Category: Liens

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Stoel Rives’ Construction & Design Group Selected for Practical Law Publication on Construction Lien Claims

Practical Law, a Thomson Reuters Company and division of West Publishing Corporation that produces online resources for attorneys across myriad legal topics, recently invited members of the Construction & Design Group of Stoel Rives’ Portland and Seattle offices to provide construction lien resources for Oregon and Washington.  According to Kate Kruk, Practical Law’s Content Acquisition … Continue Reading

Calling All Owners and Contractors! Pay Attention to Disclosure Statement Requirement to Protect Against or Preserve Lien Claims in Washington

Lurking in the depths of the Contractor Registration Act (Chapter 18.27 RCW) is an important statute that has the potential to eviscerate lien rights if not satisfied by contractors furnishing improvements on certain projects in Washington. RCW 18.27.114 requires that contractors working on residential projects or commercial projects of limited scope furnish a Model Disclosure … Continue Reading

Yes, Contractor Licensing May Be Required Under California Law Even if the Contractor Does Not Physically Build Anything Itself

It seems that almost weekly, and certainly monthly, I receive a call or inquiry from colleagues and/or prospective clients as to whether a license is really required if the prospective “contractor” is not actually building anything but is merely facilitating a “deal” or is hiring otherwise qualified and licensed contractors and trades. Virtually every time … Continue Reading

Key Aspects of Joint Check Agreements

Joint checks are a useful tool in the construction industry to give owners and prime contractors peace of mind that lower-tier subcontractors or suppliers are being paid and potential lien claims are avoided.  But joint check agreements and the subsequent actions can result in unintended consequences and liability. In my recent article for the Daily … Continue Reading

Contract Conflict Bears a Cautionary Tale

In the haste to get design and construction moving on real estate projects, one may lose sight of important lien priority issues when negotiating and executing contracts. In my recent article for the Daily Journal of Commerce, I discuss a notable Washington appellate case that addresses a lien priority issue in the context of multiple … Continue Reading

Lien Rights of Employee Benefit Plans Clarified in Washington

A question left open in Stoel Rives’ recent Washington lien law treatise relates to the lien rights of employee benefit plans. The rights granted in RCW 60.04.011(4) (where benefit plans are included in the definition of “furnishing labor”) were called into question by two Washington Supreme Court decisions barring employee benefit plans from pursuing lien-like … Continue Reading

Idaho Verifies That Priority Position Remains Relevant After Bond Posting

In a case of first impression in Idaho, the Supreme Court in American Bank v. Wadsworth Golf Construction Co. of Southwest, No. 39415 (Idaho Aug. 16, 2013) (slip op.), determined that priority of lien filings on a property remain subject to a lien priority analysis even after a statutory lien release bond is filed to … Continue Reading

Should Design Professionals in Washington File a Pre-Claim Notice to Protect Lien Rights? Yes!

Washington’s lien laws, like those of other states, set forth pre-claim notice requirements that, if not satisfied, may result in the forfeiture of lien rights. The applicable statute, RCW 60.04.031, presents an interesting array of “if-then” scenarios in which the notice requirements are imposed. Generally, unless falling under one of three exempted categories, RCW 60.04.031 … Continue Reading

Contracting For Construction In Oregon? You Need to Know the Law

In my latest Daily Journal of Commerce Construction column, I discuss the need to know Oregon construction contracting law to avoid unwanted consequences. In Oregon, construction contracts are subject to a wide variety of legal requirements, many of which are often ignored or, in some cases, violated with disastrous results. Following link will provide a summary … Continue Reading

A Valid Contract Limits the Amount of a Mechanic’s Lien, Even Against a Party with No Direct Contract with a Contractor

A California appellate court recently held that the value of an original construction contract is admissible as evidence to limit a contractor’s right to recovery under Civil Code section 3123(a), even by a property buyer that was not a party to the construction contract. Appel v. Los Angeles Superior Court (CA No. B244590, Mar. 11, 2013). The … Continue Reading

Nevada Lenders Beware! Mechanic’s Liens Not Easily Avoided

Following the market crash in 2008-09, the $2.8 billion Fontainebleau development in Las Vegas was halted with 70 percent of the construction completed. Naturally, numerous mechanic’s liens were filed by contractors, subcontractors, professionals and suppliers ("claimants"). In the bankruptcy proceeding, the lenders asserted novel and potentially legally destabilizing theories against the claimants’ rights: a.) the … Continue Reading

Five Tips for Defending a Lien Claim

Lien claims can be an unfortunate reality of even the best-laid development plans. Owners or developers facing a lien claim can be held liable to lenders, landlords or investors for liens filed on project property if they are not careful. When faced with lien claims, I recommend that owners and developers ask five questions: Is … Continue Reading

Starting a New Project? Don’t Forget to Send a Notice of Right to a Lien to Trust Deed Holders and Mortgagees

Under Oregon law, a construction lien generally has priority over a trust deed or mortgage on an improvement.  ORS 87.025(1).  If a construction lien claimant has priority over a trust deed or mortgage, the construction lien claimant will get paid from the proceeds of a foreclosure sale before the trust deed holder or mortgagee.  Having … Continue Reading

California Appellate Court Affirms That Mechanic’s Lien Foreclosure Period Is Tolled During Bankruptcy Proceeding

In Pioneer Construction, Inc. v. Global Investment Corp. (Dec. 21, 2011, No. B225685), Cal.App.4th [2011 WL 6382113], the Second District Court of Appeal recently affirmed a timely topic in this depressed construction market:  lien claimants must protect their rights, and buyers of property out of bankruptcy must verify the validity of lingering lien claims. In … Continue Reading
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