In the construction industry, there is always a risk of nonpayment or slow payment – particularly for subcontractors and suppliers. A breach of contract lawsuit is one way to resolve the issue – but construction disputes can be expensive and time-consuming.
New Mexico provides an alternative to filing a lawsuit for failure to pay. Subcontractors, suppliers, and others who provide labor or materials to a construction project can file a mechanic’s lien against the real estate that was improved. This creates an encumbrance on the property that cannot be cleared unless and until payment is made.
The law firm of Forbes & Forbes provides experienced legal counsel to subcontractors and others in the construction industry. We assist with a wide range of business matters, from formation to contract disputes to filing a lien. Reach out today to schedule a consultation with an experienced New Mexico mechanics lien attorney.
New Mexico Mechanics Liens: The Basics
In its simplest terms, a mechanics lien is a legal tool that allows a contractor, subcontractor, or supplier to secure payment for their work on a construction project. A mechanic’s lien gives the lien claimant (the unpaid party) a security interest in the property. Once a mechanic’s lien has been properly filed, the property owner will have a “cloud” on the title that they will have to resolve if they want to sell the property or finance it.
Under New Mexico law, anyone who performs labor; provides or hauls equipment, tools, or machinery; or furnishes materials to be used in a construction project can file a mechanic’s lien. Design professionals, architects, engineers, and surveyors may also seek a mechanic’s lien.
Once a lien has been properly filed, then it creates a security interest in the property itself. The lien claimant (subcontractor) can release the lien once they have been paid. Otherwise, they may choose to enforce the lien, including by filing a foreclosure action against the real property.
Importantly, a mechanic’s lien can only be filed on a private construction project. That is because a lien cannot be placed on the publicly-owned property. For public works projects, subcontractors and suppliers can file a claim against the general contractor’s payment bond.
How Can I File a Mechanic’s Lien in NM?
There are multiple steps that must be followed in order to file a mechanic’s lien. If you fail to comply with New Mexico’s lien laws, then your lien may not be valid. A mechanics lien lawyer in NM can assist you with the process.
As an initial matter, there are specific deadlines that must be followed. For subcontractors that do not have a contract directly with the property owner or the general contractor, the preliminary notice must be filed within 60 days of starting the project. This notice is only required when a sub does not have a direct contract, the claim is for more than $5,000, and the project is not on a residential property with fewer than 4 dwellings.
Otherwise, subcontractors and suppliers are not required to file a preliminary notice. However, they may choose to send a notice of intent to lien in the event of slow payment, in an attempt to facilitate a resolution. This notice is not required under New Mexico law.
A mechanic’s lien must be filed within 90 days of completion of the project for entities without a direct contract with the property owner. Subcontractors that have a direct contract with the property owner have up to 120 days after the completion of the project to file a mechanic’s lien. If you do not file a mechanic’s lien within the correct time period, then the lien will not be enforceable.
A mechanic’s lien must contain the following information:
- Claimant’s information (full name and address)
- Hiring party
- Property owner
- A description of the property (which does not have to be a full legal description, but it is important to be as accurate as possible)
- A description of labor or materials provided
- A statement of the terms of the contract; a copy of the contract itself can be attached
- Lien amount
Once the statutory form has been completed, it must be filed within 90 or 120 days at the county clerk’s office where the property is physically located. There is typically a filing fee associated with filing a mechanic’s lien, which may vary by county. A mechanic’s lien may be filed in person at the county clerk’s office, via mail or FedEx, or (in some counties) filed online.
New Mexico law does not require that a mechanic’s lien be served on the property owner. However, it is a good idea to send a copy of the lien to the owner so that they have notice of the lien and have an opportunity to resolve the outstanding payment.
Once the lien has been properly filed, then the subcontractor can enforce it if the property owner does not pay for the work performed. New Mexico mechanics liens expire within 2 years, so if you do not file a Notice of Intent to Foreclose within that time period, then you will no longer be able to enforce the lien. If the property owner pays the debt, then you can release the lien claim.
Strict compliance with New Mexico’s lien statutes is required to have a valid, enforceable lien. These laws can be confusing, as different rules apply based on your specific situation. A New Mexico mechanics lien attorney can help ensure that your lien is filed properly so that you can get paid for your work.
I’m Not Licensed. Can I Still File an NM Mechanic’s Lien?
No. If you are required to be licensed under the Construction Industries Licensing Act, then you must have that license in order to file a mechanic’s lien in New Mexico. Otherwise, the only recourse you may have is to file a breach of contract lawsuit against the property owner or general contractor.
The laws surrounding mechanics liens can be complicated. If you have any questions about filing for a lien and the steps required to do so, reach out to an experienced New Mexico mechanic’s lien lawyer. Our law firm can help you with the process and will make sure that your lien is filed in accordance with the law.
Can I Include Collection Costs and Attorney’s Fees in My Mechanic’s Lien?
While you may be able to recover your costs in a foreclosure action, the amount of the mechanic’s lien is what is due under the contract. It is possible to note in the lien that you are claiming attorney’s fees and interest, but you cannot claim a set amount that is added to the lien total. If you move to enforce the lien, then you can seek payment for the costs that you incurred.
Working with a lawyer can help streamline the process of filing for a mechanic’s lien. At Forbes & Forbes, we offer a range of services to subcontractors and others in the construction industry. Give us a call to schedule a consultation about NM mechanic’s liens.
I Got Paid for My Work. How Can I Cancel a Mechanic’s Lien?
Once you receive payment on a lien, then the next step is to release the lien. New Mexico law does not specify who must file the paperwork to cancel a lien. In most cases, the property owner will require the lien claimant to release the lien in exchange for payment.
A mechanic’s lien lawyer in NM can assist you with every aspect of filing for, enforcing, and ultimately releasing a lien. Contact Forbes & Forbes today to schedule a consultation with a member of our construction law team.
Concerned about Getting Paid? Our New Mexico Mechanics Lien Attorneys Can Help.
When you perform work on a construction project, you expect to be paid. If the general contractor or property owner fails to pay you, a mechanic’s lien is a great tool to ensure that you are paid. Our law firm can assist you with the process.
The NM mechanics lien attorneys of Forbes & Forbes have decades of combined experience handling all aspects of construction and business law. We are dedicated to helping our clients achieve the best, most cost-effective, and most efficient solution for their legal matters. To learn more or to schedule a consultation with a mechanics lien lawyer in NM, give our law office a call at (915) 533-5441 or fill out our online contact form.