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To Lien or Not to Lien
 

To Lien or Not to Lien

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Information on liens and lien services.

Information on liens and lien services.

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    To Lien or Not to Lien To Lien or Not to Lien Presentation Transcript

    • TO LIEN OR NOT TO LIEN That is NOT The Question
    • PRIVATE PUBLIC – STATE AND LOCAL FEDERAL MECHANIC’S LIEN (Attaches to Work of Improvement STOP NOTICE (Stops the Construction Funds) STOP NOTICE (Stops the Construction Funds) PAYMENT BOND (Surety Co.) PAYMENT BOND (Surety Co.) MILLER ACT PAYMENT BOND (Surety Co.)
    • MECHANIC’S LIEN Definition
      • A mechanic’s lien is
      • - Involuntary
      • - Encumbrance
      • - Against Real Property
    • MECHANIC’S LIEN (Who Entitled)
      • All persons who, at the request of the Owner or Owner’s Agent Furnish Labor, Material, Leasing Equipment, Special Skills, or Other Necessary Services to a Project for Constructing a Work of Improvement
      • - Contractor
      • - Subcontractors of Every Tier
      • - Material Supplier to Contractor/Subcontractor
      • - Those Who Provide Labor
      • - Laborers
      • - Site Improvers
      • - Design Professionals
    • MECHANIC’S LIEN (Who Not Entitled)
        • Unlicensed Contractors or Subcontractors
        • Material Supplier to Material Supplier
        • Equipment Broker to Equipment Broker
        • Those Providing Merely Administrative Services
    • MECHANIC’S LIEN (WHEN)
      • IF NO NOTICE OF COMPLETION RECORDED
      • - 60 Days after Completion
      • Original Contractor – when in privity of contract with owner
      • - 90 Days – All others
      • IF NOTICE OF COMPLETION RECORDED
      • - 30 Days After Recording
      • FILE LAWSUIT
      • – 90 DAYS AFTER RECORDING MECHANIC’S LIEN
    • STOP NOTICE DEFINITION
      • A statutory remedy designed to reach unexpended construction funds in the owner’s or lender’s hands and is available on both private and public works
      • Private – Must Be Bonded or No Obligation of Lender to Withhold Funds
      • Public – No Bond Required
    • STOP NOTICE (Who Entitled)
      • All persons who, at the request of the Owner or Owner’s Agent Furnish Labor, Material, Leasing Equipment, Special Skills, or Other Necessary Services to a Project for Constructing a Work of Improvement
      • - Contractor
      • - Subcontractors of Every Tier
      • - Material Supplier to Contractor/Subcontractor
      • - Those Who Provide Labor
      • - Laborers
      • - Site Improvers
      • - Design Professionals
    • STOP NOTICE (Who Not Entitled)
        • Unlicensed Contractors or Subcontractors
        • Material Supplier to Material Supplier
        • Equipment Broker to Equipment Broker
        • Those Providing Merely Administrative Services
    • STOP NOTICE (Benefits Over Mechanic’s Lien)
      • - Immediate and direct charge on unexpended construction funds
      • - Is not affected by foreclosure on the property
      • - Bonded Stop Notice on Private Works– Recovery of Attorneys’ Fees
    • STOP NOTICE (When)
      • IF NO NOTICE OF COMPLETION RECORDED
      • - 60 Days after Completion
      • Original Contractor – contractor in privity of contract with owner
      • - 90 Days – All others
      • IF NOTICE OF COMPLETION RECORDED
      • - 30 Days After Recording
      • FILE LAWSUIT
      • – 90 Days After Last Day to File Stop Notice
    • PAYMENT BONDS (Definition)
      • “ Payment Bond” means a bond with good and sufficient sureties that is conditioned for the payment in full of the claims of all claimants and that also by its means is made to inure to the benefit of all claimants so as to give these persons a right of action to recover upon this bond in any suit brought to foreclose on the bond.
      • - Private Works of Improvement (Bonds are discretionary)
      • - Public Works of Improvement (Bonds are required for all projects in excess of $25,000
    • PAYMENT BOND (Who Entitled)
      • The only conditions of recovery on a statutory payment bond are that the claimant furnished labor, services, equipment, or material to the work of improvement and was not paid the full amount of the claim
    • MILLER ACT BOND (Federal Works of Improvement)
      • The Miller Act provides for payment of all persons supplying labor or material used in the work covered by the prime contract. All first- and second-tier subcontractors and suppliers can make a claim against the payment bond.
    • MILLER ACT PAYMENT BOND (What Constitutes A First- or Second-Tier Sub or Supplier)
      • - A subcontractor or supplier who has a direct contract with the contractor is a first-tier subcontractor or supplier and can recover
      • - A subcontractor or supplier in direct privity of contract with a first-tier subcontractor is a second-tier subcontractor or supplier and can recover
      • - Employees of a second-tier subcontractor are not protected
      • - Subcontractors or suppliers who have no privity of contract with the contractor or first-tier supplier cannot recover
    • MILLER ACT BOND (Work Covered)
      • The Miller Act states that labor and material must be furnished or supplied “in the prosecution of the work” designated in the prime contract.
      • Unlike a mechanics’ lien claimant, a Miller Act claimant is not required to prove that the labor or material was actually used in the work of improvement – only furnished “in the prosecution of the Work”
    • MILLER ACT BOND (Time Limits)
      • 90-Day Preliminary Notice
      • All potential claimants, except one in direct privity of contract with the general contractor, must give notice to the contractor within 90 days after the last labor or material has been furnished
      • Lawsuit
      • Must be brought no less than 90 days after the amount becomes due to claimant but no later than one year after claimant last performed labor or supplied material to the job site.
    • THE END
      • Thank you for attending today’s Webinar
      • I look forward to the next webinars which will address the mechanics’ lien, stop notice, payment bond, and Miller Act Bond on an individual basis