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Massachusetts General Contractor Statement of Account: Requirements and Best Practices

Massachusetts General Contractor Statement of Account: Requirements and Best Practices

May 6, 2020

Dealing with a payment dispute in the construction sector can be a huge headache. Thankfully, most construction participants are allowed to file a mechanics lien and improve their leverage during payment negotiations.

Filing a mechanics lien is arguably the best way to recover payment when your client just won’t settle an outstanding debt. In Massachusetts, there are important documents that must be filed for your mechanics lien to be enforceable. One such document is the Massachusetts Statement of Account.

This guide will explain everything a general contractor needs to know about filing a Massachusetts Statement of Account, including the practical steps as well the best practices that they must be aware of.

Need to file a Massachusetts Statement of Account?

Need to file a Massachusetts Statement of Account?

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What is a Massachusetts Statement of Account?

A Massachusetts Statement of Account is a document containing the “just and true account” of the services that you provided to a project. This account includes the breakdown of the amount that corresponds to the labor or materials that you furnished, and it clearly specifies the remaining amount that you are yet to receive from the property owner.

When must a general contractor file a Massachusetts Statement of Account?

You must file a Massachusetts Statement of Account when a payment dispute has already arisen. It is one of the important documents filed to ensure that a mechanics lien in Massachusetts is enforceable.

In terms of deadlines, a general contractor must file a Massachusetts Statement of Account by the earliest among the following dates:

When to file a Massachusetts Statement of Account for general contractors

Consequences of not filing a Statement of Account

If a general contractor does not file a Statement of Account, they will not be able to enforce their Notice of Contract or mechanics lien. This is because filing a Massachusetts mechanics lien is a two-step process, so both the Notice of Contract and the Statement of Account must be recorded.

Without a valid Statement of Account, the Notice of Contract is essentially considered null and void. You must, therefore, ensure that you file a valid Massachusetts Statement of Account to maximize the possibility of recovering the payment that you worked hard to earn.

How to file a Massachusetts General Contractor Statement of Account

How to file a Statement of Account in Massachusetts

1. Prepare the Massachusetts Statement of Account

The Massachusetts Statement of Account must generally include the following basic details:

  • Your name and address
  • The name and address of the property owner
  • A brief description of the project location sufficient for identification
  • A “just and true account” of the payment for your services

The just and true account is a reasonable breakdown of the amount for all the services that you furnished to the property. In general, this account can include the following:

  • The contract amount (as stated in your contract with the property owner)
  • Change order amounts
  • Previous payments received
  • Disputed payments
  • Other credits due to you
  • The total amount you are claiming with the Notice of Contract

You must not inflate any of the amounts in an effort to recover more money than what is due to you. All amounts included in your Massachusetts Statement of Account must be reasonable, and ideally, you have the proper documents to back your claim (e.g. contract, invoices, change order forms, etc.).

2. File the Statement of Account

The Statement of Account must be recorded in the same county clerk office where the Notice of Contract was recorded. This should be the same county where the project property is located. As with the Notice of Contract, there are filing fees associated with recording a Notice of Contract, so make sure that you are prepared to shoulder those costs.

You can either visit the county clerk’s or mail your Statement of Account in Massachusetts. When you are mailing your document, make sure that you include the exact amount for the filing costs. Calling the county clerk’s office beforehand to know how much it will cost to file a Statement of Account is a good practice to avoid complications.

Also, remember that there is a hard-and-fast deadline for filing the Massachusetts Statement of Account for general contractors. You must file your Statement of Account by the earliest date among the following:

  • 90 days after the recording of a Notice of Substantial Completion
  • 120 days after the recording of a Notice of Termination
  • 120 days after the last day of furnishing labor or materials to a property

Make sure that you file on time. Recording a Statement of Account after the proper deadline has passed will invalidate your document as well as your entire mechanics lien claim.

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Best practices when filing a Statement of Account

1. Keep your financial records organized

A Statement of Account will be easy to prepare if all your financial records for a project are properly organized. When you properly track all your payments and invoices, you can easily calculate the balance and organize them on a sheet.

2. Do not inflate the amount in your Statement of Account

The Statement of Account must be “just and true,” so trying to include attorney fees and other legal expenses in your tally will likely invalidate your mechanics lien claim. Stick with the amounts that are related to your services in the project. It is best practice to be honest and to recover only the payment that you have duly worked hard for.

3. Enforce your Massachusetts mechanics lien if payment does not arrive

A mechanics lien will most likely work to get you paid. It is the only method that adds a burden to the owners by limiting the market value of their properties, so most of the time property owners will want to get rid of a mechanics lien by paying off the outstanding debt.

If, however, the owner still does not release the payment, remember that you have 90 days after recording the Statement of Account to enforce the mechanics lien. Enforcing a Massachusetts mechanics lien means initiating a lawsuit against a property, which can allow you to recover payment through its foreclosure sale.

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