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Lien Claim Reminder

Over the past few weeks, we have experienced an uptick in lien claim requests. Since the Great Recession wound down and the revisions to the lien law kicked in, it has been difficult to determine whether the changes to the law were reducing the number of liens or if that reduction was simply a reflection of a growing economy. The answer is probably a bit of both. Now, there are new subcontractors entering the market with less experience and more opportunities to stub their toes. That may well account for the uptick.

A reminder – there is no such thing as a “friendly” lien. If you serve a lien and have to initiate a lawsuit to perfect it, your customer is going to be the first party named and the first claim is going to be for their breach of the contract with you. You may well still have a claim even if your customer has been paid in full, but owners and contractors will fight that claim vigorously. An owner is only at risk of paying twice (or more than its contract amount) if it pays someone after receiving the lien, so once the money owed downstream has left the owner’s hands, there may be nothing left for your lien to catch. The same is true for the contractor.

A lien is not a guarantee of payment. Its value depends on what money remains in the pipeline. If the ne’er-do-well in the process is your customer then expect to incur significant legal fees to find out what, if anything remains to be captured.

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