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Happy Holidays – Goodbye 2011, Hello 2012

On December 29, 2011 Author By Seth Smiley

The week between Christmas and New Years is typically a slow one for the legal and construction industries. Although, many projects rarely see breaks, this is a time when many companies take a look at the year that was, and reflect on all of the good, bad and ugly. Then look to the year that will be so that it can be made better than the last.

For most of us 2011 was a rebounding year or even a rebuilding year. The economy has leveled out (somewhat) and the public sector is pushing the construction industry forward. There is money starting to move in the private markets which will make way for projects into 2012.

I am optimistic for the year to come and feel like things are moving in the right direction for the construction industry. For those companies who have weathered the storm, hopefully good days lie ahead. For those who did not make it, there will be other opportunities where wise decisions will manifest from woeful past experience.

So from all of us here at the Wolfe Law Group we like to wish all of our clients, readers, followers, friends and family the happiest of holidays. Best of luck into the new year, may exciting times lie ahead.

Posted in:     From The Experts, Louisiana, Uncategorized  /    /   Leave a comment

What Costs / Labor To Include In Your Lien?

On February 15, 2009 Author By Scott Wolfe Jr

It’s been an interesting week on the web as it relates to mechanic’s liens, as I’ve run across a number of web posts about the types of services that can be included in a lien.

Let’s look at the matter theoretically.   Construction lien laws are normally drafted to protect contractors, who invest labor and expense into the improvement of a property.  However, since the laws also balance the property rights of persons or organizations, each state certainly does something to qualify what types of labor and expense can be represented in a lien, and which cannot.

The question here, therefore, is quite simple:   have you performed work or provided materials that can be the subject of a lien?

It’s one of the most important questions a contractor or supplier can ask when determining how to best collect on a non-paying account or project.   If you work does not qualify for a lien, for example, there is no need to even consider if notice is required and other lien filing requirements.

It’s important to consult the laws or your particular state to determine what type of materials and labor can be the subject of a lien, and which cannot.  However, two recently decided cases in Virginia and Kentucky are revealing of some general principals that are followed by most states.  The principal is essentially this:  you can only lien for labor and materials that actually go into improving the property.

What does this exclude?

In Virginia, Virginia Lawyers Weekly reports that a Hanover County Circuit Court invalidated a mechanic’s lien filed by a contractor that incurred costs in anticipation of construction of a steel building, but did not provide labor or materials actually employed in construction of the building.

The case is captioned Dallan Construction Co. v. Super Structures General Contractors, Inc, and can be downloaded here.

Similarly, in Kentucky, the Kentucky Court of Appeals held that “mowing, trimming, edging and street cleaning” did not “permanently improve the property,” and therefore, a mechanics lien was not allowed to be filed for the services provided.  That case is discussed at the South Carolina Community Association Law Blog, and is captioned Steeplechase Subdivision Homeowners Association, Inc. v. Thomas, Ky. Ct. App. 2008.

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Around the Web: Updates on Construction Law and Wolfe Law Group 2/16/09

On February 13, 2009 Author By Scott Wolfe Jr

This morning, we’re introducing a new feature to the Construction Law Monitor blog.    Each week, we’ll post interesting information about construction law from out there in the blogosphere, as well as some news updates from our Wolfe Law Rocks page. 

This week, we have a few articles related to the Employee Free Choice Act and potential labor law changes under President Obama that’s turning out to be a hot issue in the construction biz, commentary on the new stimulus bill, and in the spirit of valentine’s day, a sweet gesture by Wolfe Law Group.

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Thanks to Construction Law Musings for the Soapbox to Discuss the EFCA

On February 13, 2009 Author By Scott Wolfe Jr

This morning, Chris Hill graciously allowed me to publish a post on his Construction Law Musings blog about the Employee Free Choice Act. 

In the posts’ explanation of the Employee Free Choice Act and how it may impact the construction industry, I quote Dave Seitter of the Midwest Construction Law Blog from a very informative post on the act:

The untold implications of eliminating the secret ballot election are many, and are derived from the protections crafted under the NLRA over the last half-century. Most importantly, employees will be denied access to the normal pre-election debate that shapes informed decision-making, and employers will lose the opportunity to present an alternative point of view.

This radical change will also erode employees’ free choice. Importantly, there are currently no restrictions in the EFCA on the time period during which labor organizations can collect authorization cards. A union that collects a single card each week from a workforce totaling 200 employees could potentially acquire cards from the majority of the workforce over the course of two long years.

Read my post at Construction Law Musings by clicking here.   A big thank you to Chris Hill for giving us the opportunity to speak to his readers.

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Real Estate Agent Claims: Mechanic's Liens Can Mess Up A Real Estate Closing

On February 12, 2009 Author By Scott Wolfe Jr

Although situated in Texas, the “We Did It Again Group” sells and lists property and property insurance in all 50 states, and even internationally.  Last week, they posted an article on their blog titled “Mechanic’s Liens Can Mess Up A Real Estate Closing!”

The author is speaking to property owners who are interested in selling their property, wherein he discusses how a lien works and what effects it may have on someone interested in selling property.

Because of the way lien laws work in most states, the We Did It Again Group warns that a “homeowner may actually end up paying twice for the same work.”

The author of the blog post has a great explanation of what types of situations a homeowner may encounter if their property is liened and they want to move forward with a sale or refinance:

The theory is that the value of the property upon which the labor or materials have been bestowed has been increased by virtue of these efforts and the homeowner who has reaped this benefit is required in return to act as the ultimate guarantor of full payment to the persons responsible for this increase in value. In practice, a homeowner faced with a valid mechanics’ lien may be compelled to pay the lien claimant and then pursue conventional legal remedies against the contractor or subcontractor who initially failed to pay the lien claimant but who himself was paid by the homeowner. Another justification for this result relates to the relative financial strengths of the parties to a work of improvement. The law views the property owner as being in a better situation to absorb the financial setback occasioned by having to pay the amount of a valid mechanics’ lien, as opposed to a laborer or material man who is viewed as being less able to absorb the financial burdens occasioned by not being paid for services or materials provided in connection with a work of improvement.

Get more information by reading the blog post here.

What does this mean for contractors?   As we’ve said before, when used properly, a construction or mechanics lien can be a very powerful collections tool.  Learn more about how you can lien smarter with Express Lien.

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