Mechanic’s Lien Source Book – Can You Include Damages in Your Mechanic’s Lien Claim?

A mechanic's lien is a powerful device to enforce payment on a construction project. But is there a limit to the amount you can claim? What about damages for breach of contract? I am not aware of any state which would allow direct or consequential damages to be inserted into a mechanic's lien. The reason…

A mechanic's lien is a powerful device to enforce payment on a construction project. But is there a limit to the amount you can claim? What about damages for breach of contract?

I am not aware of any state which would allow direct or consequential damages to be inserted into a mechanic's lien. The reason is that such claims are strictly limited to the labor, materials, and equipment submitted to the project which results in some form of permanent improvement. Your damages, over and above the amount owed on the contract and change orders, would be outside this scope.

Here are some examples of damages which could not be included :

o Loss of profits on other jobs. As a result of not being paid $ 10,000, you were unable to use that money to advance labor and materials for another large job you were just awarded. You had to turn that job down and lost a profit.

o Lack of productivity. Assume there have been so many changes and miscommunications on the job that you had to start, stop, mobilize, demobilize, expand, shrink, fabricate, re-fabricate, and change your work force and productivity. You have lost countless hours and had to pay your employees out of pocket. This is typically not included in the mechanic's lien.

o Delay damages. You have been delayed in the start of the project as well as during the course of construction.

o Extended overhead. The architect has made so many changes to that you have been on the job much longer than expected and have had to carry a basic overhead.

It is important to remember that although these items may not be included in your lien, you can include them in a lawsuit or arbitration for breach of contract and consequential damages against the person you have your contract with.