In the construction industry, contractors, subcontractors, and suppliers often struggle to get paid. Chasing down property owners, general contractors and others can be a hassle. It also takes time away from growing your business.
Fortunately, there is a legal mechanism that contractors and suppliers can use to get paid for their work. A New Mexico mechanics lien grants the unpaid party a security interest in the property being improved. An adequately filed mechanics lien is a tool that can be used to ensure payment for the work performed or goods supplied on a construction project.
There are multiple steps that must be followed in order to comply with NM mechanics liens laws. At Forbes & Forbes, we have significant experience in all aspects of construction law, including filing for, obtaining and enforcing mechanics liens. Give our law office a call today to schedule a consultation with a New Mexico mechanics lien lawyer.
Mechanics Lien Laws in New Mexico
A mechanics lien is a legal device used to obtain payment for work performed or materials supplied on a construction project. Like other states, New Mexico has laws that govern the issuance of mechanics liens. This statute outlines who qualifies for a mechanics lien, the process of filing for a lien, and how to enforce a mechanics lien in NM.
The first step in the process is determining if you are eligible to file a lien. New Mexico law allows “every person performing labor upon, providing or hauling equipment, tools or machinery for or furnishing materials to be used in the construction, alteration or repair of” a construction project to file a lien. Potential lien claimants include contractors, subcontractors, suppliers, architects, engineers, design professionals, and surveyors.
However, in order to seek a mechanics lien, you must be licensed if required under the Construction Industries Licensing Act. If you are unlicensed, then you won’t be able to seek a mechanics lien. In some cases, you may not even be able to file a lawsuit to recover the money owed for the work performed.
If you are eligible to file a mechanics lien, then the second step is to send preliminary notice, if required. Generally, subcontractors, suppliers, and others must send preliminary notice within 60 days of the first date that work was performed or materials were supplied on a project. Prime contractors are not required to submit a preliminary notice.
The third step in the process is to actually file the mechanics lien. For prime contractors, the lien must be filed within 120 days of the project completion. Subcontractors, suppliers, and others without a direct contract with the property owner must file a mechanics lien within 90 days of completion of the project.
The lien itself must contain the following information:
- Claimant’s information;
- Statement of demand after deducting credits and offsets;
- Property owner’s name;
- Hiring party’s name;
- Statement of the terms and conditions of the contract; and
- A description of the subject property is sufficient for identification (a legal description is not required).
The lien must be signed and verified under oath (notarized). Once completed, a lien should be filed and recorded with the county recorder’s office in the county where the property is located. You are not required to serve the lien upon the property owner, as filing the lien is considered sufficient notice under NM law.
The fourth step in the process is to enforce the lien if payment has not been received. In New Mexico, all mechanics lien holders have a period of 2 years from the lien’s filing to start a foreclosure action to enforce the lien. If you fail to do so within this time period, then the lien will no longer be valid.
Do I Need a Lawyer to File for an NM Mechanics Lien?
You are not required to have legal representation to file a mechanics lien. However, there are many reasons why it makes sense to hire a New Mexico mechanics lien attorney to assist you with obtaining and enforcing a mechanics lien.
As an initial matter, the process of obtaining a mechanics lien is incredibly technical. If you fail to comply with some aspect of NM’s mechanics lien law – such as not sending a preliminary notice on time – then you may lose your right to obtain a lien. Similarly, if you don’t properly complete, file, and record the lien, you may not be able to use the lien to obtain payment.
A lawyer can assist you with every aspect of the process to ensure that your lien is properly filed in accordance with New Mexico law. This starts with sending a preliminary notice to the property owner when required. Your attorney can make sure that the pre-lien notice is filled out correctly and served on the property owner as set forth in the lien laws.
If the general contractor or property owner is slow to pay, then your attorney can begin the process of filing the lien. They will ensure that the lien complies with all legal requirements, including getting the lien properly filed and recorded in the right county. Each county recorder’s office has different rules, so your attorney can make sure that it is filed correctly.
Finally, if the property owner or general contractor does not pay you for your work or materials provided, then your New Mexico mechanics lien attorney can institute a foreclosure action. Lien foreclosure is a lawsuit, so it is something that you should not undertake without the assistance of a lawyer. Being represented by counsel from the start of the process can make it easier to enforce your lien if necessary.
How Our Law Firm Can Help
Obtaining a mechanics lien in New Mexico may seem like a relatively straightforward process, but failure to comply with any aspect of the law regarding liens can render your lien invalid. As a result, you may not be able to secure payment for the work performed or materials provided on a construction project. For this reason, it is vital that you work with an experienced New Mexico mechanics lien attorney to protect your rights.
Based in El Paso, Forbes & Forbes represents individuals and companies in business law, real estate, and construction matters throughout Texas and New Mexico. We have deep experience in all aspects of mechanics liens, from sending preliminary notices to filing liens to enforcing liens. Give our law firm a call today at 915-533-5441 or fill out our online contact form to schedule a free consultation with a member of our legal team.