A construction lien is not intended to last forever. A construction lien must be foreclosed within one year from its recording date because a construction lien only lasts for one year by operation of law. You will not be able to foreclose a construction lien after this one-year period expires. This is why it is always good practice to calendar the expiration of this one-year period when a construction lien is recorded. There is never a good reason to engage in a last minute scramble to file a foreclosure lawsuit on the expiration date (or shortly before). While I always believe a lienor should work with counsel to record a construction lien, regardless, I would certainly recommend a lienor to work with counsel to ensure lien rights are properly perfected so that when it becomes necessary to foreclose the lien, the strategy is in place to file the foreclosure lawsuit.
Importantly, an owner can shorten the one-year period for a lienor to foreclose its construction lien by properly recording a Notice of Contest of Lien. A Notice of Contest of Lien will shorten the period for a lienor to foreclose its construction lien to sixty days. It is always beneficial to record the Notice of Contest of Lien sooner than later because it puts the onus on the lienor to either foreclose the construction lien or lose its lien and ability to foreclose its lien by operation of law. That’s right – if the lienor does not foreclose its lien within the sixty-day window, it will have lost its lien rights. There are times where an owner of real property records a Notice of Contest of Lien without the use of counsel. I do not suggest this for a couple of reasons. First, you want to ensure this is done right and, second, there may be other strategic decisions that may be better implemented based on the circumstances of the dispute.
Please contact David Adelstein at firstname.lastname@example.org or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.