A lesson in filing your lien on time.
Homebuilders face a daunting challenge. Apart from organizing numerous sub-trades, meticulously detailing the critical path of the construction and responding to the many requests, change orders and wish lists often presented by first-time homebuilders, they must constantly manage cashflow and be aware of their legal rights.
Perhaps no legal right is more important to a new home contractor than those provided for by the Mechanics’ Lien Act. However, as important as those rights are, they are also equally fragile. They exist solely as a product of legislation. As a result, course strictly interpret the rights under the Mechanics’ Lien Act and, failing strict compliance, those rights simply evaporate.
Recent case Mackin v. Urban Farmer (1993) Ltd. illustrates the evaporation of the building contractor’s legal rights.
In that case, the homeowners moved into their newly-built house on August 31, 2012. On that date, an architect’s certificate certified that the house was substantially completed. Some time later, in mid-December, 2012, the building contractor replaced a pane of glass in the house but other than that, did no work at the home. Then, in early February, 2013, the building contractor filed a Mechanics’ Lien.
Those familiar with the Mechanics’ Lien Act will know like the back of their hand that lien rights expire sixty (60) days from the date of substantial completion. In this case, the substantial completion date was December 8, 2012 – certainly not two months later in February of 2013. Little wonder then that the building contractor’s claim for lien was vacated and costs of $1,500.00 awarded to the hapless homeowners.
The lesson? File your lien on time. Don’t rely on nominal amounts of work or small bits of repair to file a lien. When the majority of the work is completed, start counting 60 days and, if not paid, don’t hesitate to enforce your legal right. Sometimes, the difference between getting paid and losing out is as simple as counting the days on the calendar.