Mechanics Lien: What to do if you miss your deadline

Leveraging lien rights is the most powerful way to force payment in construction - but missing a deadline doesn’t mean it’s time to give up hope. Watch this video to learn what you can do to maximize your chance of getting paid.

1. Double check your mechanics lien deadline (0:13)
Mechanics lien deadlines can be tricky to calculate and sometimes you may still be within your lien deadline even though it may not seem that way. It’s worth double checking.

For example, let’s say you’re a concrete supplier on a California residential project, and you finished supplying the concrete almost 3 months ago. You’re still not paid yet, and now you might feel like you’re approaching the 90-day lien deadline and need to file a lien right away. But here’s a plot twist: in California, the deadline to file a lien is actually 90 days from the completion of the entire project, not from when you last furnish labor or materials. If your project is lengthy, you might have a lot longer than you thought to file a lien. We’re not saying you should delay filing a lien specifically for this reason, but it might be worth it to double check your mechanics lien deadline.

Additionally, some states have two-part or “multiple” mechanics lien deadlines. Here’s another example. Imagine you’re the same concrete supplier, but this time, you’re working in Illinois. If you file a lien within 4 months of the completion of the project, your lien will be effective against the original owner and any subsequent owners of that property - including those that purchase the property before the lien is filed. But, if you file the lien within up to 2 years from the completion of the project, the lien will still be effective, as long as the property isn’t sold before the lien gets filed.

2. Send a simple invoice reminder (1:49)
Invoice reminders are just like they sound - they’re a formal reminder that your invoice remains open and unpaid, despite payment being overdue. If there’s any hope for keeping the relationship with your customer in a good place, an invoice reminder can be useful to prod the customer into paying what’s owed while also strengthening the relationship with them. Opting for more serious measures will often be warranted and even appropriate, but invoice reminders could still be a valuable route.

3. Turn up the heat with a payment demand letter (2:17)
Even if lien rights are lost, other legal claims will be available if you’ve gone unpaid. Drafting a letter that shows you know your legal rights and that you aren’t afraid to use them will send a strong message to the customer. So, sending a demand letter which includes specific legal threats and sets a hard deadline for making payment may be enough to push your customer to do the right thing.

4. Litigation is still on the table even if you can’t file a lien (2:24)
Depending on the situation, claims like breach of contract, unjust enrichment, claims under your state’s prompt payment laws, retainage claims, and many others might be useful. Plus, if it’s a smaller payment claim, then going to small claims court may even be an option - that will help keep court costs to a minimum, speed up the timeline for the dispute, and keep lawyers out of it.

5. Turn to your collections department or external collections partner (3:18)
If you have an internal or external collections department or partner, you can send them the claim early in the process, along with all the available supporting information - and that may yield good results. Sending the debt to collections isn’t always a great option, but they’re literally pros at that part of the job.