Know your deadlines for filing mechanic’s liens in Ohio
Perhaps the most important part of recording a mechanic’s lien to help secure your right to payment is the strict obligation to meet the applicable deadlines, and it is important to understand what those deadlines are and when the applicable clock starts to run.
Assuming the claimant has complied with all other preconditions to recording a mechanic’s lien, including serving a Notice of Furnishing (if required), the claimant must ensure that it records its mechanic’s lien within the applicable deadline. Those deadlines commence to run from the date of the claimant’s last work or last furnishing of material for the project:
- One- or two-family dwelling or residential unit of condominium property – 60 days
- Oil or gas well – 120 days
- Other private project – 75 days
- Public project (attested account) – 120 days
Ohio courts have held that meeting the applicable deadline is absolutely mandatory (see e.g., United Masonry, Inc. v. K. W. F., Inc., 16 Ohio App. 2d 77, 45 Ohio Op. 2d 225, 241 N.E.2d 912 (8th Dist. Cuyahoga County 1968)), and the lien claimant has the burden of proof to show that the affidavit was timely filed (see e.g., State Street Bank and Trust Co. ex rel. Series 1900 v. Bare, 2003-Ohio-3332, 2003 WL 21468894 (Ohio Ct. App. 10th Dist. Franklin County 2003)).
The question then becomes: what constitutes the last date of work? The date of last work has generally been interpreted to mean work that is necessary to complete the contracted for improvement. As a result, punch list work will constitute last work because it is work that is incomplete and needs to be performed to complete the contracted improvement. See, e.g., Mark's Contracting Group, Inc. v. Jenter Development, 1996 WL 724758 (Ohio Ct. App. 9th Dist. Medina County 1996). Work performed to artificially extend lien rights and warranty work will not serve as the basis for determining last work. See e.g., Capital Elevator Service v. Heritage Development, 1989 WL 64051 (Ohio Ct. App. 5th Dist. Stark County 1989). Similarly, work on the project site is not sufficient to establish last work if it is not authorized. See e.g., Argo Constr. Co., Inc. v. Kroger Ltd. Partnership I, 2009-Ohio-2811, 2009 WL 1663952 (Ohio Ct. App. 12th Dist. Clinton County 2009).
The relatively short deadline to record a mechanic’s lien can present a significant problem for contractors that complete their work early in the project but have their retainage withheld until the entire project is complete. The deadline for such contractors to record a mechanic’s lien will frequently pass long before they receive, or even know whether they will receive, their retainage. Unfortunately, the law does not include any exceptions for such contractors, and they must decide whether to trust the party with which they have contracted and those upstream to pay retainage at the end of the project or record a lien out of an abundance of caution and risk alienating their business partners. A better approach may be to negotiate up front the release of such contractors’ retainage on an earlier timeline than that for other contractors that will continue to perform throughout the duration of the project.