Hawaii Mechanics Lien & Bond Claim Law

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Those unpaid on a construction project in Hawaii can find a remedy in the state's mechanics lien and bond claim rights...but navigating these confusing laws is tough. It is especially tough in Hawaii because the laws are slightly different than the rest of the country (you know, on the main land).

This presentation goes through the high level information you need to know to protect your lien and bond claim rights. Review, take action, and get paid!

Published in: Law, Travel, Business
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Hawaii Mechanics Lien & Bond Claim Law

  1. 1. HAWAII MECHANICS LIEN & BOND CLAIM LAW TIPS & HINTS TO GET YOU PAID
  2. 2. Don’t Feel Set Adrift - Get the Facts
  3. 3. License Is Mandatory for Contractors and Subs - and can sever suppliers’ lien rights 1 2 3 Residential Projects - extension of credit must be reasonable Liens Filed with the Court - and Only Attach if the Courts Approves Three Key Facts
  4. 4. 1 2 3 Three Key Facts License Is Mandatory for Contractors and Subs - and can sever suppliers’ lien rights Residential Projects - extension of credit must be reasonable Liens Filed with the Court - and Only Attach if the Courts Approves
  5. 5. Every Direct Contractor and Sub must be licensed. This can cut-off the lien rights of suppliers.
  6. 6. Direct and Sub-Contractors Must be Licensed: Parties lower on the chain will only have lien rights if the parties above them have the required license Suppliers should be careful - the direct contractor’s mistake can extinguish lien rights for everybody down the chain
  7. 7. 2 Reasonable Extension of Credit
  8. 8. 2 • On Residential Projects, Suppliers forfeit lien rights if the extension of credit was unreasonable ! Reasonable Extension of Credit
  9. 9. 2 • This means: ! Suppliers should get credit information from customers ! (Credit application / Credit status) Reasonable Extension of Credit
  10. 10. 3 Court Approval Required
  11. 11. 3 Lien Applied for with Court (and served on Owner, Person Contracting for the Work, & General) Court Approval Required Court holds hearing in 3-10 days in order to determine if there is probable cause for the lien to attach
  12. 12. 3 This is different than most other states. ! Generally, the lien attaches when work begins and is perfected when filed. ! In Hawaii, the lien does not attach until the Court approves by finding probable cause. Court Approval Required
  13. 13. 3 If probable cause is found, the court will issue an Order Directing the Lien to Attach One more step may be required in some circumstances: ! If the property being liened is a property registered in the land court, a Certified copy of the Order Directing the Lien to Attach must be filed with the land court. Court Approval Required
  14. 14. Bond Claims Making a Bond Claim in Hawaii is generally straight forward - but.....
  15. 15. The rules regarding bond claims may be different when the project involves the University of Hawaii, and specific information should be obtained from the University. Bond Claims Other supplemental rules or regulations may apply, and can be found by contacting the public entity contracting for the work.
  16. 16. Free Lien Resources for Hawaii ACCESS FREE RESOURCE

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