Construction Liens 101


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This Webinar will provide an overview for the novice of the various liens available to contractors, subcontractors and material suppliers. Participants will gain a basic understanding of what tools are available to assist in collecting amounts owed to their company for labor and materials supplied to a work of improvement. This entry level Webinar will provide participants with a brief history of the evolution of liens and the features unique to each lien. As an attorney Shaaron Bangs has a wide range of construction industry experience, representing clients, serving as a Judge ProTem and Arbiter and conducting numerous seminars. In this valuable Webinar she will discuss how to use the various tools to your best advantage." Anyone who has recently been given responsibility to collect from Debtor’s in the construction industry will benefit from this session.

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Construction Liens 101

  1. 1. CONSTRUCTION LIENS 101 Presented by Shaaron A. Bangs, Esq. Crawford & Bangs, LLP Sponsored by CMA Business Credit Services
  2. 2. <ul><li>Mechanics’ Liens </li></ul><ul><li>Stop Notices </li></ul><ul><li>Payment Bonds </li></ul><ul><li>Miller Act Bond </li></ul>
  3. 3. MECHANICS’ LIEN LAW <ul><li>The essence of the “Mechanics’ Lien Law” is clearly stated in Section 3 of Article XIV of the California Constitution: </li></ul><ul><li>“ Mechanics, persons furnishing materials, artisans, and laborers of every class, shall have a lien upon the property upon which they bestowed labor or furnished materials for the value of such labor done and materials furnished; and the Legislature shall provide, by law, for the speedy and efficient enforcement of such liens.” </li></ul>
  4. 4. MECHANICS’ LIEN <ul><li>Private Works Only </li></ul><ul><ul><li>Attached to work of improvement and the land upon which it is situated. </li></ul></ul><ul><li>Priority of Claims </li></ul><ul><ul><li>Relates back to time of commencement of work of improvement </li></ul></ul>
  5. 5. Stop Notices <ul><li>Private Works </li></ul><ul><li>Public Works </li></ul>
  6. 6. Stop Notices – Private Works <ul><li>Owner – Anyone entitled to claim of lien except original contractor </li></ul><ul><li>Lender – Anyone entitled to claim of lien including original contractor </li></ul><ul><ul><ul><li>Must be bonded </li></ul></ul></ul><ul><li>Attached to unexpended funds </li></ul><ul><li>Attorney’s fees recoverable to prevailing party on Bonded Stop Notice </li></ul><ul><li>Pro Rata Distribution </li></ul>
  7. 7. Stop Notice – Public Works <ul><li>Anyone entitled to file claim of lien except original contractor </li></ul><ul><li>Attaches to construction funds </li></ul><ul><li>Public entity must withhold amount of claim plus “Reasonable Cost of Litigation” </li></ul><ul><li>Pro Rata Distribution </li></ul>
  8. 8. Payment Bond <ul><li>Private Works </li></ul><ul><li>Public Works </li></ul><ul><ul><li>All projects $25,000 or more </li></ul></ul><ul><li>For the benefit of all persons entitled to serve a Stop Notice </li></ul>
  9. 9. Miller Act Bonds <ul><li>Federal Projects </li></ul><ul><ul><li>Any claimant who has dealt directly with contractor or with subcontractor to the contractor </li></ul></ul><ul><ul><li>Contract price or reasonable value of labor or materials furnished to the project </li></ul></ul>
  10. 10. Miscellaneous Bonds <ul><li>Mechanics’ Lien Release Bond </li></ul><ul><li>Stop Notice Release Bond </li></ul><ul><li>Contractor’s License Bond </li></ul>