Chances are, if you’re curious about something, someone else has had that same question before. At zlien, we see hundreds of questions from contractors everyday, and we can attest that statement is particularly true when it comes to lien law. To answer some of these common questions, we’ve enlisted the help of our friend Neilz, aka ‘Mr. Lien Machine,’ aka ‘Bond, Payment Bond.’
Neilz is a document expert and an international man of mystery. How does he know everything? We don’t know. What does he look like? Who cares, because he’s here with answers for your lien rights troubles.
This week’s question is about whether a MECHANICS LIEN CAN BE FILED ON A PUBLIC CONSTRUCTION PROJECT, and it comes from SMOOTH RHODES, a paving subcontractor in beautiful Southern California.
I’m new to this whole lien rights thing. I’m a paving subcontractor and typically work on public road jobs. I usually get paid on time, but I’ve had a couple payment issues with my GC’s recently, so I decided to look into some potential remedies.
I want to file a mechanics lien, but my business partner ROCKY LANE told me that we can’t file liens on public projects. Is this true? If so, how can I get my money?
~Smooth Rhodes – Southern California
Hey Mr. Rhodes,
You and your partner Mr. Lane definitely have your heads in the right place. I’m glad to hear you guys are trying to protect yourself and secure your payments, because payment issues do exist, even on government-funded jobs.
Your partner Mr. Lane is correct: technically, you cannot file a mechanics lien on a public construction project. Mechanics lien law does not govern public projects, and you cannot force the government to foreclose on its own property. Think of it this way: you can file a lien on grandma’s house, but you can’t file a lien on the White House.
Don’t let this scare you though, because you still have remedies available to help you with your payment issue. Federal construction projects are regulated by the Miller Act, and each state has a “Little Miller Act” that applies to public jobs at the state level and below.
These laws require prime contractors to post payment bonds guaranteeing the performance of their contractual duties and/or the payments to their subcontractors and materials suppliers. If one of these lower-tiered parties (like yourself!) is not paid, they can make a claim against the bond to get their money. These bonds basically act as insurance on public jobs, so instead of getting paid from the sale value of the property as you would with a mechanics lien, you’re getting paid by the bond provider.
The laws and terminology for public jobs are different than the lien laws that regulate payments on private construction projects, but you can (and should) still protect yourself. Be sure to check out zlien‘s free resources for our Bond Claim FAQs to see if you need to send any kind of notice before making a bond claim.
Until next time,