The former Worcester County Courthouse at 2 Main Street was supposed to be converted into residential housing units and retail space after the City reached an agreement in March 2015 to sell it to Brady Sullivan Properties, LLC, a New Hampshire real estate development company. Some signs of progress have occurred since then, including $2 million in environmental remediation work. But as of last week, the City was informed that the developer was not moving forward with the project and Brady Sullivan Properties, LLC terminated the sales agreement.
For the time being, the City remains the owner of 2 Main Street. It will be responsible for the maintenance and upkeep on the building until a new buyer/developer can be found. The property will be put back out for bid and City Manager Edward M. Augustus Jr. said in a statement that he is confident a qualified developer can be found.
What does this mean for contractors who worked on the former Courthouse while it was under agreement with Brady Sullivan Properties, LLC? This turn of events makes no difference for contractors who performed work and were paid in full. For contractors that have not been paid for work they performed, they should review their contracts to determine who agreed to pay for their services and what recourse they have against that party. Unfortunately, the property falls outside of the scope of the mechanic’s lien law and unpaid contractors, subcontractors and suppliers are not entitled to initiate a lien against the property for work they performed under contracts with Brady Sullivan Properties, LLC. Section 6 of Massachusetts General Laws chapter 254 provides that land, building or any structure on them owned by the Commonwealth or a municipality are exempt from mechanic’s liens. Even though the former Courthouse was under agreement to be sold to a private developer, the sale had not closed and the property remains owned by the City.
If you are contemplating working for or providing materials for the next developer interested in the former Courthouse project, plan ahead. Find out who will be paying for your work and who owns the project at that time. Since you will be excluded from asserting a mechanic’s lien on the property while it is owed by the City, if you will be working on the project prior to the developer taking ownership of the property ask about other options to secure payment for your work, such as a payment bond, personal guaranty or escrowing funds to pay for your services or materials. Once the property is sold to a developer, the project becomes like any other private project, subject to mechanic’s liens by unpaid contractors, subcontractors and suppliers as permitted under Massachusetts General Laws chapter 254. (Not familiar with mechanic’s liens? Review my earlier post on the basics of Massachusetts’ mechanic’s lien law).
The mechanic’s lien process is complex and prevailing on claims for payment of construction services and materials can be difficult without a solid understanding of the law. For questions or assistance with Massachusetts mechanic’s liens or recovery of payment for construction services or materials, contact Jessica Murphy at (508) 791-8500 or another member of Mirick O’Connell’s experienced Construction Group.