Mechanics Liens in Delaware
If you’re a contractor, a subcontractor, or a supplier and you haven’t been paid, it may be to your advantage to obtain a mechanics lien as an alternative to filing a standard debt collection lawsuit. However, there are a lot of technical requirements that must be complied with in order to avoid having your mechanics lien case dismissed.
One of the most important things to keep in mind is that your documents must be filed within a certain period of time. It can’t be filed too early, and it can’t be filed too late. The time requirements are different depending on whether you’re a (1) contractor or (2) a subcontractor or supplier.
Contractors
If you’re a contractor who has a contract with the owner of a structure and you’ve either furnished both labor and material or you’ve provided construction management services in connection with the furnishing of labor and material, you’re required to file your statement of claim within 180 days after the completion of the structure. Your claim will be considered timely if it’s filed within 180 days of any one of the following 9 qualifying events:
(1) The date of purported completion of all the work called for by the contract itself
(2) The date when the statute of limitations commences to run in relation to the particular phase or segment of work performed pursuant to the contract, to which phase or segment of work the statement of claim relates, where such date for such phase or segment has been specifically provided for in the contract itself;
(3) The date when the statute of limitations commences to run in relation to the contract itself where such date has been specifically provided for in the contract itself;
(4) The date when payment of 90% of the contract price, including the value of any work done pursuant to contract modifications or change orders, has been received by the contractor;
(5) The date when the contractor submits his final invoice to the owner or reputed owner of such structure;
(6) With respect to a structure for which a certificate of occupancy must be issued, the date when such certificate is issued;
(7) The date when the structure has been accepted, as provided in the contract, by the owner or reputed owner;
(8) The date when the engineer or architect retained by the owner or reputed owner, or such other representative designated by the owner or reputed owner for this purpose, issues a certificate of completion; or
(9) The date when permanent financing for the structure is completed.
Subcontractors and Suppliers
If you’re a subcontractor or supplier, then you must file your claim within 120 days from the completion of the labor performed or from the last delivery of materials furnished. Your claim will be considered timely if it’s filed within 120 days of either of the following 2 events:
(1) the date final payment including all retainage is due to you, or
(2) the date final payment is made to the contractor
The courts in Delaware will scrutinize your claim to make sure you’ve complied with all of the required steps. For example, if you’re a subcontractor, the rule is that your claim has to be filed within 120 days from the completion of the work. This means that your labor has to be completed before you can file your claim. So the 120 days filing period does not begin until you’ve completed your work. To show that you haven't filed too early, your statement of claim must specify the finishing date.
