Wednesday, July 18, 2012
Lien Law Online eLert for 7/18/2012 - Utah
July 13, 2012
With Utah’s mechanics’ lien statutes having gone through a substantial overhaul in 2011, the amendments in 2012 were minimal, relatively speaking, and mainly cosmetic. One primary change is that the code sections governing mechanics’ liens were renumbered. They were also divided to distinguish between lien laws for private projects and certain lien-based laws (e.g., notices of commencement and preliminary notices) applicable to payment bond claims on government projects. The sections governing private projects are now identified as Utah Code sections 38-1a-102 through 38-1a-804, while those pertaining to government projects are identified as sections 38-1b-102 through 38-1b-203.
Another amendment is the addition of Utah Code section 38-1a-309, which codifies the recovery of interest on mechanics’ lien claims at a certain statutory rate (ten percent per year) unless a governing contract requires a different rate.
Brian J. Babcock, Esquire
Babcock Scott & Babcock P.C.
Friday, July 6, 2012
Lien Law Online eLert for 7/5/2012 - California
July 5, 2012
The long awaited changes to California's lien statute went into effect July 1. The changes required revisions to all fourteen (14) forms that are contained in the chapter; so make sure you are using up to date forms in the future.
Visit www.lienlawonline.com to review the revised text and forms.
B. Scott Douglass, Esquire (Contributing Author)
David K. Ismay, Esquire (Contributing Author)
Farella Braun + Martel, LLP
Thursday, May 10, 2012
Lien Law Online eLert for 5/9/2012 - Iowa
May 8, 2012
The Iowa legislature recently adopted significant revisions to Iowa’s mechanics’ lien statute. These changes will take effect on January 1, 2013. Below are highlights of the major changes, which will be addressed in further detail in a revised Iowa section of LienLawOnLine.
The first major change to Iowa’s mechanics’ lien law is the creation of a centralized online filing system for mechanics’ liens on both commercial and residential projects. Previously, liens were filed with the clerks of court in each of Iowa’s ninety-nine counties. Under the new system, the Iowa Secretary of State will administer a website for filing and posting of liens. The system will include the option of direct filing, or filing by mailing the lien to the Secretary of State’s office for posting within three (3) days of receipt. The state construction registry website will be accessible to the general public through the Secretary of State’s website.
Other significant changes pertain solely to residential projects. Under the new law, general contractors and remodelers (who have utilized or will utilize subcontractors or material suppliers) on residential projects, must post a “Notice of Commencement” to the online registry system within ten (10) days of commencement of work on the project. If the required Notice is not posted within the required time period, the general contractor/remodeler loses all rights to later file a mechanic’s lien.
Similar to the current statute, under the new law, subcontractors are still required to file preliminary notices. However, the notices must be posted to the online registry system.
Jodie C. McDougal, Esquire (jodiemcdougal@davisbrownlaw.com)
Elizabeth R. Meyer, Esquire
Davis Brown Law Firm (davisbrownlaw.com)
Tuesday, February 7, 2012
Lien Law Online eLert for 2/4/2012 - South Carolina
February 4, 2012
The South Carolina Court of Appeals recently upheld an arbitrator's decision allowing a contractor to amend his pleadings on the first day of a five-day arbitration, even where the change ultimately made him the "prevailing party" and entitled him to a fee award under S.C. Code §29-5-10. The homeowner challenged the late amendment because of the effect it had on the "prevailing party" analysis, but the court upheld the arbitrator’s discretion to allow the amendment. C-Sculptures, LLC v. Brown, 394 S.C. 519, 716 S.E.2d 678 (Ct. App. 2011).
C. Allen Gibson, Jr., Esquire (Contributing Author)
James E. Weatherholtz, Esquire (Contributing Author)
The South Carolina Court of Appeals recently upheld an arbitrator's decision allowing a contractor to amend his pleadings on the first day of a five-day arbitration, even where the change ultimately made him the "prevailing party" and entitled him to a fee award under S.C. Code §29-5-10. The homeowner challenged the late amendment because of the effect it had on the "prevailing party" analysis, but the court upheld the arbitrator’s discretion to allow the amendment. C-Sculptures, LLC v. Brown, 394 S.C. 519, 716 S.E.2d 678 (Ct. App. 2011).
C. Allen Gibson, Jr., Esquire (Contributing Author)
James E. Weatherholtz, Esquire (Contributing Author)
Friday, January 27, 2012
Lien Law Online eLert for 1/26/2012 - Washington
January 26, 2012
In a recent case, Williams v. Athletic Field, Inc., --- P.3d --- 2011 WL 4089927 (Wash. 2011), the Washington Supreme Court reversed a 2010 Washington Court of Appeals decision that found that in order for a Claim of Lien to be valid, it must contain a proper acknowledgement pursuant to Washington’s Real Property & Conveyance Act (RCW 64.08). The acknowledgement required under RCW 64.08 identifies specific language to be used and acknowledged by a notary, which varies depending on whether the claimant is an individual or a corporation. The decision of the Washington Supreme Court found that the form of lien provided in the lien statute itself (RCW 60.04.091(2)), although ambiguous, is sufficient to establish a valid Claim of Lien even if the document is not acknowledged pursuant to RCW 64.08.
The issue that the Washington Supreme Court resolved arose in the situation where a corporate claimant relies on the form of lien provided in the lien statute alone (relied on by most claimants), which does not satisfy the specific language requirements for acknowledgement under RCW 64.08. Nonetheless, 60.04.091(2) states, in relevant part, “a claim of lien substantially in the following form shall be sufficient.” However, RCW 60.04.091(2) also states, in relevant part, that the Claim of Lien “shall be acknowledged pursuant to RCW 60.08. The court recognized that the statute was ambiguous, as it could either be interpreted as 1) creating an exemption to the acknowledgement requirement, or 2) requiring the claimant to append a certificate of acknowledgment to comply with RCW 64.08. Given this ambiguity, the court liberally construed the statute as to allow the form of lien provided in RCW 60.04.091(2), standing alone, to be sufficient to establish a valid Claim of Lien.
Accordingly, the Washington Supreme Court’s decision establishes that corporations may rely on the Claim of Lien form provided by the lien statute. Although the decision did not specifically address whether the same rules apply to individuals filing a Claim of Lien, as RCW 64.08 has separate requirements for acknowledgement by individuals, it seems likely a court would use a similar analysis to validate the sample form in the context of individuals as well. This may be a question for another day, however, and prudent practice for individuals would be to follow the sample form provided by RCW 42.44.100(1) for purposes of acknowledgement, in addition to the sample form provided in the lien statute.
Jason R. Wandler, Esquire (Contributing Author)
Oles, Morrison, Rinker & Baker
In a recent case, Williams v. Athletic Field, Inc., --- P.3d --- 2011 WL 4089927 (Wash. 2011), the Washington Supreme Court reversed a 2010 Washington Court of Appeals decision that found that in order for a Claim of Lien to be valid, it must contain a proper acknowledgement pursuant to Washington’s Real Property & Conveyance Act (RCW 64.08). The acknowledgement required under RCW 64.08 identifies specific language to be used and acknowledged by a notary, which varies depending on whether the claimant is an individual or a corporation. The decision of the Washington Supreme Court found that the form of lien provided in the lien statute itself (RCW 60.04.091(2)), although ambiguous, is sufficient to establish a valid Claim of Lien even if the document is not acknowledged pursuant to RCW 64.08.
The issue that the Washington Supreme Court resolved arose in the situation where a corporate claimant relies on the form of lien provided in the lien statute alone (relied on by most claimants), which does not satisfy the specific language requirements for acknowledgement under RCW 64.08. Nonetheless, 60.04.091(2) states, in relevant part, “a claim of lien substantially in the following form shall be sufficient.” However, RCW 60.04.091(2) also states, in relevant part, that the Claim of Lien “shall be acknowledged pursuant to RCW 60.08. The court recognized that the statute was ambiguous, as it could either be interpreted as 1) creating an exemption to the acknowledgement requirement, or 2) requiring the claimant to append a certificate of acknowledgment to comply with RCW 64.08. Given this ambiguity, the court liberally construed the statute as to allow the form of lien provided in RCW 60.04.091(2), standing alone, to be sufficient to establish a valid Claim of Lien.
Accordingly, the Washington Supreme Court’s decision establishes that corporations may rely on the Claim of Lien form provided by the lien statute. Although the decision did not specifically address whether the same rules apply to individuals filing a Claim of Lien, as RCW 64.08 has separate requirements for acknowledgement by individuals, it seems likely a court would use a similar analysis to validate the sample form in the context of individuals as well. This may be a question for another day, however, and prudent practice for individuals would be to follow the sample form provided by RCW 42.44.100(1) for purposes of acknowledgement, in addition to the sample form provided in the lien statute.
Jason R. Wandler, Esquire (Contributing Author)
Oles, Morrison, Rinker & Baker
Wednesday, January 18, 2012
Lien Law Online eLert for 1/17/2012 - California
January 17, 2012
California’s legislature has revised California’ mechanics lien laws in an effort to modernize and simplify them. The majority of the changes are minor and are intended to be non-substantive, but there are a few key changes. These changes take effect on July 1, 2012. Below is a brief preview of the changes, which will be addressed in more detail in a revised California section of LienLawOnLine.
Much of the terminology regarding mechanics liens has changed. For example, under the new laws, “direct contractor” is used in place of the somewhat ambiguous “original contractor,” and is defined as “a contractor that has a direct contractual relationship with an owner.” Civ. Code § 8016. Similarly, “materialman” has been replaced with “material supplier.”
Under the new laws, all notice requirements have been standardized and relocated to a new subdivision. Civ. Code §§ 8100 – 8118. These sections govern the contents of notice, the manner of serving the notice, when notice is deemed complete, and proof of service.
The new laws create new waiver and release forms, which must be used. Civ. Code §§ 8120 – 8138.
The new laws make several changes with respect to completion. Under the new laws, “acceptance by the owner” is no longer included as a means of achieving completion. Civ. Code § 8180. Also owners will now have 15 days to record the Notice of Completion instead of the previous 10-day period. Civ. Code § 8182. Lastly, when there are multiple direct contractors, owners are now permitted to file separate Notices of Completion for each portion of the work. Civ. Code § 8186.
The new laws generally do not change the requirements of preliminary notice. However, under the new laws, direct contractors are required to give preliminary notice only to construction lenders. Civ. Code § 8200(e)(2).
Under Civil Code section 8424, mechanics lien release bonds are only required to be equal to 125% of the claim, rather than 150%, as they previously were.
The new laws provide a new procedure for judicially releasing liens, which was not previously included. Civ. Code § 8480. Included in these new procedures is a requirement that at least 10 days before petitioning for a release of lien the owner gives the claimant notice and demands a release of lien. Civ. Code § 8482. Additional new provisions include formal burden of proof requirements and the elimination of a cap on the recovery of attorney’s fees for petition for a release of lien. Civ. Code § 8488.
Deborah S. Ballati, Esquire (Contributing Author)
B. Scott Douglass, Esquire (Contributing Author)
Farella Braun & Martel, LLP
California’s legislature has revised California’ mechanics lien laws in an effort to modernize and simplify them. The majority of the changes are minor and are intended to be non-substantive, but there are a few key changes. These changes take effect on July 1, 2012. Below is a brief preview of the changes, which will be addressed in more detail in a revised California section of LienLawOnLine.
Much of the terminology regarding mechanics liens has changed. For example, under the new laws, “direct contractor” is used in place of the somewhat ambiguous “original contractor,” and is defined as “a contractor that has a direct contractual relationship with an owner.” Civ. Code § 8016. Similarly, “materialman” has been replaced with “material supplier.”
Under the new laws, all notice requirements have been standardized and relocated to a new subdivision. Civ. Code §§ 8100 – 8118. These sections govern the contents of notice, the manner of serving the notice, when notice is deemed complete, and proof of service.
The new laws create new waiver and release forms, which must be used. Civ. Code §§ 8120 – 8138.
The new laws make several changes with respect to completion. Under the new laws, “acceptance by the owner” is no longer included as a means of achieving completion. Civ. Code § 8180. Also owners will now have 15 days to record the Notice of Completion instead of the previous 10-day period. Civ. Code § 8182. Lastly, when there are multiple direct contractors, owners are now permitted to file separate Notices of Completion for each portion of the work. Civ. Code § 8186.
The new laws generally do not change the requirements of preliminary notice. However, under the new laws, direct contractors are required to give preliminary notice only to construction lenders. Civ. Code § 8200(e)(2).
Under Civil Code section 8424, mechanics lien release bonds are only required to be equal to 125% of the claim, rather than 150%, as they previously were.
The new laws provide a new procedure for judicially releasing liens, which was not previously included. Civ. Code § 8480. Included in these new procedures is a requirement that at least 10 days before petitioning for a release of lien the owner gives the claimant notice and demands a release of lien. Civ. Code § 8482. Additional new provisions include formal burden of proof requirements and the elimination of a cap on the recovery of attorney’s fees for petition for a release of lien. Civ. Code § 8488.
Deborah S. Ballati, Esquire (Contributing Author)
B. Scott Douglass, Esquire (Contributing Author)
Farella Braun & Martel, LLP
Wednesday, October 26, 2011
Lien Law Online eLert for 10/24/2011 - North Carolina
October 24, 2011
Effective October 1, 2011 reciprocal attorney’s fee provisions are enforceable in all NC commercial contracts. That would include ordinary construction contracts. It would also include ordinary commercial contracts in addition to the narrow category of “written evidence of indebtedness” (i.e., promissory notes) for which attorney’s fee provisions have been statutorily enforceable for years.
There are many differences of opinion about contractual attorney’s fee clauses and whether they are desirable. Legally, however, in NC where enforcement was desired, it was most likely unavailable because NC does not enforce a mere contractual attorney’s fee provision without underlying statutory authority. Arguments that ordinary construction or commercial contracts fell within existing statutory authority usually failed. This new statute, attached, provides that authority.
It remains to be seen whether or not attorney fees that are contractually enforceable can be included in a lien.
Steven D. Hedges, Esquire
Sparrow Wolf & Dennis, P.A.
Effective October 1, 2011 reciprocal attorney’s fee provisions are enforceable in all NC commercial contracts. That would include ordinary construction contracts. It would also include ordinary commercial contracts in addition to the narrow category of “written evidence of indebtedness” (i.e., promissory notes) for which attorney’s fee provisions have been statutorily enforceable for years.
There are many differences of opinion about contractual attorney’s fee clauses and whether they are desirable. Legally, however, in NC where enforcement was desired, it was most likely unavailable because NC does not enforce a mere contractual attorney’s fee provision without underlying statutory authority. Arguments that ordinary construction or commercial contracts fell within existing statutory authority usually failed. This new statute, attached, provides that authority.
It remains to be seen whether or not attorney fees that are contractually enforceable can be included in a lien.
Steven D. Hedges, Esquire
Sparrow Wolf & Dennis, P.A.
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