A Contractor’s Guide to Protecting Payment Rights and Avoiding Missed Lien Deadlines

It is essential for all contractors to know their rights regarding payment. There is one thing that all contractors must understand – lien deadlines are crucial in the process of pursuing payment for a contract that has been breached. If you are unaware of the processes involved, it is entirely possible for you to miss your chance of receiving payment for your work in case the hiring agency fails to complete the work. Understanding how the lien process works can save you invaluable time and money.

Lien deadlines are one of the most important factors in the repayment timeline if you are a contractor. This is one of the hidden clocks that impacts the process of seeking compensation, and many contractors are not at all aware of this aspect of the process of seeking payment when something goes wrong with a job.

Table of Contents

• What Are Lien Deadlines?
• What is the Difference Between a Subcontractor and a Prime Contractor?
• How Can I Avoid Missing Deadlines?
• Tracking Completion Dates and Processes is Critical for Contractors
• Frequently Asked Questions

What Are Lien Deadlines?

In contracting, the Notice of Completion for a job can shorten lien deadlines significantly. This notice is a formal document that is filed by a property owner or general contractor that states what the official completion date of a project is. If you are not aware of this date, you can easily miss your chance to secure compensation for unpaid labor on the job. There are timelines associated with filing a lien after this notice has been filed, and you cannot afford to miss this window if you have not been paid by the company or person who hired you to work on a construction job.

One of the reasons that many contractors miss out on filing for compensation is that they were not notified that the Notice of Completion was filed. You will only get notice of this step being taken by the contractor for the project if you have sent in a preliminary notice. Notices of Completion can be filed even while sub-tier trades are still actively working on invoicing, which can catch contractors off guard.

Lien timelines vary by state, and you must follow the requirements in each state. For example, in California, you have 90 days from completion of a job to record a lien, but the Notice of Completion reduces this timeframe to 30 days. In Nevada, you will only have 40 days to file a lien once the Notice of Completion has been filed.

This is why you need to understand the lien requirements in your state and how a Notice of Completion can impact your ability to secure payment for your work.

What is the Difference Between a Subcontractor and a Prime Contractor?

The kind of work that prime and subcontractors do might be the same, but the repayment schedule for those who need to file a lien can vary depending on your position in the hiring chain. The prime contractor will usually get 60 days instead of 30 days to file a lien in most states. If you are not sure if you will be considered the prime or the subcontractor in a given situation, you should assume that you have less time to file just to be safe.

If the Notice of Completion is filed while work is still going on for a project, early filing might be denied. Be aware that the filing of Notices of Completion can be impacted by the determination that work is still going on for the project, and the longer deadlines might be adhered to rather than the shortened ones associated with a Notice of Completion.

How Can I Avoid Missing Deadlines?

There are some simple steps that you can take to ensure that you don’t miss lien deadlines.

#1: Be sure that you send a preliminary notice

This legal notice is one of the only ways that you can protect your ability to be notified that a Notice of Completion has been filed. You will also want to be sure that you track the project within its county and recording office location so that you are able to watch from the first day of the project and track the completion details and information.

#2 Monitor Things

You will have to be sure that you keep track of what is going on with the contracts you are working on. This can be time-consuming, but you cannot afford to miss key changes or shifts in the life cycle of a project.

#3 Real-Time Alerts

Be sure that you have real-time alerts turned on for your tracking processes. You need to be made aware the moment that a Notice of Completion enters the public record so that you have the maximum possible amount of time to file your lien if it is required to secure payment.

#4 File Your Lien Fast-Track

One of the best ways to be sure that your lien will be considered is to file it well before the 30 or 40-day cutoff point. You will want to get the notice of your lack of payment filed as soon as possible so that you are likely to be paid for your time.

Tracking Completion Dates and Processes is Critical for Contractors

Be sure that you are aware of the way that lien filing works in your state, and also be sure that you know what your lien timeline looks like based on the Notice of Completion for each job that you have worked on. If you have not been paid, you need to start tracking the status of the project right away to be sure that you don’t miss your filing date.

Prime and subcontractors often have different filing timelines, and one of your duties as a contractor is to understand where you fall in the chain of subs and prime contractors on a job as well. You don’t have to give up your right to seek compensation for unpaid work. You just need to be sure that you are tracking completion dates and

Frequently Asked Questions

What happens when you fail to meet a mechanic’s lien deadline?

Failure to meet the statutory deadline for filing means you lose the right to file a mechanic’s lien against the property and must rely on longer breach-of-contract claims instead.

Will filing a preliminary notice result in payment?

The only thing it does is protect your right to file a mechanic’s lien should a payment not be received.

Can a Notice of Completion be submitted before punch-list tasks are finished?

Owners file the notice right after significant completion and this would initiate the shortened lien period, even if some minor tasks remain unfinished.

Are lien periods extended due to negotiations for payment? 

There are no extensions to statutory deadlines based on negotiations relating to payments.