This article was featured in the February 2026 edition of the Utility Contractors Association of New England, Inc.’s Construction Outlook.
In the waning weeks of 2025, a panel of the Massachusetts Appeals Court issued a summary opinion addressing whether a property owner could discharge a contractor’s mechanic’s lien where that owner was not signatory to the construction contract. Based on the “undisputed evidence,” the three-justice panel concluded that the property owner had “consented to the improvement of the property in question.” Therefore, the property owner’s attempt to discharge the contractor’s mechanic’s lien was ineffective. The opinion of the panel in this case is not the same as a binding decision of the full Appeals Court because it was issued under a special court rule that allows for quicker resolution of cases. Nevertheless, the case provides helpful guidance to contractors when it comes to preserving and perfecting mechanic’s lien rights when performing work on private projects.
The case arose out of a project for the construction of a marijuana cultivation facility. The contractor executed a written construction contract with the owner of the property at that time (the “Initial Owner”). However, unbeknownst to the contractor and before construction began, the Initial Owner conveyed the property to another limited liability company in a quitclaim deed for “no consideration paid” (the “Successor Owner”). The two owner entities were related: the owners of the Successor Owner “were the same parties” that had been “managing” the Initial Owner and were “seeking financing to build the facility.” The two owner entities even interacted with the contractor jointly “in pursuing the construction contract.” However, the Successor Owner was not a party to the construction contract.
As the contractor proceeded with its scope of work under its contract with the Initial Owner, it began to encounter payment issues. Although the Initial Owner paid the first two requisitions, several subsequent requisitions went unpaid. Apparently, the Initial Owner “began having difficulty securing funding to continue paying for construction.” In light of the non-payment, the contractor ceased work and filed a Notice of Contract under the Massachusetts Mechanic’s Lien Statute against both the Initial Owner and the Successor Owner.
The Superior Court ordered the Initial Owner to proceed to arbitration with the contractor pursuant to the arbitration clause of the contract. The arbitrator concluded that the Initial Owner had breached the contract and awarded damages to the contractor. When the case made its way back to the Superior Court, the Successor Owner moved to dismiss the mechanic’s lien on grounds that it was not a party to the construction contract. The Superior Court denied the Successor Owner’s motion and the Appeals Court panel affirmed.
The Successor Owner argued that the contractor’s Notice of Contract should be discharged because it improperly stated that the contractor had a contract with the Successor Owner. According to the Successor Owner, the contractor had therefore failed to “strictly comply” with the Mechanic’s Lien Statute and the contractor’s assertion of a contract with the Successor Owner constituted a “knowing and willful” misrepresentation. The panel of the Appeals Court responded by stating: “[w]e are not persuaded.”
In support of its opinion, the appellate panel stated that the Mechanic’s Lien Statute “explicitly contemplates a situation such as this, in which a contractor has a contract with a tenant [i.e., the Initial Owner] to improve real property.” In this situation, the panel stated that the “contractor may obtain a mechanic’s lien on the property . . . when the owner of the land [i.e., the Successor Owner] has consented to the improvement in question.”
To determine whether the Successor Owner consented to the construction work, the panel looked to evidence of the Successor Owner’s “contemplation and active encouragement” of the work. In this case, there was “ample undisputed evidence” demonstrating that the Successor Owner “consented” to the work. Not only were the owners of the two companies the same, the property was conveyed for no consideration paid and the two companies interacted with the contractor as one with respect to construction. In addition, the Successor Owner had even issued a letter to the town “expressing [its] consent to the improvement of the property for purposes of obtaining permits and approvals.” In these circumstances, the Successor Owner could not dismiss the mechanic’s lien.
The Mechanic’s Lien Statute can be a powerful tool for contractors seeking to secure payment for work performed on private projects. For those of you who perform private work, it is important to know that the right to lien property is a statutorily-created right. This means that, in order to preserve and perfect your lien rights, you must be sure to comply with the applicable requirements of the statute. Contractors are encouraged to perform their due diligence to determine the identity of the owner of the property, not only at the time of contract execution but periodically during the course of the project. In many cases, contractors may be contracting with the owner directly. In other cases, the contractor may be contracting with a tenant, and not directly with the property owner. In those cases, the owner may have a defense to a mechanic’s lien if it has not consented to the improvements. This is a fact-dependent analysis.
In this case, the property was transferred after the contractor had filed its Notice of Contract. As a result, although not discussed in this opinion, the panel of the Appeals Court might have reached the same result under another section of the lien statute that addresses lien rights when property interests are conveyed. In addition, it should be noted that there is authority to support a conclusion that, if the contractor had filed its notice of contract before the property was conveyed and had otherwise complied with the applicable statutory requirements, “the lien prevails against all who hold title to the encumbered property after the notice of contract is recorded.”
Lastly, the timing of the filing of a Notice of Contract can also be important when it comes to a contractor’s rights under the Massachusetts Prompt Payment Act. In this regard, a contractor that files a Notice of Contract prior to submission of its first application for payment on a Prompt Payment Act project can potentially preserve a potential pay-if-paid defense in the event of owner insolvency.
Suffice it to say, given the detailed requirements of the Mechanic’s Lien Statute and the potential applicability of the Massachusetts Prompt Payment Act to a given project, contractors are advised to plan ahead when it comes to private contracting and undertake steps at the outset and during construction in order to preserve their rights and protect their interests. For certain projects, it may also be advisable to confer with a title examiner to ensure proper steps are taken to evaluate and preserve contractor rights.
