Wednesday, December 1, 2010

Lien Law Online eLert for 11/30/2010 - Alaska

November 30, 2010

We notified you back in early September that the Alaska Legislature passed House Bill 253 which extends the time within which to file a lien in Alaska from 90 to 120 days. This is a reminder of the change and notification that the chapter and related forms have been revised to reflect the change.

Robert J. Dickson, Esquire (Contributing Author)
Atkinson, Conway & Gagnon, Inc.

Wednesday, November 17, 2010

Lien Law Online eLert for 10/26/2010 - Colorado

October 26, 2010

This is a reminder of the changes that are in effect in Colorado's lien statutes regarding breaches of the “Trust Fund” statutes and modifications to the law regarding Lien Waivers.

Please refer to the revised Colorado chapter for text of the changes.

Gilbert R. Egle, Esquire (Contributing Author)

Preeo Silverman Green & Egle, P.C.

Thursday, October 14, 2010

Lien Law Online eLert for 9/30/2010 - Arkansas

September 30, 2010

A revised RESIDENTIAL PRE-CONSTRUCTION NOTICE TO OWNER form for use in Arkansas has been up-loaded to the website. This revised form should be used effective immediately.

Allen C. Dobson (Contributing Author)

Cross, Gunter, Witherspoon & Galchus, P.C.

Friday, September 10, 2010

Lien Law Online eLert for 9/7/2010 - Alaska

September 7, 2010

Recently, the Alaska Legislature passed House Bill 253 which extends the time within which to file a lien to 120 days. Under prior law, contractors, material suppliers, and service people who have not been paid by property owner for labor or goods, had 90 days from the date of completion of the work, or from the date the service ceases, to file a lien on the property to secure payment of that debt.

This extra time will give contractors, material suppliers, and service people an additional 30 days to work with property owners to secure payment or to negotiate a reasonable payment plan between a creditor and debtor.

This change is effective today, September 9, 2010. Revisions will be uploaded to the Alaska chapter in a few days to reflect the change.

Robert J. Dickson, Esquire (Contributing Author)

Atkinson, Conway & Gagnon, Inc.

Tuesday, September 7, 2010

Lien Law Online eLert for 9/2/2010 - Mississippi

September 1, 2010

Mississippi recently enacted changes to its lien and stop notice statutes, effective July 1, 2010, to provide lien protection to rental and lease equipment suppliers. Changes have been made to the Mississippi chapter.

David W. Mockbee (Contributing Author)

Mockbee Hall Drake & Hodge, P.A

Click here to visit now!

Monday, August 23, 2010

Lien Law Online eLert for 8/23/2010 - Missouri

August 23, 2010

New provisions to the Missouri mechanic’s lien law (§429.016, R.S.Mo) take effect on August 28, 2010 regarding the construction of new residential property. It applies to any residential property transferred on or after November 1, 2010. The new law generally applies only to new construction and not remodeling or repairs to residential property. It does include residential condominiums, townhouses or cooperatives regardless of the number of units. The new law allows owners to file a notice with the recorder of deeds of intended sale, and date of sale, of the property at least 45 days prior to the proposed transfer. In that event, the lien claimant must file with the recorder of deeds a “Notice of Rights” at least 5 days prior to the proposed transfer, giving the owner notice identifying, at a minimum, the claimant, claimant’s address and telephone number, the legal description of the property claimed against, and the person with whom the claimant contracted, including address and telephone number. If such notice is properly given, the claimant need not file the 10-day advance notice of intent to file a lien. A claimant’s failure to comply with this notice provision is deemed the claimant’s waiver of all mechanics’s lien rights.

The new law also:

• Imposes specific information that must be included in the claimant’s mechanic’s lien statement;

• Allows the owner to provide substitute collateral in lieu of a lien against the property;

• Limits the effect of partial lien waivers to the amount claimed due at the time the claimant signs the waiver;

• Imposes penalties for failure to execute final lien waivers upon payment in full.

These revisions require changes to three (3) forms contained in the Missouri chapter. Revisions to the chapter and forms will be available online by the effective date. August 28, 2010.

Darcy V. Hennessy, Esquire (Contributing Author)
Hennessy and Boe, P.A.

Thursday, July 1, 2010

Lien Law Online eLert for 7/1/2010 - Washington

July 1, 2010

In a recent case, Williams v. Athletic Field, Inc., 228 P.3d 1297, ---Wn. App.--- (2010), the Washington Court of Appeals ruled that in order for the Claim of Lien to be valid, it must contain a proper acknowledgment as required under Washington’s Real Property & Conveyance Act (RCW 64.08), which requires certain language to be used and acknowledged by a notary. The language to be used depends on whether the lien claimant is a corporation or individual. The problem at issue in the recent case arises when a claimant is a corporation and relies on the form of lien provided in the lien statute itself (and the lien form relied upon by most claimants). That form does not contain a proper acknowledgment for corporate claimants. Thus, if you are a corporation and use the statutorily proscribed lien form, you risk having the lien declared invalid and unenforceable. It also appears that the form would not be proper for individual claimants because the acknowledgment does not meet the requirements of individual acknowledgments in 64.08 either.

The Washington contributing author has provided a Claim of Lien form which contains 2 options for acknowledgment – one for a corporation and one for an individual. Athletic Field, which was the losing lien claimant, has filed a petition for review in the Washington Supreme Court and one of the issues presented is whether good faith reliance on the lien statute’s form should “save” the lien from being declared invalid. Unfortunately, it could be some time before that issue is decided, so in the meantime, claimants should use the revised Claim of Lien form that is now included in the Washington chapter.

Further, if you have recently recorded a lien using the deemed invalid form, you may be able to amend the claim and use the new form as long as less than 90 days from your last day of work has passed.

Jason R. Wandler, Esquire (Contributing Author)

Oles, Morrison, Rinker & Baker

Monday, June 21, 2010

Lien Law Online eLert for 6/21/2010 - Virginia

June 21, 2010

Effective July 1, 2010, the requirements that apply to mechanics’ liens on one and two family residential dwelling units will change in Virginia. One and two family residences are the only types of projects for which Virginia requires notification by the lien claimant prior to or shortly after the commencement of work in order to have a valid mechanics’ lien. In order to have a valid lien, a person seeking to claim a lien on such property must notify the mechanics’ lien agent at the commencement of work that he seeks payment for labor performed or materials furnished. The notice must be in writing and delivered by registered or certified mail, or physical delivery, within 30 days of the first date the claimant performs labor or furnishes material. If the claimant fails to give notice within the appropriate 30 day period, his lien is only valid as to work performed or materials furnished on or after the date that notice is ultimately given to the mechanics’ lien agent.

Under the current law, this pre-work notification only has to be given if at the time of issuance the building permit contains the name, mailing address and telephone number of the person designated as the mechanics’ lien agent. Effective July 1, 2010, the owner or lender has more flexibility in the naming the mechanics’ lien agent. The mechanics’ lien agent’s consent to act as mechanics’ lien agent no longer has to be in writing. The name, mailing address and telephone number of the mechanics’ lien agent is no longer required to be on the building permit at the time it is issued. The party obtaining the building permit is allowed to amend the permit to name a mechanics’ lien agent or to change the mechanics’ lien agent at any time.

The lien claimant’s notice must be now given to the mechanics’ lien agent “then named on the permit or amended permit”. (Senate Bill 105).

John S. Morris, III, Esquire (Contributing Author)
Beale, Davidson, Etherington & Morris, P.C.

Thursday, June 10, 2010

Lien Law Online eLert for 6/10/2010 - North Carolina

June 7, 2010

North Carolina Business Court Rules: Ordinary Progress Payment Lien Waiver Operates to Waive and Subordinate Lien Priority.

The North Carolina Superior Court, sitting as a specially designated Complex Business Court, recently ruled that an ordinary mechanic’s lien waiver, submitted in connection with an application for progress payment, operated not only to waive the dollar amount for which the contractor could enforce a lien, but waived also the Contractor’s “first date of furnishing,” thereby resulting in a loss of statutory priority.

In North Carolina, mechanic’s liens are granted a superior priority:

“A claim of lien on real property granted by this Article shall relate to and take effect from the time of the first furnishing of labor or materials at the site of the improvement by the person claiming the claim of lien on real property.” [NCGS §44A-10]

Also, in North Carolina, the grounds and consideration required for a general waiver of lien rights are narrowly proscribed:

“An agreement to waive the right to file a claim of lien on real property. . . which agreement is in anticipation of and in consideration for the awarding of any contract, either express or implied, for the making of an improvement upon real property under this Article is against public policy and is unenforceable. This section does not prohibit subordination or release of a lien granted under. . . this Article.” [NCGS §44A-12(f)]

Accordingly, the typical interpretation in North Carolina is that a contractor has lien rights that date from its “first furnishing;” those lien rights may not be waived generally absent the payment of special consideration, and ordinary progress payment lien waivers operate only to reduce the dollar amount of an otherwise intact lien right for all unpaid sums.

In Wachovia Bank v. Superior Construction Corporation, North Carolina Superior Court, Mecklenburg County, 07 CVS 21256, the Court recently addressed the classic priority conflict between a construction lender’s deed of trust and a general contractor’s lien rights. The general contractor first furnished work on April 22, 2005. The construction lender’s deed of trust was recorded May 19, 2005. Accordingly, under NCGS §44A-10, the general contractor’s lien rights take priority over the lender’s security interest.

However, the contractor had made several initial applications for progress payments, for which it had been paid. In connection with those applications, the contractor had submitted an interim lien waiver, stating that the contractor does hereby:

“waive, relinquish, surrender and release any and all lien, claim, or right to lien on the above described project and premises, arising under and by virtue of the mechanic’s lien laws of the State of North Carolina on account of any labor performed or the furnishing of any material to the above described project and premises up to and including the 31st day of May, 2005.”

In a separate affidavit, the contractor purported to waive any claim of lien against the property “with regard to the amount of funds actually paid.”

Relying upon case law construing situations where a contractor’s waiver or subordination of lien rights was expressly bargained for in consideration of obtaining project financing1, the Court in Wachovia found that the lender’s ordinary funding of progress payments constituted the necessary contractual consideration for a general waiver of rights through May 31, 2005. As a result, the contractor‘s lien rights were not merely limited to unpaid sums. The contractor was deemed to have waived all lien rights for the period beginning with the date of first furnishing through May 31, 2005. Accordingly, all of the contractor’s remaining lien rights, including rights to retainage withheld for the period prior to May 31, 2005, were now inferior to the lender’s deed of trust. The court rejected the contractor’s arguments that the waiver was intended to waive only the dollar amount of the contractor’s rights, but to retain all other rights, including its statutory priority. The court rejected the contractor’s suggestion that the result desired by the lender required the execution of a formal subordination agreement.

The case is on appeal.

[1] See, e.g., Mace v. Bryant Construction Corp., 48 N.C.App. 297, 303 (1980).

Steven D. Hedges, Esquire (North Carolina Contributing Author)

Sparrow Wolf & Dennis, P.A.

Monday, June 7, 2010

Lien Law Online eLert for 6/7/2010 - Oregon

June 4, 2010

Oregon recently amended ORS Chapters 87 and 701 to protect residential purchasers from lien claimants and to penalize unlicensed subcontractors. See HB 3689 (2010). Specifically, the amendments bar: (1) a purchaser of residential property from waiving his/her protection from claims of lien, and (2) an unlicensed subcontractor from perfecting a claim of lien against owner-occupied residential property.

Importantly, these provisions take effect on January 1, 2011.

Thomas A. Larkin, Esquire (Contributing Author)

Stewart Sokol & Gray LLC

Lien Law Online eLert for 5/26/2010 - Utah

May 26, 2010

In recently enacted S.B. 107, which went into effect in May, the Utah Legislature included language in the lien statute addressing the time for Enforcement under Section 38-1-11 in the event of bankruptcy. The change allows that if an owner files for protection under the bankruptcy laws of the United States before the expiration of the 180-day period to file an action to enforce a lien, the action may be filed within 90-days after the automatic stay under the bankruptcy proceeding is lifted or expires.

Brian J. Babcock, Esquire (Contributing Author)

Wednesday, March 31, 2010

Oklahoma Court Provides Clarification

March 31, 2010

The Oklahoma Court of Civil Appeals recently construed and provided clarity to the timing requirements under Oklahoma’s Pre-Lien Notice statute, which applies to certain lien claimants other than the original contractor. The current section states:

“Prior to the filing of a lien statement pursuant to Section 143.1 of Title 42 of the Oklahoma Statutes, but no later than seventy-five (75) days after the date of supply of material, services, labor, or equipment in which the claimant is entitled or may be entitled to lien rights, the claimant shall send to the last-known address of the original contractor and owner of the property a pre-lien notice pursuant to the provisions of this section.” Okla. Stat. tit. 42, § 142.6(B)(1).

In the case of Izza Robert Jones Jr., d/b/a Professional Plumbing Serv. v. Purcell Invest., LLC, 2010 OK CIV APP 15, --- P.3d ----, 2009 WL 5862436 (Okla. Ct. Civ. App. 2009), the Oklahoma Court of Civil Appeals agreed with the plaintiff/lien claimant that the statute’s timing requirements were ambiguous as a matter of law. Id. at ¶ 5. The court stated that “[w]hether the 75 days begins after services or materials are first supplied, after they are last supplied, or sometime in between, is not clear.” Id. In analyzing the purpose of Oklahoma’s statutorily created lien rights in concert with the notice provisions designed to protect the rights of property owners, the court concluded that to be timely, a pre-lien notice must be provided to the original contractor and owner of the property “no later than 75 days after labor, services, material or equipment have last been supplied by the lien claimant.” Id. At ¶ 19 (emphasis added).

The chapter is being updated to reflect the clarity provided by this decision.

A. Scott McDaniel, Esquire (Contributing Author)

McDaniel, Longwell, Acord & Kroll, PLLC

Tuesday, March 9, 2010

Lien Law Online eLert for 3/9/2010 - Wyoming

March 9, 2010

A recent decision in the Wyoming Supreme Court has resulted in a change in language that must be used on the form of Lien Statement.

In the case of Winter and Jo/Etta, LLC v. Andy Pleasant dba A. Pleasant Construction, (Wyoming Supreme Court) S-09-0058, S-09-0059, 2010 WY 4; 2010 Wyo. Lexis 4 (decided 1/12/2010), the Court held an amended lien statement filed pursuant to W.S. 29-1-301(a), which provides in pertinent part that, "In order to have a perfected lien pursuant to this title, a lien claimant shall file with the county clerk a lien statement sworn to before a notarial officer" was, as a matter of law, invalid if the lien affiant does not swear to the "truth and accuracy of the lien statement". It was not enough for the construction company's attorney to assert he was "duly sworn"...and was signing with authority and on the behalf of the client. Without any change in the statutory language, the Court held that the plain language of the statute requires an affiant to swear to the "truth and accuracy of the lien statement" in order for it to be valid.

The Wyoming chapter has been updated with the foregoing information and the Lien Statement form has been updated to reflect the court’s decision.

Raymond (Ray) W. Martin, Esquire (Contributing Author)

Sundahl, Powers, Kapp & Martin, LLC

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Monday, March 8, 2010

Lien Law Online eLert for 3/8/2010 - Georgia

March 8, 2010

Recent decisions of the Georgia Court of Appeals have confirmed the requirement that a valid Notice of Commencement of the construction project must set out the true owner of the property on which the improvements are being made, and that it also must include a legal description of the property being improved. The failure to correctly list the property owner and include a legal description of the property will make the Notice of Commencement invalid, thus relieving a potential remote lien claimant of the requirement to provide a Notice to Contractor to the Owner and Contractor in order to preserve lien rights. In addition, another Georgia Court of Appeals case held that the failure to file the Notice of Commencement within 15 days of physically starting work at the project site will not render the Notice of Commencement invalid, and will not relieve a remote lien claimant from its obligation to serve a Notice to Contractor, if the Notice of Commencement is filed by the time a potential lien claimant must have provided its Notice to Contractor. In other words, a late-filed Notice of Commencement, or a defective Notice of Commencement which is later correctly filed, still may be valid and enforceable as to remote lien claimants who have not supplied labor, material or equipment to the project site at the time of the filing of the proper Notice of Commencement. Although this Georgia Court of Appeals case did not specifically address the consequences of a re-filing of a Notice of Commencement to replace a previously-filed but defective Notice of Commencement, the rationale of the Court would suggest that such a re-filed Notice of Commencement will still be valid as to later-performing sub-subcontractors and suppliers to subcontractors.

For more information, contact Frank Riggs, Contributing Author of the Georgia Chapter at

Frank E. Riggs, Jr., Esquire (Contributing Author)

Troutman Sanders, LLP

Friday, March 5, 2010

Lien Law Online eLert for 3/5/2010 - Oregon

March 5, 2010

The Oregon chapter of Lien Law Online has been updated and revised to account for recent changes in Oregon law. We would like to welcome our new Contributing Author for Oregon, Thomas A. Larkin, Esq who is with the firm of Stewart Sokol & Gray, LLC in Portland.

Below is a summary of Oregon's 2010 lien law updates:

Information Notice to Owner

Oregon now requires the original contractor on a residential project to furnish an “Information Notice to Owner About Construction Liens” for contracts exceeding $2,000. ORS 87.093(4). Where the contract value is initially below $2,000, but subsequently increases during the course of performance, the contractor must deliver this notice not later than five days after he / she knows or reasonably should know that the contract will exceed $2,000. Id. These provisions change the previous $1,000 minimum contract value requirement for residential improvements. Other statutory Information Notice to Owner requirements remain the same.

The Oregon Legislature redacted a provision requiring delivery of an “Information Notice to Owner About Construction Liens” not later than five days after making an oral contract for a residential improvement.

Definition of Residential Construction and Residential Property

Oregon redefined “Residential construction or improvement” to mean “the original construction of residential property and the repair, replacement, remodeling, alteration or improvement of residential property.” ORS 87.093(8)(a).

“Residential property” now includes a residential dwelling’s driveway, swimming pool, terrace, patio, fence, porch, garage, basement and other adjacent or appurtenant structure to the residential dwelling. ORS 87.093(8)( c). Importantly, this list is not a limitation on what constitutes “residential property.”


The county or its officer or employee cannot be named a party to a foreclosure suit. ORS 87.083(2).

For the county to release a lien or return the money for a cash deposit to remove the lien, Oregon now requires a person to notify the lien claimant and treasurer that no one commenced a foreclosure suit within the statutory time constraints. ORS 87.088(1). Further, the notice must state that the lien claimant has fifteen (15) calendar days to object to the lien release or return of the money. Id. The notice must inform the claimant that an objection requires documentation evidencing a timely commencement of foreclosure proceedings or that the time to initiate a suit did not expire. Id. In the event of an objection, the treasurer reserves the right to decide how to distribute the money or to commence an interpleader action. Id.

The upated and revised chapter is now online. To review the bio on the new Contributing Author, Thomas A. Larkin, click here.

Contributing Author contact info:

Thomas A. Larkin, Esquire (e-mail)

Stewart Sokol & Gray LLC (website)

Wednesday, January 13, 2010

Lien Law Online eLert for 1/13/2010 - Illinois

January 13, 2010

The following change in the Illinois Mechanics Lien Act is in effect for Contracts entered into after January 1, 2010:

Section 7 of the Illinois Mechanics Lien Act has been amended to require original contractors for improvements to an owner-occupied single-family residence to give the owner written notice within 10 days after recording a mechanics lien. The amendment applies only to contracts entered into after January 1, 2010. This notice requirement is the only substantive change to Section 7. Other than adding subsection (d), which contains the new notice requirement, and breaking out Section 7's previously-existing statutory language into subsections (a), (b) and (c), Section 7 remains the same.

Kenneth M. Roberts, Esquire (Contributing Author)

Kevin L. Kolton, Esquire (Contributing Author)

Schiff Hardin LLP