Liens & Bond Claim Rights in New Mexico
Curious about mechanic’s lien & bond claim rights in New Mexico? Today’s post is for you because we’re in a New Mexico state of mind!
Mechanic’s Lien Rights in New Mexico
If you are furnishing to a private project in New Mexico, statute requires that you serve a preliminary notice upon the owner or the prime contractor within 60 days from first furnishing materials or services.
As a best practice, serve both the owner and the prime contractor with the notice.
If you missed the notice deadline, you can serve a late notice. However, the lien, when later filed, will only be effective for materials and services provided 30 days prior to serving the notice and thereafter.
The preliminary notice may not be required if: contracting directly with the owner, contracting directly with the prime contractor, the lien amount is for $5,000.00 or less, or the property is residential, with 4 units or less.
The notice may not be required, but you should always serve a preliminary notice. Serving preliminary notices reduces the need for a lien by 96%!
That means, 96% of the time, serving a preliminary notice will be enough to ensure payment.
If you do need to proceed with a mechanic’s lien and you have contracted directly with the owner, the lien deadline is 120 days from completion of the project. If you contracted with the prime contractor or subcontractor, your lien deadline is shortened to 90 days from completion of the project.
Bond Claim Rights in New Mexico
Furnishing to public projects in New Mexico is a bit different than private projects. Public projects don’t have a required notice.
“But, wait, you JUST said to serve a notice even if it’s not required!”
You’re right, and there is a notice that could be served: a non-statutory notice.
Unlike private projects, there is no statute requiring a notice on public projects. A non-statutory notice is not required by law, but serving the notice alerts all parties to your involvement on the project & that may be key to getting paid!
New Mexico is one of the few states that has payment bond requirements for both general contracts and subcontracts. Generally, payment bonds are required:
- for general contracts exceeding $25,000.00.
- for subcontracts of $125,000.00 or more.
Do Contractors Have to be Licensed in New Mexico?
Yes, according to a post written by Sonya R. Burke of Modrall Sperling. And if you don’t have a license, you don’t have lien rights.
“New Mexico requires contractors to maintain proper licensure through the state and to furnish and maintain evidence of financial responsibility. NMSA 1978, § 60-13-1, et seq… Contractors that are not licensed in New Mexico may not file a claim of lien or maintain suit for payment for unlicensed work. See NMSA 1978, § 60-13-30; Reule Sun Corp. v. Valles, et al., 226 P.3d 611 (N.M. 2009).”
To learn more about building codes, permitting, insurance, and construction contracts, take a look at Burke’s article: “Construction Law in New Mexico.”
Questions about lien & bond claim rights? Chat with us via live chat, email or give us a call!
NCS Blog & Upcoming Webinars
In December 2018, the Ontario legislature passed an amendment to its newly revamped Construction Act (formerly Construction Lien Act), which may impact the calculation of construction lien deadlines. Details in Ontario Lien Alert! Ontario’s Construction Act Transition Period & Your Deadlines.
- February 5: An Advanced Look at the UCC Process
- February 12: The UCC – A Powerful but Underused Collection Tool in Construction Lending
- February 19: An Advanced Look at the Lien & Bond Claim Process
- March 5: Implementing a UCC Program – Overcoming Obstacles
- March 19: Implementing a Lien/Bond Claim Program – Overcoming Obstacles
March 18-March 20 we will be at the CRF 2019 March Forum in Tucson, AZ
Don’t forget to bookmark our Events Page!