Is It Possible For Your Mechanic's Lien To Be Foreclosed On?

You have not received payment from the owner or general contractor. So you put a mechanic's lien on the house. You hoped that by filing a lien, you would be compelled to pay. That wasn't the case. You've been served with a Notice to Foreclose on your Lien. Is it possible to foreclose on your mechanic's lien due to a non-paying customer?

It makes no difference that you filed a mechanic's lien because the same contractor or building owner failed to pay you for your work. It makes no difference if you filed a mechanic's lien in order to get paid. You may be forced to foreclose on your mechanic's lien by this same client.

Your client may provide you with a Notice under Claim Law Section 59, which requires you to commence a foreclosure action to enforce your lien within thirty (30) days. The consumer is not required to show that they paid you for the services or goods you provided. To secure the lien, they don't have to post a bail.

If a mechanic's lien has been filed but the lienor has not paid, the mechanic's lien will be foreclosed (enforced). A mechanic's lien foreclosure action is a lawsuit filed by an unpaid lienor in order to compel the sale of the property so that the lien can be fulfilled from the sale profits.

If a lien is shown to be incorrect in any manner, it might be discharged. It's possible that the amount, date, or other details are erroneous.

 

The Consequences of a Customer Forcing You to Foreclose on a Mechanic Lien

The client is urging you to spend more money in order to further pursue your lien-foreclosure rights by properly serving the notice. You'll lose your lien rights if you don't comply.

Here's why foreclosing on a lien is problematic: You may have filed the lien without intending to ever foreclose, or the expenses may outweigh the advantages. To mention a few, these expenses include court and attorney fees. By foreclosing, your consumer is effectively calling your bluff.

If you don't want to foreclose on the debt, what are your options? Will there be no way to be paid? That depends on who hired you and who the law holds accountable. You may be able to file a civil action to force payment regardless of the lien, as we previously mentioned.

It's crucial to understand your entitlement to collect payment and your chances of getting paid, whether you foreclose on the mechanic's lien or not. Other than foreclosing on a lien, there are alternatives to collect on these obligations.

If you received a demand under Lien Law Section 59, or if you want to assert your right to payment with or without a mechanic's lien foreclosure, call us and we'll look into additional options for collecting on these obligations without foreclosing on a lien.