Louisville Law Clinic Uncategorized Alternatives to a Mechanics Lien?

Alternatives to a Mechanics Lien?


In another post, we discussed the requirements for protecting your work with a mechanic’s lien. There are strict deadlines and often contractors don’t realize that they are being cheated until the deadlines have passed. There is no substitute for knowing what you are doing but if you miss the deadlines because of something the property owner said or did to mislead you, there may be alternatives.

Under certain circumstances, a contractor may have a right to impose an equitable claim of lien or even a judgment lien on real property. A common scenario where an equitable lien may apply is where a customer continually promises the contractor that he will pay the contractor for construction work performed but then fails or refuses to pay the balance after the lien window has expired. Some customers may even make partial payments in order to lull a contractor into believing he will pay the final balance. In that scenario, the contractor may be entitled an equitable claim of lien.

Equitable liens arise when (a) a written contract provides for charging some particular property with the debt or obligation, and (b) when declared by a court of equity out of general considerations of fairness as applied to the parties and the circumstances in the particular case. Further, there is the obvious possibility of suing either the person who signed the contract (contract claim) or the property owner who was benefits by your work (unjust enrichment) and obtaining a simple judgment lien, which would apply to all real estate owned by one of more of those persons.

Where a contractor supplies labor, materials, or equipment in the improvement of real estate, filing an equitable claim of lien upon the improved property as security for payment may be appropriate. The fact that a contractor may have a legal claim through construction or mechanic’s lien law does not preclude that contractor from seeking equitable relief by using the improved property as security for payment of the amount owed him. The Court will examine the facts of each case and determine whether it would be equitable (or “fair”) to impose a lien for the unpaid balance.

An equitable claim of lien may be an option for a contractor who has missed the filing deadline for a construction lien.

Our thanks to Attorney Vince Heuser, Louisville, KY, (502) 458-5879, for the suggestion of the idea in this post.

Vincent F. Heuser, Jr.
3600 Goldsmith Lane
Louisville KY 40220
(502) 458-5879

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