Posts Tagged ‘All States’

An Owner’s Perspective on Liens

We frequently post about construction liens from a contractor’s perspective – who are clearly interested in figuring out ways to qualify for the filing of a lien.

What we rarely comment upon is an owner’s perspective, who are concerned with the opposite:  figuring out ways to condemn a lien as improperly filed.

It’s important for those who usually file mechanic’s liens to step back and consider the opposing viewpoint.   There is some value in understanding that upon receipt of a lien, an owner’s will likely have the instinct of wanting to fight it as improper or unfair.

When lien laws are drafted, they are drafted with protection for property owners in mind.  And when contractor boards and other regulatory agencies commit time to lien laws, they are usually focusing on educating the public (i.e. property owners) on what they can do to prevent liens.

A December 2008 article from the Daily Journal of Commerce in Portland, Oregon, stands as an example of this.  In the article titled “Five Questions to Ask About Liens,” the author goes through five questions owners should ask when faced with mechanic’s liens to determine their rights on proceeding forward.

This is not a rare example.   To the contrary, regulatory agencies across the nation who regulate contractors focus a great deal of effort on helping owners understand and overcome improperly filed construction liens.  See the page for Department of Labor & Industries in Washington, or the Contractors State Licensing Board in California.

If your company does wind up filing an improper mechanic’s lien and its disputed by the property owner, a loss in court could require your company to pay penalties, attorneys fees and more.

The point?   It’s important to understand the lien laws in your jurisdiction, and avoid making common errors and mistakes.

Andrea Goldman, a construction attorney in Massachusetts, publishes a great blog about this very issue titled:  Home Contractor v. Homeowner.  She frequently posts on issues that surface in home construction between the property owner and contract that results in litigation or arbitration.

With all of the work across the nation from regulatory agencies attempting to stifle improperly filed mechanics liens, Andrea notes in her blog that mechanic’s liens are so powerful of a collection tool for contractors that even an improperly filed lien can yield non-payment.

In her post the “Strength of Mechanic’s Liens,” Andrea states as follows:

Even if the lien is not done properly, one still has to file an action in court to dissolve it, which requires paying legal fees that are frequently not recoverable.

And regardless of your position on the subject (as a property owner, contractor or regulatory board), and regardless of how right or wrong your position may be, Andrea’s point is clear.   Mechanic’s liens are powerful instruments, and even when they are filed with technical defects, they cause parties to consider the debtor’s claim and contemplate a resolution.

Posted in:     Mechanics Lien  /  Tags: , , , , , , , , , , ,   /   Leave a comment

Caution: Lien Laws in are Hyper-Technical

In most states, the liens laws are hyper-technical.   This means that the laws have many requirements, and that courts strictly construe the rules against the party filing construction liens.

This is true for nearly every state.

While laws across the nation provide lien rights to those in the construction industry, because of the power of these instruments most states require that the liens be filed in exact accordance with the law to be valid.

This is especially the case with regard to the required contents of a lien.

Each state has different requirements for what must be stated within a mechanic’s lien, and how that information must be stated.

Every state, for example, will require the claimant to identify the property being liened.  In Louisiana, Washington, and Virginia, however, the law requires that the lien use the legal property description and not simply a municipal address.   The proper identification of property can be so important we’ve written an entire blog post about it here.

In Virginia, the laws are even stricter.   Because the Virginia lien law is land record based, the claimant is expected to perform a complete title search to acquire the exact legal owner and legal property description.   A lien that does not lien the exact owner, at the exact property for the exact amount due, can be deemed invalid by courts.

Zlien does this leg work for your company, helping your company properly prepare these important legal forms.   Our professional legal document preparers are familiar with the lien and notice forms in your state, and can help your company Lien Smarter.

Posted in:     Louisiana, Mechanics Lien, Washington  /  Tags: , , , , , , , , , , ,   /   1 Comment

Will the 2009 Economy Create More Mechanic Lien Filings?

At the Construction Lien Blog, we’ve written about the current state of the economy in America, and how this has affected the construction industry from coast-to-coast.

However, there is recent conversation in the media and out in the blog-o-sphere that the economy’s impact on construction has increased the amount of mechanic’s liens filed by contractors.

The Pacific Business News source in St. Louis, for example, has a story on a construction attorney in Missouri who says that he filed twice as many liens in 2008 as he did in 2007.

A similar article appears in the Virginia Lawyers Weekly, which reports that construction litigation in general is increasing in the current economy, with increased claims for construction delays, defects and problems with collections.

It seems that the business journals are full of stories about construction projects being slammed with liens, like the story here and here.

As the new year approaches, what will we see in the construction industry that is predicted to remain pretty stagnet?

One thing is for sure, regardless of whether lien filings increase, decrease or stay the same, with the current credit crunch and economic woes, it’s more important than ever to file liens on claims you do have, and to do it timely and properly.

Posted in:     Construction News  /  Tags: , , , , ,   /   9 Comments

Be Careful When Using Free Legal Forms

Gerard Simington with “FindAnAttorneyForMe.com” published an informative article that warns businesses about using free legal forms found on the internet.

The Internet has placed legal information and legal forms at our fingertips – and its easy to forget sometimes that the law is a very complicated subject, and legal forms are no exception.  While a legal form may seem simple on its face, the blanks can carry significant legal consequences.

It’s always great to hire an attorney to draft legal documents from scratch, or to “tweak” legal forms to fit your particular need.   The costs associated with legal counsel, however, are simply sometimes out of your business’ reach.

Legal Document preparation services like Express Lien are perfect for these situations.  Our staffs of professionals are familiar with the forms that relate to your construction project, and we can help you draft & file your forms properly and avoid costly mistakes.

Posted in:     Construction News  /  Tags: , , , , , , , , , , , , , ,   /   1 Comment

Identifying Property in a Mechanics Lien

This article originally appeared at Wolfe Law Group’s blog, http://www.wolfelaw.com, and is reproduced here with permission.

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When filing a mechanic’s lien on a construction project, it is of course critical to identify the property within your lien. While a seemingly simple task, the laws in nearly every state are very specific about how property is identified…and the consequences of small mistakes can be fatal.

In most states, for example, the statutes and case law governing private construction liens clearly require a “property description” that is more specific than a municipal address. While the law does not explicitly require a “legal property description,” it is clear from the court’s interpretation of the laws that a legal property description is sufficient and a municipal address is not.

Since courts are typically not reluctant to dismiss a lien when simple formalities – such as the property description – are overlooked, to ensure your lien’s validity a legal property description should be used.

What Is A Legal Property Description?
Perhaps the best way to explain legal property descriptions is to demonstrate what it is not; A legal property description is not a simple address.

Accordingly, if you put something like this on your lien to identify a property, your lien is likely invalid:

123 Main Street
Seattle, WA 98134

If you were given a legal property description and a driving map, you’d probably have a very difficult time finding the property. This is because legal property descriptions typically speak in the language of county recorder offices, and not in the common directional parlance of everyday life. A legal property description looks less like the above and more like this:

Subdivision: Breatheway
Range: 105
Lot: 66
County: King
Square: 4-A

Want the technical definition?

A legal description (also referred to as land description, property description or land boundary description) is “a written statement recognized by law as to the definite location of a track of land by reference to a survey, recorded map or adjoining property.”

How To Get the Legal Property Description

In many construction contracts (including AIA contracts), the contracting party in the higher tier is responsible for providing the legal property description to the lower tier party upon request. While very infrequently employed, most contractors have the right to make a simple RFI and acquire this valuable information.

It is sometimes better to make this RFI before work begins, as you’ll be less likely to get a party’s cooperation after a dispute arises. And since there are strict time limitations as to when you can and cannot lien, it is valuable to have this information at hand while things are smooth.

If you do not have the ability to request this as per your contract, or if you’re unable to get the information for practical reasons, there are of course other ways to acquire a legal property description, including:

  • Go to the county records office, and pull the Act of Sale for the property. This document will likely have the property description within.
  • Use a service to acquire the legal property description. There are many online services such as www.HomeInfoMax.com. If you are filing a construction lien, companies like Zlien.com will draft the lien and acquire the legal property description for you.
  • An attorney may have access to county or parish records to acquire this information.

Common Mistakes and Problems

Sometimes, finding a legal property description can be very difficult.

Depending on your location, the records of the county or parish may or may not be complete or easy to use. If your address is in an area that has been recently subdivided or sold, the legal property description might be “up in the air” or otherwise difficult to obtain. Finally, property on corners or with multiple addresses may be difficult to find.

In our experience, we’ve even encountered instances when the municipal address used by a property owner is not the actual or correct address of the property, and as such, not likely to lead you to a correct legal property description.

In short, you should be careful when acquiring a legal property description as there are many tricks to the trade and many pitfalls for the unwary. Legal property descriptions are very precise, and very fickle. Since the stakes are high (the validity or invalidity of your construction lien), pay close attention as to how you describe the liened property.

Posted in:     Mechanics Lien  /  Tags: , , , , ,   /   3 Comments