Sale of Property is Required in Mechanic’s Lien Enforcement Orders

Maine’s mechanic’s lien statutes (10 M.R.S.A. §§ 3251-3269) grant an automatic security interest to contractors, suppliers, surveyors and others in land and/or buildings for which they performed work or provided materials, so long as it was done pursuant to a contract with or by consent of the owner of the land and/or buildings. A court action to enforce the lien must be commenced within 120 days of ending work or providing materials.

Settlement discussions regarding this sort of litigation usually focus on how much money the property owner needs to pay to satisfy the claimant. However, owners and contractors alike should note that if the litigation results in a judgment for the claimant, the statute requires that the court orders at least a portion of the owner’s land and/or buildings be sold to satisfy the judgment.

The Maine Supreme Court made this clear in Cote Corp. v. Kelley Earthworks, Inc., 2014 ME 93, 97 A.3d 127. In that case, the lower court had initially ordered the sale of the property in question. After reviewing a motion to set aside filed by Kelley that included evidence that the property was worth over 33 times more than the principal judgment amount, the lower court amended its judgment to remove the sale order and instead awarded Cote a money judgment. Both parties appealed.

After reviewing the relevant statutes, the Court said “[w]e conclude that the mechanic’s lien statutes require a sale of Kelley’s property in order to satisfy Cote’s lien, but they do not necessarily require a sale of the entire parcel.” Id. at ¶ 17, 97 A.3d at 133. The Court pointed out that 10 M.R.S.A. § 3259 requires an order of sale but allows the court to describe “a suitable lot” to be sold, and that § 3260 allows a claimant to obtain a money judgment for any deficiency still owed after the sale of the lot.

Pursuing a mechanic’s lien claim is sometimes the only way that a contractor or supplier can get paid, and defending against a mechanic’s lien claim is sometimes required for an owner to challenge the amounts billed by a contractor or supplier. The fact that a sale of at least part of the property in question is required if the claimant obtains judgment makes this an even more effective tool for contractors and suppliers. Based on the potential risk, property owners should pay all such valid claims, and only challenge claims that the owner believes cannot be proven.

The attorneys at Gosselin & Dubord, P.A. are experienced litigators whose clients include contractors and subcontractors as well as property owners. If you have any questions regarding mechanic’s liens or need representation in connection with any such matter in Maine, please contact Gosselin & Dubord, P.A. at 207-783-5261 or collections@gosselindubord.com.