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How does the 'Date Labor or Materials First Delivered' apply to a Subcontractor whose scope of work includes detailing, fabrication and installation?

New MexicoLien Deadlines Preliminary Notice

When putting in the "Date Labor or Materials First Delivered", should I use the date that our office very first begins detailing the project (in which we are paying for labor to our detailing employee), at the time the materials are delivered to our fabrication shop and "shop labor" begins the fabrication process, OR NOT until materials and/or labor occurs ON SITE (upon installation)?? Please advise. (While I am entering NM state below, I am really curious how to answer this question nationally, since our projects are spread out all over). Thank you!

1 reply

Apr 18, 2018

That's a great question! It's hard to provide an answer that will work for every state, but let's look at the general consensus and then New Mexico. Generally speaking, for mechanics lien purposes, a first furnishing date will constitute the first day that lienable work (or, "work that may be liened") is performed. So, if a claimant is in a state where design or engineering work is lienable work, that work may qualify as first furnishing. Further, the same is true with specially fabricated materials - individual states have their own rules regarding that type of work. We discuss that idea in depth in this post: Specially Fabricated Materials and Mechanics Lien Rights – An Overview.. Anyway, in most states, work must improve the property in order to be lienable. Thus, work done in preparation off-site might not be lienable in a given state, and might not be considered for a first furnishing date. Ultimately, though, a first furnishing date will likely only affect the timing for sending preliminary notice - mechanics lien deadlines typically run from last furnishing or the project's completion. Since there's typically no harm in sending preliminary notice early. So, when in doubt, using the earlier of two potential dates might be the safer move when a claimant is determining their first furnishing date for preliminary notices. Changing gears, let's look at first furnishing in New Mexico. In New Mexico, those who did not contract with the property owner or the original contractor must deliver Preliminary Notice to both the owner and the original contractor within 60 days of first furnishing labor and materials (if the project is not a residential property with fewer than 4 dwellings). When preliminary notice is required, it must be sent within 60 days of first furnishing. Late notice can be sent, but a notice sent late in New Mexico will only preserve the lien rights for the 30 days of work prior to sending the notice (and then the work provided afterwards). Further, there is no penalty for sending preliminary notice early. Thus, on New Mexico projects, it's a good idea for a claimant to send their notice based on the earliest possible date that might be considered first furnishing.

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