YES. However, the Mechanics Lien will only extend to the “leasehold interest” held by the tenant as opposed to the real Property itself. A leasehold interest is the interest that a tenant has to use the Property by and through the lease agreement. This is typically not the type of “interest” that you would want to foreclose on through a Mechanics Lien. However, there are two major benefits for filing a Lien when the work was performed for a commercial tenant.
First, the lease agreement between the tenant and the landlord should have a provision in it which expressly prohibits the tenant from allowing a Mechanics Lien to be filed against the Property or against the “leasehold interest.” Consequently, by filing the Lien you will put the tenant in default of the lease. Second, as an incentive to obtain a tenant or keep a pre-existing tenant, landlords will commonly agree to pay for some of the tenant improvements by way of tenant improvement money, also known as “TI” money. Usually, the landlord will not release the TI money until the construction is complete and the tenant has obtained a Mechanics Lien waiver from the General Contractor representing that all subcontractors/suppliers have been paid in full. By filing a Lien, you will likely prevent the release of the TI money until your Mechanics Lien is resolved.
The process for filing a Lien against the leasehold interest is exactly the same as filing a Lien against the real Property, with the only two differences being that the tenant becomes the “Property Owner” (since he owns the leasehold interest) and the Property description should state that the Mechanics Lien is being recorded against “the leasehold interest owned by [tenant’s name] for real Property located at [address and legal description].” All other requirements are the same.
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