Can I File A Mechanics Lien For This?

Lien laws vary from state-to-state, but across the country it’s a consistent principle that contractors and suppliers can only file mechanic’s liens for work they perform on a construction improvement project.

This begs the very important questions – what is a construction improvement project? And beyond that, what is a construction improvement?

With respect to Virginia’s law on the issue, the Virginia Real Estate, Land Use and Construction Law Blog just posted on this topic: The Line Between Furniture and Fixtures: What Constitutes An Improvement, Part II. The post quotes a recent federal civil case, Summit Community Bank v. Blue Ridge Shadows Hotel & Conference Center, LLC, whereby the judge distinguished between installed cabinets (which can be liened) and furniture delivered to the project (which cannot be liened) saying:

It is not sufficient for materials to simply add value to a building by their mere presence without any further connection to the building.

The law in Washington and Oregon is very similar to Virginia. In both of these states, claimants may lien for work they perform in the “improvement of real property” or work used “in the construction of any improvement.”

Louisiana’s lien law is a bit more unique in this regard, and perhaps the most unique in the nation. In Louisiana, claimants may file a lien whenever they perform services in connection with a “Work.” A “Work” is defined as follows by the statute (LA RS 9:4808):

A work is a single continuous project for the improvement, construction, erection, reconstruction, modification, repair, demolition, or other physical change of an immovable or its component parts.

I once represented a claimant in a Louisiana action against it to remove a mechanics lien, whereby I submitted a memorandum to the court distinguishing “work” (little w” from “Work” required by the statute (big w). I quoted the 1985 Louisiana Fourth Circuit case Lake Forest, Inc. v. Crilot Co., et al (466 So.2d 61) wherein a subcontractor’s lien against a property for excavation work related to the operation of a sand pit was challenged.

Interesting about this case is that there was no building or “improvement,” but the lien was found valid because the work was considered a “Work,” with the court explaining as follows:

Although “improvement” language is used in this general statement, La. R.S. 9:4808 contains a broader wording. The definition of “work” as “a single continuous project for the improvement…or other physical change of an immovable…” appears to apply to this unique sand pit operation.

We conclude that this sand pit…was designed to improve Lake Forest’s property. At the very least the operation was for the “modification…or other physical change of an immovable.”

Summary

Here is a short summary of this post. It’s important to know what is and what is not an “improvement” to determine whether you can in fact file a construction lien for the work or materials you provided. It’s also important to answer that question within the context of the laws applicable to your project. Most of the stuff is black & white…but in some cases, there can be a little gray.

This article was originally posted on Express Lien’s topic-specific Construction Lien Blog.

How to Collect on a NSF Check in Oregon

Two weeks ago, we posted an article on How To Collect on a NSF Check in Washington.  Today, we address the same issue under the laws of Oregon.

In the construction business, NSF checks are a fact of life.   And sometimes, the NSF checks may cause big problems because they’re written in amounts that exceed $10,000, $50,000 or $100,000.

In Oregon, like in Washington, those who draft NSF checks have a specific window of time to make payment on the check amount, or be subjected to statutory penalties and their adversaries litigation costs.

I just published a Legal Guide on Avvo that gives step by step instructions to folks on how to collect against a NSF check.   Unlike many states, like Washington and Louisiana, that requires the use of particular forms and language, the Oregon statutes are very bland in their requirements.   To charge interest, penalties and legal expenses on a party who writes a hot check in Oregon, the recieving party need only send a written notice of the NSF check.   There’s no requirements as to the form of the notice, or how the notice should be sent.

Although, of course, we have our recommendations.

In sending the notice, you should send it through some service that allows your company to track its mailing and delivery.   In writing the notice, be certain that you identify the check in question, and indicate that if the check isn’t paid within 30 days, you’ll seek interest, penalties, attorneys fees and other costs allowed by the Oregon statutes.

This article was originally posted on Wolfe Law Group’s topic-specific Northwest Construction Law Blog.

How To Collect NSF Checks in Washington, Oregon and Louisiana

In today’s economy, NSF checks are becoming a fact of life for those in the construction industry.   When it comes to your company’s collections problems, however, receipt of NSF checks may not be all that bad.

That’s because nearly every state imposes stiff penalties against those who pass hot checks.   What type of penalties you ask?   If you’re forced to collect on an NSF check, you’ll likely be entitled to attorneys fees, legal costs and interest, and that’s in addition to statutory liquidated damages that can be as stiff as double the amount of the check.

In all the states where I practice (Oregon, Washington & Louisiana), there exists powerful statutes designed to deter bad checks.  If you receive a NSF check, it’s important you follow the procedures of these statutes to ensure you will qualify for the penalties.

Over the past few days, I’ve been contacted by folks about NSF check collections a bit more than usual, and so I spent some time over the weekend drafting short and understandable step-by-step guides on how to collect on a NSF check in these three states.

We published them as Legal Guides over at Avvo.com.   Take a look at them here:

How to Collect on NSF Check in Louisiana

How to Collect on NSF Check in Washington

Portland's Progressive Eco-Roof Program

The Oregon Daily Journal of Commerce just reported about a mixed-use project in Portland (The Beacon) installing an eco-roof to circumvent height restrictions on high-rise buildings in the city.   According to the report, Portland’s Bureau of Planning and Sustainability allows builders to increase its floor area over the city maximums by 3 square feet for every square foot of eco-roof. The Beacon’s eco-roof provides it with an approximate extra 45 feet of height.

While the DJC article focuses on an eco-roof as a solution for builders wanting to build higher, it hints at the bigger picture for Oregon developers and builders:  Portland’s very progressive Eco-Roof program.

The increase in building height is just one of the many incentives Portland provides for installing an eco-roof.

What The Heck Is An Eco-Roof?

An “eco-roof” is another word for a “green roof,” which is defined by Wikipedia as a roof “that is partially or completely covered with vegetation and soil, or a growing medium, planted over a waterproofing membrane…[that] may also include additional layers such as a root barrier and drainage and irrigation systems.”  The website for Portland’s Eco-Roof Program describes it as a “living, breathing vegetated roof system.”

It’s like a garden on the roof, and it has a lot of positive features for the environment and the energy consumption of the building (i.e. stormwater control, better insulates the building to lower energy costs, etc.).   The Portland Bureau of Environmental Services published this Eco-roof Fact Sheet explaining the benefits of a Eco-Roof.

Available Incentives in Portland

Portland leads the country in providing incentives to builders and developers to incorporate eco-roofs into their projects.

As seen in the DJC article, a developer / builder can circumvent building height restrictions by installing an eco-roof.    Another incentive for builders and developers to invest in eco-roofs is that the Portland Eco-Roof Program will fund up to $5 per square foot of an eco-roof project.   With installation costs of eco-roofs ranging between $5 and $20 per square foot, this incentive can be up from 25% – 100% of the roof’s cost.

How to Apply

Those interested in the incentive cash must apply through the Portland Bureau of Environmental Services, through the Portland Grey to Green program.  Applications are accepted and reviewed twice annually, and the application process just closed for the last time in 2009 (December 1st 2009).  However, applications can be submitted against starting in April 2010, and will be reviewed in June.

Qualifications to apply include:

• The project is within the Portland city limits.
• The project manages stormwater.
• The project has a designated project manager.
• Construction will start within two years of being approved for an incentive.
• Funding can be secured within two years.
• The project is feasible and buildable.
• The ecoroof must not be complete on or before December 1, 2009.
• The project must agree with and satisfy the city’s contact agreement requirements to receive funding.

How to Learn More

You can learn more easily online, as Portland has published a number of web pages explaining this program:

• Grey to Green Program
• Portland Environmental Services
• Portland’s Official Eco-Roof Blog
• Eco-Roof Page at Portland’s Bureau of Environmental Services

Additionally, the city of Portland is sponsoring Ecoroof Portland, a conference offering folks a chance to learn about the alternative roofing process on March 12-13, 2010.

This article was originally posted on Wolfe Law Group’s topic-specific Northwest Green Building Law Blog.

Avvo Legal Guides on Oregon and Louisiana Liens Published

Want a step-by-step guide on how to file construction or mechanic liens in Louisiana or Oregon?   Your call has been answered this weekend with the publication of Avvo Legal Guides on both these subjects, which you can view here:

How to File a Construction Lien in Oregon

How to File a Construction Lien in Louisiana

These two legal guides offer plain english explanations on how to prepare and file a construction lien in either of these states.

The two above-listed legal guides were written and published by Scott Wolfe Jr., the founding attorney of Wolfe Law Group.  He previously published a similar legal article on Avvo.com about filing construction liens in Washington, which you can read here.

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.