challenging the lien or a general contractor challenging the lien of a subcontractor or supplier, you should put the lienor on written notice of the disptued lien. Explain why the lien is improper and demand its immediate removal.
Demand an Itemization
Lien Law Section 38 gives the property owner and the general contractor the right to demand that the lienor provide an itemized statement of the labor and materials claimed to make up the lien. This right should be exercised. Lien Law Section 38 is very particular about the method and manner of serving the demand so if you are not sure this is a good time to get an attorney involved. Its generally not expensive and can help set up your lien defense down the line.
If the lien is on a residential property, verify that the lienor is licensed
For home improvements on residential property the lienor must be licensed in the county where the property is located. Call your local licensing board (usually the Department or Office of Consumer Affairs) and ask to check whether the lienor has a license. Some counties also allow you to search online to verify the license status.
Determine whether there is a "facial defect" to the mechanic's lien
After you have done your investigation and obtained your verified statement you want to begin challenging the validity of a lien. The quickest and "easiest" way to get rid of the lien is if there is a "facial defect" on the lien. That is the lien itself, even if the statement within it are taken as true, contains a substantive defect that renders the lien invalid. A facial defect can be an incorrect property address, a date of last service that puts the lien outside of the permissible lien period or any one of a variety of other problems. At this point because of the intricacies of the lien law, you really should hire an attorney to review the lien for you. If there is a facial defect, you can file a petition under Lien Law Section 19 to have the lien discharged. A petition is a special proceeding brought in a Court to have the lien declared void. It is typically low cost and fairly quick (as legal proceedings go).
If there is no facial defect in the lien, demand foreclosure
If the lien itself appears valid on its face, serve the lienor with a demand pursuant to Lien Law Section 59. One of the most common reasons that a lien is challenged is because no money (or less money) is due to the lienor than the lien says. However, this is not a facial defect. To challenge the amount of the lien you must force foreclosure. Once the Section 59 demand has been served on the lienor, the lienor will have 30 days to commence a foreclosure action or "show cause" as to why the lien should not be discharged. If the lienor fails to commence a foreclosure action in the requisite period, a petition can be filed to discharge the lien for failure to prosecute. If the foreclosure action is commenced, you may then raise any defense you wish to the lien (including offering evidence that the amount in the lien is not due).