Now that Spring has sprung, contractors and subcontractors, suppliers, and other construction professionals will likely be seeing a seasonal upswing in demand for private real estate improvements and projects. Along with more work, however, comes the need to secure payment for your hard-spent labor, services, materials, or equipment provided in the course of your projects.
While regular remedies may exist at law for breach of contract upon non-payment by someone who has hired a construction professional for a visible improvement, Minnesota law gives contractors an additional remedy: filing a mechanic’s lien against the property subject to the improvement. These invaluable legal tools appear in public property records and create a cloud on title, leading to headaches for property-owners that can only be cleared by paying off the lien.
While mechanic’s liens are created automatically by operation of law, in order to perfect the lien, the lien claimant must provide pre-lien notice, if necessary, and record a mechanic’s lien statement and serve it on the property owner. A lien statement is a public notice that the lien claimant has contributed improvements to real property and is used to alert owners and other parties with potential interests in the property that money is due for the improvement. Importantly, recording and service of the lien statement must occur within 120 days of the last date of the contractor, lien claimant’s work! Minnesota courts hold claimants to a strict burden: “failure to file the lien statement within 120 days after completion of the work defeats the lien.” David-Thomas Companies, Inc. v. Voss, 517 N.W.2d 341, 343 (Minn. Ct. App. 1994).
So, if you are a contractor, subcontractor, laborer, supplier, architect, land surveyor, or engineer, and you have contributed labor or furnished skill, material, or machinery – i.e. you’ve put “a shovel in the ground” – and haven’t been paid, don’t wait on your claim. Contact a legal professional to help record and serve your lien before your claim expires and you are out of luck in recouping your hard-earned money.