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Washington Lien Law
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Helpful information on the Washington lien law.

Helpful information on the Washington lien law.

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  • 1. Washington Construction Law William G. Fig [email_address] SUSSMAN SHANK LLP | (503) 227-1111 | www.sussmanshank.com | © 2004
  • 2. Overview
    • What Is A Construction Lien
      • Against Whom Do You Have A Legal Right To Recover?
      • What Are You Entitled To Recover?
    • Prerequisites To Filing A Construction Lien
    • How And When To Properly File A Construction Lien
    • How To Properly Foreclose A Construction Lien
    • Priorities
    • Summary Of Critical Deadlines
    • Other Methods To Help Secure Payment (Notice to Lender; Miller Act; Retainage Claims)
    1 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 3. What Is A Construction Lien?
    • Legal Right To Hold A 3rd Party Liable (Owner)
    • Still Maintain Your Contract Right
    • Key Players
      • Owner
      • Common Law Agent
      • Statutory Agent
      • Prime Contractor
      • Subcontractor
      • Materialmen/Labor/Professional Services
    2 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 4. Prerequisites To Filing A Lien
    • Can You Assert A Lien?
    • Preparing For Eventual Lien Claim: Distinguish The Job, Determine Necessary Notices And Obtain Necessary Information
    • Prelien Notice (The 5 "W’s")
      • What Is It?
      • Who Gets It?
      • When Does It Have To Be Given?
      • Where Is It Posted, Filed And Sent?
      • Why Is It Done And What Happens If Not Done Correctly?
    • Gathering The Information
    3 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 5. Can You Assert a Construction Lien
    • RCW 60.04.031 - Provide Labor, Equipment Or Services For The Improvement Of Real Property
    • Registered With DOLI At Time Project Work Begins Or Customer Registered
    • Surety Bond With DOLI ($12,000 For General Contractor, $6,000 If Specialty Contractor)
    • Get Copy Of Certificate Of Registration (RCW 18.27)
    4 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 6. Important Distinctions
    • Determine Background Information For Perfection Of A Lien
      • Public v. Private Jobs
        • Public - No Lien Claim
        • Private - Lien Claim
      • Movable Equipment
        • Attached to Real Property - Lien Claim
        • Used To Facilitate Work Rather Than Improve Or Enhance Project Value - No Lien Claim
      • Type Of Structure/Project
        • Residential - A Single-Family Residence Occupied By Its Owner
        • Commercial - All Other Structures
    5 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 7. Important Distinctions
    • Determine Background Information For Perfection Of A Lien (cont.)
      • New Construction or Alteration/Repair
        • New Construction - Building A Structure Where None Existed Before
        • Alteration/Repair - Any Change To An Existing Structure
    6 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 8. What Property is Subject to Construction Lien?
    • Lien Attaches To
      • Improvement Into Which The Labor/Materials Were Incorporated
      • As Much Of The Land Where The Structure Is Located As Is Necessary For The Convenient Use And Occupancy Of The Improvement
    • Legal Title Of The Person Who Built The Improvement
      • Fee Title v. Lessee
      • Condominium Complex Common Areas
    7 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 9. Prerequisites To Filing A Lien Claim
    • What Is The Necessary Information
      • Name And Address Of Property Owner
      • Name And Address Of Mortgagees Or Trust Deed Beneficiaries
      • Legal And Common Description Of Property Where Project Is Located
      • Name, Address, Registration Number And Phone Number Of Prime
      • Either The Name And Contract Information Or The Lender Or The Surety
    8 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 10. Prerequisites To Filing A Lien Claim
    • Where Can You Get The Necessary Information
      • Building Permit Application
      • Must Be Posted By Prime If Project Is Greater Than $5k (RCW 60.04.230)
      • Must Be Provided By Prime To Any Persons Who Supply Services, Materials, Equipment Or -Subcontractor Once Identity and Mailing Address Is Known To Prime (Mail A Postcard) (RCW 64.04.261)
      • Title Insurance Company
    9 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 11. Prerequisites To Filing A Lien Claim
    • Prelien Notices
    • Information Notice To Owner
      • Who Has To Give It And When
    • Notice Of Right To Claim A Lien
      • What Is It?
      • Who Has To Give
      • Who Gets It? (Owner & Prime Contractor)
      • When Does It Have To Be Given? - 60/10 Days
      • Where Is It Posted, Filed And Sent?
      • If Not Done, Lose Lien Rights
    10 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 12. Filing The Lien
    • Claim Of Lien
      • Must Contain The Following Information (RCW 60.04.091)
        • Claimant’s Name, Phone Number And Address
        • First And Last Date Of Benefit Contribution
        • Name Of "Person" Indebted To Claimant
        • Street Address Or Legal Description
        • Owner Or Reputed Owner’s Name
        • Principal Amount Of Lien Claim
    11 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 13. Filing The Lien
    • Claim Of Lien (Cont.)
      • When Must It Be Filed With County Auditor
        • Not Later Than 90 Days After Claimant Last Provided Substantial Benefit or Work
          • Deadline Not Extended By
            • Trivial Work Or Material
            • Punch List Work
      • Signed Under Oath By Someone With Knowledge Of The Facts In The Lien Claim
      • Failure To Timely File The Lien Results In Loss Of Lien Rights
      • Where To File
        • County Auditor For County Where All Or Part Of Property Is Located
    12 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 14. Filing The Lien
    • Claim Of Lien (Cont.)
      • Practical Advice
        • Itemize Your Lien Claim
          • Lienable v. Non-Lienable Items
          • Priority
    • Notice Of Filing Lien
      • Within Fourteen (14) Days After Lien Is Recorded
      • To The Owner And Prime Contractor And Include A Copy Of The Lien
      • Method Of Delivery By Certified Or Registered Mail
      • Failure To Do So
        • Loss Of Right To Attorney Fees And Costs
        • Underlying Lien Is Still Valid
    13 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 15. Filing The Lien
    • Notice Of Intent To Foreclose
      • A Notice Of Intent To Foreclose Is Not Required In Washington State
    14 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 16. Foreclosure Of Construction Lien
    • Must File Suit To Foreclose Lien Within 8 Calendar Months After Lien Is Recorded or Claim Of Lien Lapses (RCW 60.04.414)
    • Who Do You Sue
      • Owner
      • Contractor
      • Mortgagee
      • Landlord And/Or Tenant
    15 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 17. Foreclosure Of Construction Lien
    • Where Do You Sue
      • Court Where Property Is Located
      • Contract Venue Provisions
      • Arbitration Clause
    • Damages
      • Lien Amount
      • Interest
      • Court Costs
      • Attorney Fees - Reciprocal If Frivolous And Show Cause Hearing
    16 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 18. Priority Of Construction Lien to Other Claims
    • Multiple Encumbrances
      • Priority
      • Liens Attach On Date Work First Begins
    • Construction Lien v. Subsequent Mortgage or Trust Deed
      • Lien Has Priority
    17 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 19. Priority Of Construction Lien to Other Claims
    • Construction Lien v. Prior Mortgage (RCW 60.04.061)
      • Prior Recorded Mortgage On Trust Has Priority
      • Priority Over Unrecorded Liens, Mortgages, Deeds Of Trust Or Other Encumbrances At The Time The Work Started
      • Priority Among Lien Claimants (RCW 60.04.181)
        • Labor
        • Employee Benefit Plan
        • Materials/Supplies/Equipment (Third In Line)
        • Prime And Professional Services
        • Prorata Within Each Class
        • Any Fees And Costs Have Same Priority As Class Of Lien To Which Related
    18 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 20. Frivolous Lien Claims
    • Owner (Or Others) May Apply To Court To Have Lien Removed From Property Or Reduced If It Is Frivolous And Made Without Reasonable Cause Or Is Clearly Excessive
    • Attorney Fees And Costs To Party That Prevails
    19 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 21. Notice To Lender - Withholding Of Funds
    • Notice To Lender (RCW 60.04.221)
      • The Material Supplier's Friend
      • IF -
        • Interim Or Construction Financing
        • No Payment Bond Equal To At Least 50% Of Construction Financing
        • No Payment Within 5 Days As Required By Contract, Invoice, PO Or Benefit Plan
    20 © SUSSMAN SHANK LLP | www.sussmanshank.com
  • 22. Notice To Lender - Withholding Of Funds
    • Notice To Lender (RCW 60.04.221) (Cont.)
      • THEN -
        • Notice To Lender Within 35 Days By Certified Mail
        • Notice To Owner And Prime By Certified Mail
        • Content Similar To Claim Of Lien
        • Lender Shall Withhold Funds Claimed In Notice From Subsequent Draws Or Require Payment Bond
    21 © SUSSMAN SHANK LLP | www.sussmanshank.com