Posts Tagged ‘Construction Lien Blog’

California Lien Law In For A Change…

Over the past few years the California Legislature has been tinkering with its construction lien laws, both public an private. There have been numerous write-ups with commentators chiming in on whether the changes are a good thing or a bad thing. Nevertheless, many have happened and more changes are set to come shortly.

As of July 1, 2012 the governing statutes will be assigned to new numbers and a new section of the California Civil Code. Jones Day did a very comprehensive article back in January of this year outlining the changes. Here is an excerpt from the article of how the code articles are going to be changed in numbering:

“Effective July 1, 2012, the existing Mechanics Lien Law (commencing with Section 3082 of the Civil Code) will be repealed and replaced with new provisions in three titles relating to: (i) works of improvement generally (commencing with Civil Code Section 8000); (ii) private works of improvement (commencing with Civil Code Section 8170); and (iii) public works of improvement (commencing with Civil Code Section 9100).” See the full article here.

This is a big deal for contractors, lawyers and document preparation companies because the entire landscape is changing. Even if the substance of the law is the same, lawyers will tell you that words and punctuation can be very costly when left up to new interpretation.

More recently another construction law blog gave a more brief version of the new changes that have gone into and will be going into effect. Mark Budwig of Government Contracts Advisor posted these in his March 2, 2012 post.

The key here is not to panic but to embrace the changes and be the savvy contractor who knows about the changes and does not get rattled. Another important factor is to outsource trivial knowledge like this to trusted sources like an attorney or a more efficient service such as Zlien.com.

Posted in:     California, Construction News, Filing Requirements, Law Changes & Updates, Mechanics Lien  /  Tags: , , , , , ,   /   2 Comments

Construction Lien Removal Suit in Louisiana

Attention all home owners or property owners, there is only one surefire way to have that annoying illegal lien (in Louisiana called a statement of claim and privilege) removed from the title of your property, a Mandamus action. In Louisiana and other states, a Mandamus can be used for a number of things (listed out in La R.S. §44:114) and it is a summary proceeding, meaning that it should go faster than ordinary litigation.

The Louisiana Private Works Act codified in La. R.S. §9:4801 et seq., is the origin of the rules which govern construction liens for private projects in this state. The specific statue that allows for an individual to request a Court to order the Clerk of Court to cancel a lien is La. R.S. §9:4833. The statute reads in pertinent part:

If a statement of claim or privilege is improperly filed or if the claim or privilege preserved by the filing of a statement of claim or privilege is extinguished, an owner or other interested person may require the person who has filed a statement of the claim or privilege to give a written request for cancellation in the manner provided by law directing the recorder of mortgages to cancel the statement of claim or privilege from his records.” La. R.S. §9:4833(A).

The best part about this statute is that if all of the proper notice requirements are followed and the illegal lien is not removed from the mortgage records by other means than this Mandamus proceeding, the property owner who brings the Mandamus suit is entitled to attorney fees and costs. This is huge because, this type of proceeding can cost a homeowner thousands just in legal fees. Here at Wolfe Law Group, we charge a flat rate of $3,500 for this type of proceeding, which covers all things from notices, to the actual Mandamus suit, to the trial.

Liens can be very technical and there are many instances where the letter of the law is not followed. In those instances, an owner can have the lien removed and even against the will of the party who filed the lien. As a contractor, filing a lien is very important to preserve rights against parties it did not contract with who may be liable for payment. Here at Wolfe Law Group we file liens all the time, but if your are like most contractors, funds are short and hiring an attorney can be too costly. Companies like Zlien.com are excellent resources for all things related to liens. Fortunately for lawyers and unfortunately for services like Zlien.com, enforcement of a lien and/or a Mandamus suit for removal of an illegal lien can only be filed by an attorney (or individual if self represented). I recently posted a Petition for Mandamus recently drafted and filed by Wolfe Law Group on JDSupra.com.

Bottom line: owners should file suit to have illegal liens removed from the mortgage records. If not then selling or refinancing the property will be impossible with the cloudy title. If you file suit and receive a judgment then you will be entitled to attorney fees and costs, which are provided by statute.

Posted in:     About Our Services, Construction News, Damages, Dispute A Lien, Litigation, Louisiana, Mechanics Lien  /  Tags: , , , , , , , , , ,   /   1 Comment

Mechanics Lien Infographic

The Construction Lien Blog (published by me!) yesterday posted a neat infographic focused on the mechanics lien. There are lots of infographics out there, but very few focused on legal issues. The mechanic lien laws, however, actually made a great subject for such visualized data, and I invite you to take a look at it over on our blog or below.

The infographic was inspired by awesome infographics used in other industries. The mechanics lien infographic visualizes the mechanics lien laws, and also presents some data from a survey Zlien conducted of mechanics lien claimants who filed liens in 2011.

Here it is:

Mechanics Lien Infographic

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

Louisiana Suppliers – Extra Notice Needed for Lien Rights

Over the past holiday season, I was at a Christmas party discussing with a friend of mine who runs an electrical supply company here in South Louisiana, the intricacies of notice provisions before a company like his can file a lien on a private project. Others party-goers probably thought our conversation boring, but we were intrigued. This conversation got me thinking that I should report to the supply world what my friend did not understand…

Here at the Wolfe Law Group we love liens. We file them for clients and recommend them to all others out there as a tool to preserve rights if, and often when, funds dry up and you are not paid on a construction project. Part of the privileged class under the Louisiana Private Works Act (La R.S. 9:4801 et al), are suppliers.

There are two types of suppliers protected under this act. Suppliers who lease equipment to contractors (“Lessors”) and suppliers who provide the materials to be used in the project (“Suppliers”).

EQUIPMENT RENTAL (see La R.S. Art. 9:4802(G)(1))

For Lessors, these companies need to deliver a copy of the lease agreement to the property owner and contractor within ten (10) days of when the leased equipment is delivered to the site. This notice is required as in most states to put all relevant parties on notice of potential future claims. So for companies who deliver equipment to job-sites as a rental, it is PARAMOUNT that you send out this notice so that you can file a valid lien after not getting paid. Then with your properly filed lien you can go after the party you have a lease agreement with and the property owner, general contractor and as a last resort you can foreclose on the property! Very strong rights indeed.

MATERIAL SUPPLIERS (see La R.S. Art. 9:4802(G)(2-3))

Next, for supply houses, such as plumbing materials, and electrical supplies – these companies also need to send out a notice to the property owner and the general contractor after delivery of goods. The Supplier needs to send notice of non-payment to the owner at least ten (10) days before filing a lien. Notice needs to be sent by certified mail return receipt and needs to have the name, address of the Supplier, description of materials provided, description of the property and the total amount owed, plus interest and fees. Also the Supplier needs to put the hiring party, general contractor and owner on notice of the items list above within seventy-five (75) days of the last month that the materials were delivered to the project via certified mail return receipt – or no later that then lien period. Strategically it may be best to send out one notice after the goods are delivered to all the parties above with the required information, just to preserve the right to file your lien.

These notice provisions can be tedious and if not followed to the letter of the law, will result in an invalid lien. The notice practice should become a staple in the administration of the aforementioned types of companies.  My office constantly invalidates liens that were not filed correctly. We also file a number of notices and liens which are filed correctly. General contractors and owners pay lien holders typically first because of the added security.

Bottom line – all of the successful rental and supply companies have these notice mechanisms in place. If you are a company who plans on competing in this arena, then following notice laws is always a smart plan.

Other resources on the topic: Zlien.com, reasestatelawyers.com, levy-law.com,

Posted in:     Construction News, Filing Requirements, Louisiana, Mechanics Lien  /  Tags: , , , , , , ,   /   Leave a comment

Scott Wolfe Quoted in New Orleans City Business Article About Delays When Paying Subcontractors

Scott Wolfe Jr. Construction LawyerSubcontractor non-payment is something very familiar to me. It’s been written about here on the Construction Law Monitor (especially with regard to how pay when paid clauses affect subcontractor payments), and it’s something my other blog (the Construction Lien Blog) focuses on exclusively in its discussion of mechanic liens.

So it’s no surprise that New Orleans City Business magazine contacted me to discuss how the law can help and hurt subcontractors who are frustrated when waiting for payments to trickle down from the owner.  The article can be found on City Business’ website (subscription required) here:  Subcontractors grow tired of waiting on delayed job payments.

The article’s author, Ben Myers, does a great job of capturing the friction between general contractors and subcontractors on the subject of payment. General contractors complain that getting payment can be complex and time consuming because that’s how money trickles through, and that subcontractors should be taking the risk for their portions of the work.  Subcontractors complain that they are bullied around and “pay when paid” provisions sometimes leave them drowning because of problems the general has completely unrelated to their work.

It’s a real complicated mess – and the article gets both sides on the subject and helps explain the complications.

Posted in:     Around The Web, Payment Requirements  /  Tags: , , , , , ,   /   Leave a comment