- New Mexico is a UNPAID BALANCE lien state
Persons who are required to have a construction license issued by the New Mexico Construction Industry Licensing Commission and who do not have such a license are not entitled to protection of the lien law.
The owner of an interest in the property, who has in fact not caused construction, alteration or repair, may avoid the attachment of the lien on that person’s interest by posting a Notice of Non-Responsibility within three (3) days of learning of the construction or repairs,
- The notice does not apply to claims made on residential property that involves four or less dwelling units. The notice also does not apply to those mechanics or materialmen who contract directly with "original contractors." An "original contractor" is one that has its contract direct with the owner of the improvements.
- The New Mexico statute provides a possible method for obtaining information in order to comply with the Preliminary Notice requirement. A mechanic or materialman may make a Request for Information to the owner or original contractor and, within five days after a request is made, that person should give to the mechanic or materialman:
- the original contractor's name, address and license number, if there is an original contractor on the project;
- the owner's name and address;
- a description of the property;
- and The name and address of any bonding company or other surety that is providing either a payment or performance bond for the project.
- The statute provides that if the required information is not given, the person to whom the request was made cannot claim as a defense that notice was not given. Note that the request can go to either the owner or the original contractor. It is only prudent to give the Preliminary Notice, even if there is no response to the Request for Information.
Notice Speed Bumps
- For those persons not contracting directly with an original contractor on non-residential construction, if the amount of the lien will be $5,000.00 or greater, then a preliminary notice must be given in the first 60 days.
- Preliminary notices are not required for first tier subcontractors or first-tier suppliers, nor are they required on residential construction.
- If provided later than 60 days, the notice relates back only to services and materials that were provided in the previous 30 days.
Mechanic’s Lien Speed Bumps
- To file a lien original contractors have 120 consecutive calendar days after completion of their contract. Claimants other than original contractors have 90 consecutive calendar days after substantial completion of the project.
- In order to have any effect, a Claim of Lien must be filed with the County Clerk for the county in which the property is located or in which some part of the property is located.
- Although this implies that for property which crosses county boundaries, one must file in only one of the counties, it is preferable to file in both so that a search is more likely to pick up the property and to cover chances of error on the boundary of counties.
Foreclosure Speed Bumps
- At the expiration of two years from the filing date, the Claim of Lien becomes ineffective unless suit to foreclose the lien against the property has been commenced or a binding arbitration commenced.
- The New Mexico District Court for the district in which the property is located is the appropriate court to commence the foreclosure.
- When there are multiple liens, validly obtained, the priorities among them are made by rank in the following order:
(1) persons other than original contractors or subcontractors;
(2) subcontractors; and
(3) original contractors.
- Proceeds from the sale of property are applied first to pay all the liens in rank (1), then rank (2) and finally, rank (3). If there is an insufficient amount to pay all of the liens in a rank in full, the liens are paid pro rata.
- Claimants may ask for legal fees in their foreclosure action.
Oil and Gas Lien Speed Bumps
- Every person who performs labor or furnishes or hauls material, equipment, tools, etc., in digging, drilling, completing, maintaining, operating and repairing oil or gas well, or pipeline, or equipment in connection therewith, shall have a lien upon the land, leasehold, pipeline, buildings and equipment thereon, and the materials, tools, etc., so furnished, and the oil and gas well. Lien does not extend to the underlying fee or royalty interest unless expressly provided by contract. Verified claim must be filed by original contractor within 210 days, and by other lien claimant within 180 days after furnishing last material or last labor with the Clerk of the county in which property is located. Proceedings to enforce lien must be instituted within one year from date of filing.
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