Caution: That Lien Can Be Wiped Out!
Owners are always eager to cancel any recorded liens. What a lot of contractors don’t know is that there are actually legal ways in which a lien can be extinguished.
Notice of Contest of Lien
One way to accomplish this is to serve a Notice of Contest of Lien. Specifically, the lien upon whom such notice is served shall be extinguished automatically unless the lienor institutes a suit to enforce his or her lien within 60 days. The clerk shall mail a copy of the Notice of Contest to the lien claimant at the address shown in the Claim of Lien. Service shall be deemed complete upon mailing. The Notice of Contest acts by operation of law to automatically discharge a lien on 60th day without any intervention of the court.
Filing Suit to Show Cause
A more drastic method for shortening the limitation period associated with a Claim of Lien is to file a complaint against the lienor demanding that the lienor show cause why the lien in question should not be vacated. Upon the failure of the lienor to show cause why the lien should be enforced or the lienor’s failure to commence such action before the return date of the summons, the court shall immediately order cancellation of the lien. A lienor’s motion for extension of time to respond to the property owner’s motion for discharge of lien does not constitute “good cause” as required by the mechanic’s lien statute for tolling of the statutory 20-day period. Strict compliance with statutory provisions is required in order to protect a lien. The court has no discretion to extend the 20-day period, even if the lienor requests additional time to obtain counsel.
All pretty harsh results – lienors should not assume that their liens will remain in place for a year when confronted by either a Notice of Contest of Lien or a suit to show cause why a lien should be enforced. Ignoring these filings would be a big mistake.