Would a company have lien rights if the NTO was sent timely but the property sold before a lien was filed and has new owners?
2 replies
Dec 2, 2019
Generally, mechanics lien rights run with the project property - not against any one individual. So, if a claimant has performed work on a property and preserved their right to lien, they'll typically be entitled to file a mechanics lien even if the project property is sold before a claim can be filed. Levelset discusses that here: What Happens If I Filed My Mechanics Lien After the Property Was Sold?
Of course, there are recovery tools that can be helpful for getting paid without having to resort to an actual lien filing. In fact, merely threatening to pursue a mechanics lien - with a document like a Notice of Intent to Lien - is often enough to get paid. By sending a Notice of Intent to both the seller and the purchaser of the property, as well as the project's general contractor, it can put pressure on both parties to resolve the issue before the dispute becomes more serious. More on that here: What Is a Notice of Intent to Lien and Should You Send One?
Further, less official recovery tools - like sending a simple invoice reminder or payment demand letterto a customer - might also be helpful in recovering payment.
Yes! I have actually dealt with the scenario for a client, and your lien should be valid despite the ownership change. You should consult with an attorney to confirm that though and make sure there's not some unique fact that changes the answer.