(Published in New Hampshire Business Review’s Legal Expertise Guide, August 2010)
In New Hampshire, contractors and suppliers can obtain security for payment through mechanic’s liens and bond claims. Mechanic’s liens apply only to private construction projects. Bond claims apply to public projects, or sometimes larger private projects where bonds are required. Statutory requirements to “perfect” mechanic’s liens and bond claims must be strictly followed or these rights will be lost.
A mechanic’s lien is a statutory remedy which arises automatically when a contractor, subcontractor, or supplier provides labor, services or materials to a construction project. Before providing work or materials, one should give written notice to the general contractor and owner of the intent to claim a mechanic’s lien. Otherwise, the lien will be limited to the amount, if any, owed to the general contractor at the time notice is given.
To enforce a mechanic’s lien, one must follow the statutory procedure to “perfect” the lien within 120 days after the services are performed or the materials are furnished. To perfect a lien, one must commence suit for the amount owed, obtain an attachment, and record the attachment in the registry of deeds in the County where the property is located. Mechanic’s lien attachments, which can be obtained without notice to the owner, are granted as a matter of right if one establishes the elements of a mechanic’s lien. Be aware that the time limitation for perfecting is strictly enforced.
Contractors and suppliers cannot obtain mechanic’s liens on public projects but can assert bond claims on projects in excess of $25,000. The bond statute likewise contains strict procedural requirements. Within 90 days after completion and acceptance of a project by a contracting party, one must file in Superior Court a statement of bond claim, and, within one year thereafter, file a petition to enforce bond claim. The principal and surety must be copied on those documents when filed.
The construction market has been tough enough these last few years, without contractors and suppliers having to worry about getting paid for the work they have done. Consult with counsel to employ these protections before it is too late.
Mike Kenison is a senior attorney in the Litigation Department at the McLane Law Firm. He can be reached at 603-628-1417 or at mkenison@mclane.com. The McLane Law Firm is New Hampshire’s largest full-service law firm with offices in Manchester, Concord and Portsmouth, New Hampshire, as well as Woburn, Massachusetts