Blanket Lien Foreclosure 

Posted: 1:00 am Mon, July 6, 2009
By Minnesota Lawyer

A contractor may foreclose a perfected blanket mechanic’s lien on less than all the property subject to the lien, provided that the equities demonstrate that the foreclosure does not unfairly burden the property foreclosed on.

In this case, where a contractor performed work on every lot in a development under one contract with the developer, which held title to all the land; the contractor was a lienholder junior to a bank’s development mortgage; the lender and developer entered a loan modification agreement, releasing a number of lots from the development mortgage; and the contractor’s lien thereby became senior on the lots released by the agreement; we conclude that allowing the contractor to foreclose its entire lien claim on less than the entire property balances the equities and construes the lien laws liberally to effect their purpose because doing so places the parties in the same position as if the project had been developed without any problems.

Affirmed in part, reversed in part, and remanded.