Read the 1st article in the “Rejected Mechanics Lien” series: Rejected Mechanics Liens – 2 Common Culprits
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.
A Common Rejection Reason
One common reason that mechanics liens are rejected by county recorders is that the required attachments are not included with the lien when submitted for filing, or are not presented in a format that the recorder deems acceptable.
The types of required attachments can be grouped in three broad categories:
1) proof that required notices were sent on time and to the correct recipients
2) documentation that proves labor or materials were provided and that money is still owed
3) attachments that prove the lien claimant meets all licensing requirements.
Documentation Showing Proof That Notices Were Sent
Mechanics lien requirements, including notice requirements, vary greatly based on a number of factors. Depending on the circumstances of the project, preliminary notice and/or notice of intent to lien may have been required to be sent in order for the claimant to preserve their lien rights.
Depending on the state where the project is located, a copy of the notice itself, the proof of its mailing, and sometimes both need to be included with the mechanics lien filing as an attachment in order for the lien to be valid.
For instance, in Arizona the proof that the preliminary notice was sent is required as an attachment on all mechanics lien filings. This is generally a signed acknowledgment from the recipient that they received the notice, or if this is unavailable, an affidavit showing the time, place and manner of mailing and facts showing that such service was made in accordance with the Arizona Lien Statute (33-992.01).
On commercial projects in Arkansas, the lien claimant is required to include a copy of the notice of intent to lien that was sent on the project, as well as a copy of the 75-day Notice to owner.
Colorado, Oklahoma, and Wisconsin are just a few of the other states that require proof of notice. Make sure you check the requirements for your state before submitting your lien to the county.
Documentation to Prove Labor or Materials Delivered
Certain states require that the lien claimant provide evidence that there was work commissioned and completed, and that there is still a balance owed on the project. The two most common documents to prove this are invoices showing outstanding amounts and a copy of the written contract, but you may also include documents such as receipts and email communications regarding the project.
New Mexico, for instance, requires that you include a copy of the written contract, or a description of the agreed upon term if the agreement was verbal. Arkansas requires that invoices, an itemized statement, or other documentation showing the amount due and work done be included.
Licensing and Authority Requirements
Depending on the work performed and the state in which it was performed in, a lien claimant may need to provide proof that they were licensed to perform such work in order to have a valid lien claim.
In South Carolina, for example, the lien claimant must:
“provide the county clerk of court or register of deeds proof that he is licensed or registered if he is required by law to be licensed or registered. As proof of licensure or registration, the contractor must record his contractor license number or registration number on the lien document when the lien document is filed.”
In Washington D.C., not only is the lien claimant’s business license required, but also their Certificate of Good Standing issued by the Department of Consumer and Regulatory Affairs.
If you seek help from an external party such as a lawyer or service like zlien, you may need to include a document granting them authority to act as your agent. While most states allow for outside parties to act as agents and file documents on their behalf, some states require explicit consent in order to file the lien. New York and Washington DC, for example, require an “Authority to Sign” document to be included with the mechanics lien.
What If I Don’t Have the Required Documents?
If the documents are required and not provided, the lien will likely be rejected. Washington DC and New York are notoriously strict on rejecting documents that do not have attachments included.
If the lien is submitted without required documents but still gets recorded, it may be deemed invalid during the legislation proceedings if the claimant is forced to file a lawsuit in order to enforce the lien claim.
So If I Include the Required Documents, the Lien Should Be Filed?
In theory, yes. In actuality, this is not always the case. At zlien, we have filed thousands of liens, and have encountered some strange rejections along the way. Some of these rejections involve the recorder determining that the attachments are incorrect, insufficient, or incorrectly formatted.
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
Arizona requires a number of attachments, including a copy of the written contract. Arizona’s Maricopa county has rejected lien filings in the past because the contract was drawn up on a gray-colored piece of paper instead of the specified white. This county has also rejected a lien filing because an invoice was printed in landscape format rather than portrait format.
If Attachments Aren’t Required, Can They Still Be Included?
Generally, yes, attachments may be included.
The most common documentation that is included with lien filings are contracts and invoices. In some states including Kansas, Texas, and Louisiana, it is both encouraged and best practice to include extra documentation proving the work was performed.
Even though this extra documentation is not statutorily required, we have seen instances where recorders in these states rejected a lien filing because attachments that weren’t even required in the first place were not included! So, if you’re in one of these three states, the best practice is to include any supporting documentation you have, even if it’s not required!
It can be confusing to know when to include attachments with your lien filing. At zlien, we have mapped out the instances where they are required. When you request a lien to be filed, our system will prompt you for the documentation at the time of the order.
Our JobSight Team will reach out for required documentation that is not provided and will work with county and town recorders to ensure your attached documents satisfy all their requirements.