June 22, 2011
Massachusetts passed a law amending the mechanic’s lien statute, which takes effect on July 1, 2011, and provides architects, landscape architects, professional engineers, licensed site professionals and land surveyors (collectively referred to below as “design professionals”) who are licensed or registered in Massachusetts with the right to obtain mechanics liens for the value of professional services. The amendments to the law apply to liens for professional services, as defined by the statute, for which any person has filed or recorded a notice of contract on an interest in real property on or after the effective date of the amendments. The amendments however do not apply to any mortgage filed or recorded before the effective date of the amendments. Prior to the new law, most architectural and engineering services were not afforded mechanic lien protection.
The following is a brief summary of the steps necessary for design professionals to obtain a lien:
(1) Have a written contract with the owner, lessee, or any one operating with the consent of the owner or lessee.
(2) Execute a Notice of Contract in the statutory form (Mass. Gen. Laws Chapter 254, § 2C) and file or record it in the registry of deeds for the county or district where the land is located no later than the earliest of 60 days after filing or recording the Notice of Substantial Completion (Mass. Gen. Laws Chapter 254, § 2A) or 90 days after the 1st tier design professionals or anyone performing professional services under him, last performed such services.
(3) File or record a Statement of Account within 30 days after the last day that a Notice of Contract may be filed or recorded.
(4) File a civil action with a verified complaint to enforce the lien within 90 days after the filing or recording of the Statement of Account. An attested copy of the complaint must be filed and recorded in the registry of deeds for the county or district where the land is located within 30 days of the commencement of the action.
There are special requirements applicable to 2nd tier design professionals working for 1st tier design professionals, including:
(1) A 2nd tier design professionals working for a 1st tier design professionals who has the right to file a lien, may file its own lien if it has a written contract and if the owner approves the lower tier design professionals subcontract in writing.
(2) The 2nd tier design professionals must follow the general process outlined above except that it must use a different statutory form for the Notice of Contract (Mass. Gen. Laws Chapter 254, § 2D) and give actual notice of the filing to the owner.
(3) The lien is limited to the amount owed by the owner to the 1st tier design professionals as of the time the 2nd tier design professionals records its Notice of Contract.
There are also special requirements for mechanics liens of lower tier design professionals working for contractors or subcontractors:
(1) The lower tier design professionals working for a general contractor or subcontractor may file a lien if it has a written contract for that work.
(2) The lower tier design professionals must follow the same process outlined above but with the Notice of Contract form provided in Mass. Gen. Laws Chapter 254, §4. The notice must be filed by the earliest of (i) 60 days after the filing of the statutory Notice of Substantial Completion; (ii) 90 days after the filing of the Notice of Termination or (iii) 90 days after the last furnishing of materials by anyone working under the general contractor. The owner must receive actual notice of the filing of the Notice of Contract.
(3) The amount of the lien is limited to the amount owed by the owner to the contactor as of the time the design professionals record its Notice of Contract.
(4) Additionally design professionals who do not have direct contracts with general contractors must serve a Notice of Identification in the statutory form within 30 days of commencing work or the amount of the lien will be limited.
Notably, the statute provides a lower priority to design professionals’ liens than contractor, subcontractor, supplier, and labor liens. The restriction does not apply to liens of design professionals hired by contractors or subcontractors.
Terri L. Pastori, Esquire, tpastori@peabodyarnold.com (Contributing Author)
Robert M. McCall, Esquire, rmccall@peabodyarnold.com (Contributing Author)
Peabody & Arnold LLP, www.peabodyarnold.com
Monday, June 27, 2011
Tuesday, June 21, 2011
Lien Law Online eLert for 6/21/2011 - North Carolina
June 21, 2011
The North Carolina Bar Association submitted a proposed bill for introduction in the 2011 General Assembly session, developed by the NCBA’s Construction Section, and providing by revision and amendment of the statutory mechanics lien and bond laws for changes including the following:
• A notice of commencement, as currently used in several other states, to be filed by the project owner and serving to eliminate priority claims (so-called “hidden liens”) predating project commencement
• A notice to owner, to be served by subcontractors within 30 days of first furnishing as a prerequisite to perfecting a claim of lien and to avoid the effect of recent bankruptcy court decisions in NC disallowing post-petition perfection of liens
• Statutory and legally sufficient forms for partial and final lien waivers, avoiding the effect of a recent NC trial division decision construing a partial lien waiver to be a final lien waiver
• Retention of subrogated and direct-liability claims of lien against owners and retaining the claim of lien on funds
• A requirement that second and lower tiered bond claimants on public jobs provide the general contractor with a notice of subcontract as a prerequisite to a bond claim and to protect the GC against double payment liability
The bill was introduced as House Bill 489. After initial amendment, HB 489 was converted in its third version from the set of amendments and new provisions submitted by the NCBA into an act styled “An Act Authorizing The Legislative Research Commission To Study North Carolina's Mechanics' Lien And Bond Laws.” This study commission version was passed by the House and passed a first reading by the Senate. This is the current status of the proposed legislation. With the close of the current legislative session, further action on this bill is not anticipated this year.
Steven D. Hedges, Esquire (Contributing Author)
Sparrow Wolf & Dennis, P.A.
The North Carolina Bar Association submitted a proposed bill for introduction in the 2011 General Assembly session, developed by the NCBA’s Construction Section, and providing by revision and amendment of the statutory mechanics lien and bond laws for changes including the following:
• A notice of commencement, as currently used in several other states, to be filed by the project owner and serving to eliminate priority claims (so-called “hidden liens”) predating project commencement
• A notice to owner, to be served by subcontractors within 30 days of first furnishing as a prerequisite to perfecting a claim of lien and to avoid the effect of recent bankruptcy court decisions in NC disallowing post-petition perfection of liens
• Statutory and legally sufficient forms for partial and final lien waivers, avoiding the effect of a recent NC trial division decision construing a partial lien waiver to be a final lien waiver
• Retention of subrogated and direct-liability claims of lien against owners and retaining the claim of lien on funds
• A requirement that second and lower tiered bond claimants on public jobs provide the general contractor with a notice of subcontract as a prerequisite to a bond claim and to protect the GC against double payment liability
The bill was introduced as House Bill 489. After initial amendment, HB 489 was converted in its third version from the set of amendments and new provisions submitted by the NCBA into an act styled “An Act Authorizing The Legislative Research Commission To Study North Carolina's Mechanics' Lien And Bond Laws.” This study commission version was passed by the House and passed a first reading by the Senate. This is the current status of the proposed legislation. With the close of the current legislative session, further action on this bill is not anticipated this year.
Steven D. Hedges, Esquire (Contributing Author)
Sparrow Wolf & Dennis, P.A.
Subscribe to:
Posts (Atom)
