Promises Won’t Bring Massachusetts Mechanic’s Lien Rights Back
In Massachusetts, a project owner promised to pay its subcontractor, so the subcontractor allowed its suit deadline to expire. Unfortunately for the subcontractor, the owner’s promise to pay was void, much like the subcontractor’s ability to recover $196,500 under the Massachusetts mechanic’s lien laws.
Massachusetts Mechanic’s Lien Law
In Massachusetts, securing lien rights often begins with serving a Notice of Identification upon the prime contractor within 30 days from first furnishing. Serving the notice obligates the prime contractor to provide a copy of the Notice of Substantial Completion or Notice of Termination if one is filed.
The lien itself is a two step process: Notice of Contract and Statement of Account.
Notice of Contract:
File a Notice of Contract as early as possible after the execution of your written contract, but no later than the earliest of:
60 days from the recording of a Notice of Substantial Completion,
90 days from the recording of a Notice of Termination, or
90 days from the last furnishing of materials or services by the prime contractor or the subcontractor.
Material suppliers and subcontractors:
Serve a copy of the Notice of Contract upon the owner.
Statement of Account:
File a Statement of Account no later than the earliest of:
90 days from the recording of a Notice of Substantial Completion,
120 days from the recording of a Notice of Termination, or
120 days from the last furnishing of materials or services by the prime contractor or the subcontractor.
In the event a claimant isn’t paid, suit to enforce the mechanic’s lien should be filed within 90 days from the filing of the Statement of Account.
The Case of the Promise and the Unpaid Subcontractor
D5 Iron Works, Inc. vs. Danvers Fish & Game Club, Inc. was heard before a Massachusetts Appeals Court. According to the legal decision, D5 Iron Works, Inc. (D5) was hired by Patriot Range Technologies, Inc. (Patriot) to furnish materials and labor to a rifle range owned by Danvers Fish & Game Club, Inc. (Danvers).
D5 filed its Notice of Contract in accordance with statute, for its initial furnishing. D5 then amended the Notice of Contract to include an approved change order, which increased the contract amount. Danvers promised to pay D5, though D5 secured its mechanic’s lien “in case things didn’t pan out.”
D5 filed its initial Statement of Account timely but allowed its suit deadline to pass (90 days from the filing of Statement of Account), based on additional promises from Danvers.
D5 filed a second Statement of Account several months later. According to Stan Martin, author of A Promise to Pay Doesn’t Extend Lien Deadlines, D5 argued the second Statement of Account extended its deadlines.
“When no payment was made, the sub tried to resurrect its lien rights by taking steps 1 and 2 again, but by now the deadline for those steps had passed under the lien law. The sub argued that the lien law deadlines should be equitably extended, but the trial court, and then the Appeals Court, disagreed. The sub’s lien rights had lapsed when the deadlines passed, regardless of any promises of payment that may have been made.”
Parting Thought from The Court Decision
The court referenced a statement from BloomSouth Flooring Corp. v. Boys’ & Girls’ Club of Taunton, Inc., 440 Mass. 618, 624 (2003), within its decision, and it’s worth sharing: “[R]eluctance to ruffle anyone’s feathers by early notification, however understandable or common in the industry, does not change the plain meaning of the statute.”
Your right to secure payment is only your right if you adhere to statute. You should be paid for materials & services provided. If you aren’t paid, secure and enforce your mechanic’s lien. Promises don’t pay the bills.