This is a pretty fundamental question when it comes to mechanics lien rights: can a lien be filed by a party on a project before that party actually finished all of the work they were contracted to perform?
Often, the person asking this question is either a top-tier project participant (typically the project owner or the general contractor) or a lower-tier participant (usually the subcontractor).
If a top-tier player is asking, it’s usually because they’re hoping that a subcontractor won’t have any lien rights on a project, unless and until they finish all of their work. (This means that, no liens could be filed by the subcontractor until they finished all of the work as spelled out in their contract.)
And if a lower-tier player is asking, they’re hoping that the opposite is true. That is, if they’re experiencing a payment issue on a project, they don’t have to finish all of their work before being able to file a lien. Please read on for a brief discussion of this issue.
Can You File a Mechanics Lien Before You Complete Your Work?
The rule is usually as simple as this: If the property is improved and the contractor isn’t paid for that improvement, there is a mechanics lien right.
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In other words, it is highly likely that the contractor can file a mechanics lien even if they didn’t finish their work — or before they finish their work, as the case may be. Most states allow contractors to file a mechanics lien for the value of their improvements to the property.
This rule is especially pertinent on projects with extended timelines of a few months or more. For example, if a contractor is on a 10-month long project but has a payment issue in month 5, they won’t have to wait until the full 10 months is up to deal with their issue.
Video Summary of Filing a Mechanics Lien on an Unfinished Project
Further Reading: Frivolous Mechanics Liens: Intentionally Fraudulent vs. Honest Mistakes
Bonus Question: What If the Contractor Is Unlicensed?
This question is sort of similar in that it’s a ‘What If’ type of question. Nevertheless, this is something that we get asked quite a bit here at Levelset — whether a contractor’s license is required to file a lien. The answer is that it depends on the state. But we’ve got the perfect download that answers this question on a state-by-state basis. Download a copy for yourself today.