Mechanics liens have a long, storied history in America that goes back over 200 years to founding father Thomas Jefferson. Unfortunately, for US-based construction firms that work on international projects, the protections and rights afforded by mechanics liens stop at the US border. While there may be some protections available for contractors working on overseas projects on a country-by-country basis, those protections are not going to include mechanics liens, since those are available on domestic soil only.
However, these protections do extend beyond the 50 states to include all US Territories as well, including our Caribbean cousins, Puerto Rico and the US Virgin Islands
Getting Paid in Puerto Rico
There are 3 potential remedies available to help with payment issues in Puerto Rico:
1) Bond Claim
2) Claim Against Funds
Just like on the mainland, the remedy available to a project participant depends on a number of factors. Also, there are a few differences between how these tools work in Puerto Rico compared with the mainland US. We’ll provide a brief overview of some of these differences below.
Puerto Rico Differences
Bonds – generally the same except for a couple of key differences:
- Protection is statutorily limited to laborers and employees of the contractor or subcontractor that’s providing the bond
- Bond requirements are set forth by the text of the specific bond itself – NOT by law
Claim Against Funds – the most universal protection available in Puerto Rico:
- Available to any party who has furnished labor and/or materials on a project for which they are unpaid
- Limited to the amount still unpaid to the general contractor at the time the claim is made
- No preliminary notice required, but the claim itself must be in writing
Mechanics Lien – works very differently in PR compared to the US mainland:
- In Puerto Rico, mechanics liens are the most restrictively available remedy – pretty much the opposite of how liens work on the mainland
- Only available to laborers, and only then if no bond was provided on the project
Getting Paid in the US Virgin Islands
Unlike Puerto Rico, the remedies available in the US Virgin Islands are much aligned with the traditional remedies, procedures, rules, and requirements available to claimants on the US mainland. Thus, the main protection available for private construction projects is the mechanics lien, and for public projects, it’s a bond claim. The notice requirements in the US Virgin Islands are similar to California and Arizona – see more detail on the US Virgin Islands Lien, Notice, Waiver Forms and Construction Payment Resources page.
More Resources Available
If you’re stuck with a tough construction issue, ask an expert! Visit our Expert Center to post your question to legal, financial, and other construction payment experts across the country.
