In New Mexico, if contractors and suppliers are not paid for their work on a construction project, they have the right to file a mechanics lien to ensure they receive compensation. A mechanics lien is a legal claim that grants the unpaid party a security interest in the property.
At CRM Lien Services, we specialize in ensuring you get paid quickly and reliably. We can prepare and file mechanics liens for you, considering Mechanics Lien New Mexico and state-specific rules and regulations.
This guide outlines the essential rules, requirements, and deadlines necessary for filing a mechanics lien in New Mexico.
Key Takeaways
- Broad Eligibility and Deadlines: A wide range of construction participants are eligible to file mechanics liens and specific deadlines—120 days for direct contractors and 90 days for others—are critical for securing lien rights.
- Licensing and Notice Requirements: Compliance with licensing laws and the need for preliminary notices are essential for the validity and enforceability of liens.
- Strategic Lien Management: The guide outlines the strategic management of liens, including the inclusion of attorney’s fees and the nuances of lien priority and foreclosure, helping stakeholders effectively secure payments.
Who Can File a New Mexico Mechanics Lien?
New Mexico offers broad mechanics lien protection to anyone who performs labor, provides or transports equipment, tools, or machinery, or supplies materials for construction, alteration, or repair of a project. Every person performing labor, including contractors, subcontractors, architects, surveyors, and builders, can file a mechanics lien. This protection also extends to architects and engineers whose plans are utilized, as well as to design professionals and surveyors.
When Is the Deadline to File a New Mexico Mechanics Lien?
In New Mexico, the deadline for filing New Mexico mechanics lien varies based on the claimant’s role in the project:
- Direct contractors, meaning those contracted directly by the property owner, must file their mechanics lien within 120 days following the project’s completion.
- All other claimants who do not have a direct contract with the property owner must file their mechanics lien within 90 days of the project’s completion. This timeframe is measured in consecutive calendar days.
Are Attorney Fees, Collection Costs, or Other Charges Included in the Lien Amount?
In New Mexico, the appropriate amount to claim in a mechanics lien is the sum specified or agreed upon in the contract, accounting for any just offsets and credits. While the lien may indicate that attorney’s fees and interest are being claimed, these should not be included as part of the total lien amount upfront. Attorney’s fees can be awarded to the lien claimant who prevails in a foreclosure action.
Notably, this provision does not apply reciprocally to the property owner; if the property owner successfully defeats the lien in a foreclosure action, they cannot automatically recover their attorney’s fees from the lien claimant.
Where Do I File and Record a New Mexico Mechanics Lien?
In New Mexico, mechanic lien claims must be filed with the county recorder’s office. The New Mexico lien law outlines the legal requirements for filing a lien, including filing deadlines, notice requirements, and priority of liens. To ensure the validity of your mechanic’s lien, it is essential to record it in the county where the construction project is physically situated. New Mexico is home to numerous counties, each with its specific set of rules and requirements for lien filing.
Do I Need to Send Notice That the Mechanics Lien Was Recorded in New Mexico?
In New Mexico, it is required that a copy of the filed claim of lien be served on the property owner or reputed owner within 15 days of its filing. While neglecting to serve the copy does not invalidate the claim, it does prevent the claimant from recovering interest, attorney’s fees, or costs.
Can I File a New Mexico Lien on a Condominium Project?
Yes, a mechanics lien can be filed against a condominium project if the lien claimant has valid mechanics lien rights.
If the labor and/or materials were provided before the condominium declaration, regardless of when the lien was perfected, the claim will apply to the units proportionally based on the amount attributable to each unit.
If the labor and/or materials were supplied after the condominium declaration, and the work was requested by an individual unit owner, then the lien will attach to that specific unit and its share of undivided common elements. If the work was performed under an agreement with the condo association or board, it is considered to have been provided with the explicit consent of each unit owner. It can be the basis for filing a lien against each improved unit.
Can I Collect the Entire Unpaid Amount From the Property Owner If They Already Paid the General Contractor in Full in New Mexico?
No, New Mexico is categorized as an “unpaid balance lien state.” This means that the amount a subcontractor can claim through a mechanics lien is limited to the remaining funds the contractor is owed at the time the lien is filed. Unlicensed contractors may face additional challenges in recovering any money owed, as they might be unable to file suit to collect unpaid amounts. Therefore, timing is crucial for subcontractors in New Mexico to secure their mechanics lien rights effectively.
Does a New Mexico Lien Have Priority Over Pre-existing Mortgages or Other Construction Loans?
No. In New Mexico, the “first-in-time” rule applies when determining the priority of mechanics liens compared to other property encumbrances. For priority purposes, all mechanics liens, regardless of their recording date, are considered to have commenced with the start of the project.
However, in the case of surveyors, the lien may be deemed to start with the project’s commencement, even though the survey work typically occurs before physical construction begins. Therefore, a mechanics lien filed by a surveyor is given the same priority date as other mechanics liens, even though the survey work was done earlier.
Any other encumbrance on the property takes precedence over mechanics liens if it was recorded before the project began. If recorded after the project’s commencement, it ranks after the mechanics liens.
Among competing mechanics liens, priorities are assigned in tiers:
1) parties other than the original contractor or subcontractor,
2) subcontractors
3) the original contractor
Each tier must be fully satisfied before payments proceed to the next tier. If funds are insufficient to satisfy a tier, payments within that tier are made pro-rata, and the subsequent tier receives no payment.
Top 5 Essential Facts About Filing Mechanics Liens in New Mexico
Contractors and suppliers in New Mexico enjoy robust lien rights. If they aren’t paid for their work on a New Mexico project, they can file a mechanics lien to expedite payment and secure their rights. However, compliance with specific rules and requirements is crucial.
Here are five key aspects of New Mexico’s mechanics lien law you should know:
1. Licensing is Required for Filing a Lien: In New Mexico, only licensed contractors, subcontractors, and material and equipment suppliers can file a valid mechanics lien. This includes design professionals like surveyors, architects, and engineers, provided their designs are utilized in the project. The Construction Industries Licensing Act mandates that claimants must be licensed to file a lien. Moreover, an unlicensed contractor may not only be unable to file a lien but may be precluded from suing to recover any unpaid amounts. In some cases, unlicensed contractors might have to refund payments received if requested by the property owner.
2. Different Deadlines Based on Your Role in the Project: For general contractors, the deadline to file a mechanics lien is 120 days after project completion. Subcontractors and other parties without a direct contract with the property owner have 90 calendar days from project completion to file. Although not mandatory, parties without a direct contract can notify the property owner of the lien, potentially preempting claims that the owner has already paid the full contract amount.
3. Specific Preliminary Notice Requirements: Preliminary notices are required in New Mexico under certain conditions: if the claimant has no direct contract with the property owner or general contractor, the claim exceeds $5,000, and the project does not involve residential property with fewer than four dwellings. While not mandatory for all, a notice of intent to lien can be sent by other parties to encourage payment.
4. Attorney’s Fees May Be Awarded in Lien Foreclosure Actions: Attorney’s fees can be awarded to the claimant in successful lien foreclosure actions. Interestingly, this does not work reciprocally; if a property owner successfully defends against a lien in court, the unsuccessful claimant is not liable for the owner’s legal costs.
5. Legal Property Description is Not Necessary When filing a mechanics lien in New Mexico, a legal property description is not obligatory. The lien needs only a description sufficient to identify the property. Although a full legal description is adequate, other sufficient details might include a municipal street address, especially for residential properties, to uniquely identify the property for lien purposes.
Understanding these aspects helps ensure compliance with New Mexico’s mechanics lien law, protect your rights, and facilitate timely payment.
How to File a Mechanics Lien in New Mexico?
If you plan to file a mechanics lien to secure payment for your work on a New Mexico project, the following detailed guide will walk you through each step to ensure you do it correctly.
Step 1: Preparing Your New Mexico Mechanics Lien Form: Mechanics liens are governed by strict laws that dictate specific formatting and content requirements:
A. Obtaining the Correct Form: Mechanics lien forms must comply with statutory requirements to be accepted. Many resources offer mechanics lien forms, but it’s crucial to use one that is legally valid.
B. Completing the Form Accurately: Omitting information or errors can invalidate your lien.
Essential details include:
- Claimant’s Information: Provide your full name and address. If filing for a company, include the legal, registered company name and business designation (LLC, Inc., etc.).
- Hiring Party: Include the name and address of the party who hired you, as per your contract.
- Property Owner: If different from the hiring party, this may require some research to ensure accuracy.
- Property Description: While a full legal description isn’t mandatory, detailed enough information to identify the property is necessary.
- Description of Labor or Materials: Provide a general description of the services or materials provided.
- Contract Terms: Reference the written contract or provide a summary of the terms and conditions.
- Lien Amount: State the contract amount minus any credits or offsets. Mention that attorney’s fees and interest are claimed, though not included in the lien total.
- Signature & Notarization: The form must be signed and notarized, verifying the authenticity of the information.
Step 2: Filing Your New Mexico Mechanics Lien: File your lien claim with the county recorder where the property is located.
A. Timing Your Filing The filing deadline varies from 120 days post-completion for direct contractors and 90 days for others.
B. Choosing the Filing Location File at the county clerk’s office relevant to the property’s location. Contact the clerk’s office for specific requirements and fees. This information is available on each county’s website.
Practical Filing Tips
- Choose between walk-in, mail, or e-recording based on availability.
- Include appropriate fees and ensure compliance with country-specific requirements.
Step 3: Serving Your Mechanics Lien: While not mandatory, serving the lien on interested parties can preclude certain defenses. As of June 16, 2023, a copy must be served within 15 days of filing to recover costs, fees, or interest.
What’s Next? Your mechanic’s lien once filed and served, positions you to recover the owed amount. However, if unpaid, enforcing the lien through legal means or arbitration may be necessary.
Enforcement and Release: Consider the potential for foreclosure or the strategic use of a Notice of Intent to Foreclose to prompt payment. Once paid, it is prudent to release the lien.
By carefully following these steps, you can effectively use a mechanics lien to secure payment for your work in New Mexico.
Get in Touch
This Mechanics Lien New Mexico Guide provides an essential toolkit for contractors, suppliers, and other construction professionals seeking to secure their payments through mechanics liens in New Mexico. By clearly outlining the eligibility criteria, necessary deadlines, and specific procedural requirements, this guide equips industry participants with the knowledge needed to utilize lien rights effectively.
Understanding and following these guidelines ensures that one can navigate through the complexities of lien laws, thereby safeguarding financial interests and enhancing the likelihood of receiving timely compensation for services rendered on construction projects.
At CRM Lien Services, we have been serving customers nationwide with required reference documentation for lien claims since 1986. We assist property owners in navigating the mechanics lien process, informing them about their rights and responsibilities, including providing notices, securing payment, and releasing mechanic’s liens.
We have a wealth of expertise, are licensed and insured, and have a team of highly knowledgeable document processors. If you’re looking for a straightforward process for filing a mechanics lien, give us a call or shoot us an email.
We would love to work with you and help you lower your risk and get paid fast!
