At zlien, we file hundreds of mechanics lien documents a month, all across the United States. The documents are sent to the county (or town) recorder offices, where they are to be filed and indexed on public record.

Documents have certain requirements that are necessary for recording, such as margin requirements and the fees to record said document. Outside of that, the county recorder generally should NOT reject a document for recording based on their interpretation of the information on the document. The reality though is that it happens all the time.

Common Rejection Culprit #1 – Insufficient Description of Labor

One common reason we have seen recorders make when rejecting a document is that the claimant’s description of labor is insufficient. We find this rejection reason to be especially challenging since a description of labor that is deemed to be sufficient by one county recorder may be considered insufficient by another county recorder, even when the exact same wording is used. Like a lot of interactions with state bureaucracy, it can seem like the outcome you’re going to get largely depends on whether the clerk you ended up with was having a good day or not!

Here are some descriptions of labor that have resulted in the document being rejected for recording:

  • “Labor and materials for refrigeration remodel and produce case”
    rejected in Ventura County, California
  • “Service Work”
    rejected in New York County, New York
  • “Project Manager – Hiring, ordering, designing, liaison with client, estimates, approvals, records”
    rejected in New York County, New York
  • “Construction Monitoring during construction”
    rejected in New York County, New York
  • “Labor”
    rejected in Los Angeles County, California

We recently wrote an article about a very closely related issue – namely, our overall frustration with some of the county recorders’ bad habits that we regularly deal with on a nationwide basis.

On the whole, they’re a tough bunch to please! Click on the link below to read it for yourself…

Read More: County Recorders – Their 5 Worst Habits

Best Practices

It is generally a good rule of thumb to give a broad enough description of what was provided so that it covers all labor and materials provided on the project, but specific enough to give some detail on how the claimant helped improved the property.

For instance, if a claimant provided electrical materials on the project; the description of “provided electrical materials, including but not limited to light fixtures, conduits, and cables” should be general enough to cover all materials provided, and specific enough to provide evidence of what exactly was contributed to the project and property.

While there are statutes in every state to determine who has a lien right, it is not the recorder’s position to reject the recording of a mechanics lien because it does not fit their description of work justifiable to validate a mechanics lien claim.

Common Rejection Culprit #2 – Filing a Lien Without Lien Rights

Another common reason for a mechanics lien rejection is that the lien claimant is attempting to file a lien for labor that they don’t actually have lien rights for. This might sound silly, but determining whether or not a company actually has lien rights on a project is not as straightforward as it may sound, and we’ve seen too many instances to count where a construction company thought they had lien rights on a project only to find out later that they did not. Sometimes, these parties never had lien rights to begin with – an example of this is that in many states, suppliers to suppliers do not have lien rights. Other times, a party may have had lien rights on a project to start with, but lost those rights due to an unmet requirement (such as failing to send a preliminary notice) or a missed deadline.

The lien claimant’s role on the project and the labor / materials provided will affect the ability to file a valid mechanics lien depending on the state the project is located. For instance, in New York, mechanics lien protection is fairly broad and extends to every:

“contractor, subcontractor, laborer, materialman, landscape gardener, nurseryman or person or corporation selling fruit or ornamental trees, roses, shrubbery, vines and small fruits, who performs labor or furnishes materials for the improvement of real property.”

Except for suppliers, a lien claimant’s tier on a project is inconsequential. There are some exceptions, however. A lien claimant must be licensed to do the work (if a license is required), and must be authorized to do business in New York. The lack of a license or authorization to do business when required is fatal to the lien claim. A supplier to a supplier is not allowed to file a mechanics lien in New York.

Contrast the practice in New York to the way it’s done in Utah, where these parties are explicitly covered

“In Utah, contractors, subcontractors, and other furnishers of labor and/or materials to the project (including equipment lessors) have mechanics lien rights. Lien rights also extend to some pre-construction services, such as planning, designing, and surveying. Unlike some states, suppliers to suppliers are entitled to mechanics lien protection in Utah as long as the materials supplied can be traced to the actual project – and the party complies with the notice requirements.”

Best Practices

For starters, there is a wealth of extremely useful information and resources available for anyone in the construction industry to use, available for free on the zlien website. If you’re confused about whether your company has lien rights on a particular project, it’s a good idea to start there.

Rejected Mechanics Liens: 2 Common Culprits
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Rejected Mechanics Liens: 2 Common Culprits
Mechanics liens can be rejected by county recorders based on their interpretation of the information in the lien claim | 2 common rejection reasons
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