Construction Liens

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In my latest Daily Journal of Commerce Construction column, I discuss the stop notice remedy. When a subcontractor or supplier goes unpaid on a private project, one possible remedy is to file a lien against the land or improvements. The lien remedy has its limits, however. If you start work after the project has gotten…

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…

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…

In Williams v. Athletic Field, Inc., 155 Wn. App. 434 (2010), the Washington Court of Appeals ruled that a lien filing was invalid because it was not properly acknowledged. This decision created a stir among Washington construction lawyers, because the lien claimant had used a lien filing service which in turn had used a form…

Four Practical Points for Avoiding and Responding to Construction Liens

Step 1: Who’s healthy in 2010?

Within the bounds of the Fair Credit and Reporting Act and any state obligations, it is imperative for both owners and general contractors to understand the financial fortitude of the parties doing the work. If you don’t obtain the…

Your project is coming along fine, despite the economy. You’ve weathered the squalls of bids, design changes, agency approval, and credit (mercifully), and now even construction completion is looking good. You can see the finish line through the haze on the horizon, and you’re fairly pleased with how you have pulled everything together with what…

It is well known that public property is not lienable in most states, including Washington. However, it has been generally assumed that under Washington’s mechanic’s lien statute (RCW 60.04), improvements constructed on public property are lienable. In Estate of Haselwood v. Bremerton Ice Arena, Inc., No. 80411-7 (June 25, 2009) the Supreme Court of Washington…

Developer insolvencies are unfortunately becoming more and more common in our current economic climate and often result in partially completed projects being stopped. The consequences to contractors can be significant. A number of recent resort projects illustrate what the contractors and subs can typically expect.

First, the obvious, immediate problem is nonpayment, which in turn requires the…

While the technical requirements for preparing and filing liens offer countless opportunities for mistakes, two in particular seem to predominate. The first is the failure to properly calculate the 75-day period for filing the lien. The 75-day period begins to run from the earlier of (i) the day the contractor or supplier ceased to provide…