Mechanic's Lien Can Be Placed on Single Space

Facts: A tenant leased 4,375 square feet in a building and hired a contractor to do the buildout of the space. The contractor hired a subcontractor to do the work. Upon completion of the work, the tenant paid the contractor, but the contractor failed to pay the subcontractor.

The subcontractor filed a mechanic's lien against the tenant's space and sued all parties involved—the building owner, the tenant, and contractor. The building owner, tenant, and contractor argued that the lien was void because the law required pre-lien notice to be given whenever an attempt is made to file a mechanic's lien against a property that is less than 5,000 square feet. The trial court ruled in favor of the building owner, tenant, and contractor. The subcontractor appealed.

Decision: A Minnesota Appeals court upheld the trial court's ruling.

Reasoning: The subcontractor argued that because a lien claimant can record a lien only against the entirety of the property, the lien claimant must consider the entire property for the purpose of calculating the total usable square feet—which in this case would exceed 5,000 square feet and eliminate the need for a pre-lien notice.

However, the subcontractor cited no legal authority to support its argument, and state law only required a “description of the premises to be charged,” for purposes of filing the lien. The court ruled that the state's legal requirement could be construed as a single space, thus eliminating the subcontractor's argument for including the entire property in its claim.

• Wallboard, Inc. v. St. Cloud Mall, LLC, December 2008