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