A mechanics lien is arguably the single most powerful tool any construction professional can wield against delinquent, non-paying clients. Mechanics liens are filed under a property’s public records so potential buyers and financiers are warned about outstanding payment disputes. This, in effect, limits a property’s market value forcing property owners to settle their debts as soon as possible.
Because a mechanics lien can be very powerful against property owners, filing it is a tedious process. Every state has its own rules and regulations on filing a valid mechanics lien. New Mexico, for example, can be strict about certain mechanics lien rules, but there are also steps that other states require but New Mexico does not.
This guide will help you go through these rules and regulations, from the important deadlines that you must meet, all the way to the common mistakes that most construction professionals make when filing a mechanics lien in the state.
New Mexico Mechanics Lien
Just like most states, New Mexico has its own rules and regulations regarding mechanics liens. For example, New Mexico does not have specific statutory rules for serving copies of a mechanics lien on the property owner. New Mexico also requires the submission of a preliminary notice only for certain types of construction participants.
This guide will help you go through these rules and regulations, from the important deadlines that you must meet, all the way to the common mistakes that most construction professionals make when filing a mechanics lien in the state.
Serve a Preliminary Notice, If Required
Sending a preliminary notice is a requirement for some construction parties in New Mexico. According to New Mexico Statutes Section 48-2-2.1(A), the following parties are NOT required to submit a preliminary notice:
- Those who work on residential properties with four or fewer dwelling units
- Those who are in direct contact with the property owner (e.g. general contractor, material suppliers who sell directly to the owner)
So if you’re a contractor, a subcontractor, or a materialman who does not have direct contact with the property owner, chances are you are required to serve a preliminary notice in New Mexico.
When should the preliminary notice be sent in New Mexico? Who should you send it to?
The preliminary notice in New Mexico must be delivered to the property owner within 60 days after the first day of furnishing labor or materials to the project. The preliminary notice must be sent to the property owner and the original contractor, if applicable, by either certified mail, return receipt requested, facsimile with acknowledgement or personal delivery.
You may also serve the preliminary notice in New Mexico electronically via the Handle app. Handle can take care of the correctness of the New Mexico preliminary notice form, and will make sure that you notice is served to the property owner on time.
What information should be in the New Mexico preliminary notice form?
The preliminary notice in New Mexico must contain the following information for it to be considered valid:
- a description of the property that is sufficient for actual identification of the property;
- the name, address and phone number of the claimant; and
- the name and address of the person that the claimant contracted with or furnished labor or materials to, or both.
What if you miss the 60-day window for filing the New Mexico preliminary notice?
Failing to submit the preliminary notice does not necessarily revoke your right to file a mechanics lien. You may still file at a later date, but your mechanics lien can only cover the last 30 days prior to when you serve the preliminary notice.
How to File a Mechanics Lien in New Mexico: 3 Steps
- Prepare the mechanics lien document
- Record the mechanics lien
- Enforce the mechanics lien
1. Prepare the mechanics lien document
The mechanics lien in New Mexico must contain certain information for it to be considered enforceable. According to New Mexico Statues Section 48-2-6, these information must be in the New Mexico mechanics lien form:
- The name of the property owner
- The name of the person by whom the claimant was employed
- The unpaid amount that is being claimed, minus the credits and offsets
- The statement of the terms, time given, and conditions of the contract
- A description of the property that is sufficient for identification
Must a New Mexico mechanics lien be notarized?
Yes, the state rules require the mechanics lien claim to be verified by oath, whether of himself or of another person. Make sure that you sign and acknowledge the accuracy and truthfulness of your claim, otherwise the court may not consider the lien valid.
2. Record the mechanics lien
After serving the preliminary notices and preparing your mechanics lien, you now have to file it.
When must you file a New Mexico mechanics lien?
There are two different recording deadlines for New Mexico mechanics liens:
- For general contractors: you must file within 120 days after completing your contract
- For all other construction participants: you must file within 90 days after the completion of the project
Where must you file a New Mexico mechanics lien?
The New Mexico mechanics lien must be filed in the county clerk’s office of the county in which the project is located.
How must you file a New Mexico mechanics lien?
You may file by paying a visit to the county clerk’s office, or you may also mail your documents together with the necessary fees.
Another option is to file the New Mexico mechanics lien online via the Handle app. Handle can take care of all your lien-related documents, from the preliminary notice to the actual mechanics lien. By choosing Handle, you are guaranteed that your forms are filled out properly and all the documents are filed and tracked accordingly.
Must you serve copies of the New Mexico mechanics lien to the property owners?
The New Mexico state regulations do not have a specific requirement for serving copies of the mechanics lien to the property owner or the general contractor, if applicable.
However, it is highly advisable that you serve a copy to the property owners. By letting the know that you have recorded a mechanics lien against their property, they might take it upon themselves to get you paid.
3. Enforce the mechanics lien
After you have recorded the lien and you still have not gotten paid, it is time to consider filing a foreclosure action against the property.
Important Deadlines to Keep in Mind When Filing a New Mexico Mechanics Lien
4 Common Mistakes When Filing a Mechanics Lien in New Mexico
1. Waiting until the last minute before serving or filing the lien documents
It is considered a good business practice to never delay the things that you can do as early as possible. If you are one of the parties required to file a preliminary notice, make sure that you prepare the notice way before the 60-day deadline elapses.
Similarly, you must not wait until the last minute before getting all the information you need when filing a mechanics lien. You must stay on top of all the timelines and documentation requirements; otherwise, you might end up wasting your lien rights altogether.
2. Overstating the amount being claimed on the mechanics lien
This is another common mistake among construction professionals. You must always remember that the mechanics lien focuses solely on the compensation that you should have gotten for the services that you have rendered to the project. Attorney fees and other lien costs do not count towards the claimable amount.
Note that you might still be able to earn back the attorney fees and other costs if you win a foreclosure action.
3. Failing to include all the required information on the mechanics lien form
New Mexico does not have a required lien form to fill out and there are also no specific formatting guidelines that you have to follow, unlike in other states. However, you must still include the required information if you want your mechanics lien to be enforceable.
Note that the location address you are providing must be sufficient enough for identification, e.g. street address, parcel details, etc. You must also spell the correct names of the owner — these are small things that you must still pay attention to.
4. Failing to enforce the mechanics lien before it expires
As with most states, New Mexico also does not have an infinite validity allowed for mechanics liens. All mechanics liens will expire in 2 years after the recordation date, and it is your duty as the claimant to make sure that you enforce the mechanics lien before this deadline passes.
Note that failing to enforce the lien before it expires means that you lose your chance to secure your payment via the mechanics lien. After going through all the trouble of filing the lien, you do not want to just have all your efforts wasted.
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