How Much Does It Cost to File a Lien
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If you're worried about the cost to file a mechanics lien, that's completely understandable. The process — including the cost to file a lien —might seem complicated. The bottom line is, if a customer owes you money for your work on their property, mechanics lien laws exist to help you get paid.
There are a few different ways to file a mechanics lien, and the costs are rarely consistent. We'll go over the different routes you can take when filing a lien and provide a rough idea of how much each can cost. You'll have a better idea of what to expect price-wise from each option and what your level of involvement needs to be.
The cost to file a mechanics lien
A mechanics lien is probably the most powerful payment tool in a contractor's belt. If you're trying to collect on a late payment, filing a lien will almost always be the easiest, most cost-effective method available.
Before you get started, make sure you understand how to file a mechanics lien in your state. Each state has its own set of required notices and deadlines. The cost to file a lien on your own can vary widely, from just $5 in Montana to $345 in Hawaii. If you employ a construction attorney to file a lien on your behalf, the cost may stretch into the thousands of dollars.
There are a few different methods you can use to file your lien. They're each quite different, requiring varying levels of input and preparation. Additionally, prices do fluctuate quite a bit. Here's a quick rundown.
Filing on your own
If you're interested in filing your own mechanics lien, you can almost certainly do so. If done correctly, it can be the most cost-effective way to get the job done. You'll need to pay the recording fees depending on where your project is located.
First, if you decide to file a lien on your own, make sure you use a mechanics lien form that meets the requirements in your state.
Across the country, the cost to file a lien varies wildly. Here are a few detailed examples:
Lien claims filed in New York must go through the clerk's office of the county where the project took place. The prices can vary by county. For example, it will cost you $30 to file your own mechanics lien in Queens County. Nassau and Suffolk County cost $315 and $215, respectively. Most other counties' clerks charge $15.
Filing your own lien in California also goes through county offices. Filing your mechanics lien with the project's county recorders' office can cost between $95 and $125, depending on the project's location.
You'll have to visit the project's county clerk's office in Florida as well. Filing your own lien in Florida has varying costs. Depending on the supporting documentation and length of your lien paperwork, it can cost as little as $10 for the first page and an additional $8.50 for each additional page.
Find your local county recorder to view specific filing fees in each location.
When you file your own lien, you're entirely responsible for ensuring that your form meets the legal requirements. This is true no matter what state you're in. You must also include all of the proper documentation, get the details right, and meet all of the appropriate timelines. You're also responsible for ensuring that your lien amount is correct.
Filing a lien on your own can save some money, but it can also be risky. Missing any of these important steps can result in an invalid lien. Even simple mistakes can get your lien thrown out, losing your right to the claim.
Using a lien filing service
There are a number of lien filing services available that will file your lien for you. They vary in their capability and competence, and their prices fluctuate even more.
You can file a mechanics lien with Levelset for $349. That price includes the cost of researching the project details, confirming the appropriate parties, and verifying all of the document information.
Levelset also ensures your lien adheres to all critical timelines and that all of the required documentation is taken care of. It's a turn-key, worry-free approach to lien filing.
Learn more about the Scout Research team, and why they're such a valuable asset to Levelset customers.
File a lien now!
Levelset takes all of the guesswork out of the filing process. We'll research the project information and ensure your claim is done right.
Hiring an attorney
Another option for help filing a lien is hiring an attorney. If you hire a construction attorney familiar with mechanics lien laws, they'll know all of the deadlines and appropriate paperwork that you need to have sorted out.
In Delaware, Hawaii, Maryland, and New Hampshire, liens are filed through the court (rather than the clerk or recorder's office). The help of a construction attorney may be necessary. While individuals can generally represent themselves in a court action, LLCs typically need a lawyer to file on their behalf.
The issue with using an attorney is that they're likely to charge hourly for their services. While their time, education, and experience do deserve reimbursement, the costs of all those hours can add up in a hurry.
The cost of not filing a lien
When you're deciding whether to file a lien, sometimes the appropriate question is not how much it costs to file a lien, but how much not filing a lien can cost.
Construction can be unpredictable, and slow payments are a common occurrence. Waiting indefinitely for a check could be an expensive decision.
How much will it cost you to not file a lien when you're due payment? It really depends on the project and how much your customer owes you. You can probably shoulder or even eat the bad debt on a small project, learn from your mistake, and move on.
Larger debts are a different story. Truthfully, a few months' worth of interest on materials you fronted could whittle your profit margin down to nothing. You could end up upside down on the job pretty quickly. Can you afford to write off that bad debt?
What about the next project? Are you able to take on the next great project with your cash flow stifled by a non-paying customer? Can you cover mobilization costs? Do you have the credit to carry another project while waiting for your payday? If you have employees, can you make payroll? There might be people depending on you.
When you're considering the cost of filing a mechanics lien, be sure to consider the cost of not filing. The toll that bad debt and losing future projects can take on your company can far outweigh the cost of even the most expensive filing avenue.
How Much Does It Cost to File a Lien
Source: https://www.levelset.com/blog/cost-to-file-mechanics-lien/
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