New law grants Massachusetts architects mechanic’s lien rights
On January 5, 2011, Governor Deval Patrick signed into law amendments to Massachusetts’ Mechanic’s Lien Act (M.G.L. c. 254, § 1, et seq.) that provide design professionals and their consultants with lien rights for the professional services they provide on private construction projects. The new law goes into effect on July 1, 2011.
The legislation is the result of successful lobbying efforts by the AIA Massachusetts Government Affairs Committee and AIA members from across the Commonwealth, who supported the bill through advocacy events, including Design Professionals Day, and direct outreach to legislators. The Government Affairs Committee initiated this campaign in 2007 and, since then, worked with allied organizations representing other design professions, contractors and subcontractors to develop consensus and garner support for the bill.
“For years, the mechanic’s lien law has provided an efficient and effective tool for contractors and subcontractors when an owner defaults,” explains John Nunnari Assoc. AIA, executive director of AIA Massachusetts and co-chair of the Government Affairs Committee. “This legislation will help ensure that architects and other design professionals receive full compensation for the value of the work they perform under a contract.”
Who can file a mechanic’s lien?
The law provides lien rights to “design professionals” who are licensed or registered in Massachusetts. The definition of “design professionals” includes architects, professional engineers, licensed site professionals, landscape architects and land surveyors. These design professionals can now place a lien against a property as security for the value of their “professional services” related to that property. The law defines “professional services” as:
“Services that are customarily and legally performed by or under the supervision or responsible control of design professionals in the course of their professional practice, including without limitation, programming, planning, surveying, site investigation, analysis, assessment, design, preparation of drawings and specifications and construction administration services.”
What is the procedure for filing and enforcing a lien?
There are three basic steps for creating, maintaining and enforcing a lien against the delinquent owner or developer’s property:
- File a notice of contract. The design professional must file or record a form with the registry of deeds providing notice of the contract for professional services on the property in question. This notice must be filed within 60 days of the Notice of Substantial Completion (this refers to the Notice of Substantial Completion filed or recorded by the owner and contractor as provided in M.G.L. 254 § 2A and not a Certificate of Substantial Completion like AIA Form G 704) or 90 days of the last professional service performed, whichever is earlier. This notice creates a lien on that property. Click here for samples of the statutorily prescribed notice of contract forms.
- File a statement of account. The lienholder must file a statement that includes the total amount due or to become due under the contract within 30 days of the deadline for recording the Notice of Contract. There is not a statutorily prescribed format for this statement, but it must include the owner’s name and a description of the property.
- Take civil action to enforce the lien. The design professional must file a complaint in the District or Superior Court in the county in which the project is located to “perfect” its lien within 90 days after the filing of the statement of account. Thereafter he or she must record an attested copy of the complaint within 30 days of commencing the lawsuit in the same manner and registry where he or she recorded the other lien documents.
Both the notice of contract and the statement of account must be recorded in the registry of deeds or in the registry district of the land court in the county in which the construction project is located.
What is the effect of a successful lien?
The lien creates an encumbrance on the property, which provides the lienholder with the right to proceeds from the sale of the property and, ultimately, the ability to foreclose on the property and force a sale to collect the professional service fees due under the contract. The lien can secure payment for services that relate to the proposed or actual erection, alteration, repair or removal of a building or improvement to real property only under a written contract. Architects are entitled to a lien for fees related to preparing and furnishing plans, even if the project is abandoned and the plans are never used.
The proceeds from the sale of the property will be used to pay off the owner’s contractual debts that are secured by liens or mortgages, including those owed to the design professional with the lien. Design professional liens have a lower priority than the liens of contractors, subcontractors, suppliers and laborers, and certain types of mortgagees, and will be paid only if money remains after satisfying those liens.
Design professionals must be careful to comply strictly with the statute’s procedural requirements. Failure to adhere to the timing or notice requirements may dissolve the lien and prevent the lienholder from enforcing its rights.
Thanks to Chris Noble, Esq., of Noble & Wickersham LLP for reviewing this article.
Andrew Baldwin is an attorney at the Law Offices of Richard A. Glaser, P.C. and former public policy manager for the Boston Society of Architects.
Massachusetts State House photo by RightIndex. Used under the Creative Commons Attribution license.
