Filing a mechanic's lien is one of the more aggressive -- but necessary -- ways that a general contractor, subcontractor or supplier can collect payment for completed work. It is a very complex process, and in articles on our website, we discuss some of the challenges of filing a mechanic's lien. For instance, we discuss the complications that can arise if the developer or owner files for bankruptcy.
This is just one of the many obstacles that can stand between you and the payment you deserve. Several others can arise, including mistakes you might make if you are not familiar with the legal process of filing a mechanic's lien. Below, we discuss a few common mistakes that you would be wise to avoid in an effort to collect payment.
- Filing in the wrong jurisdiction: As noted in this article on mechanic's liens, legal claims must be filed in the proper Court. If you and your business are in Johnston County, but the property on which you worked is in Wake County, you must be sure you file the claim in the county where the project was located. Failure to do so could cause you to lose your rights in certain circumstances.
- Missing important deadlines: Any delay created through inaction or mistakes like filing in the wrong jurisdiction can make it all but impossible to keep up with the strict deadlines in place for mechanic's liens. In North Carolina, you have 120 days from the day of "substantial furnishing" to file a lien. A lawsuit must be filed within 180 days from the last substantial furnishing. You can lose your lien rights if you miss these deadlines.
- Failure to notify: As a subcontractor or supplier, you must be sure you are complying with your obligation to notify the appropriate parties of the work being done, products being provided and/or services being supplied. Failure to do this can impact your ability to recover the monies you are owed.
These mistakes can prevent you from collecting payment through a mechanic's lien. However, they are easily avoidable if you have legal guidance and support.