Our friends at Wolfe Law Group have just started publishing a new blog that focuses on construction law issues in the Pacific Northwest, and specifically in Washington and Oregon. So, subscribe to their feed and check out that blog to keep tabs on construction (and lien) issues in those states.
Their first post is of special interest to us in at the Construction Finance Journal. It’s title gives away its substance: “The Risk of Litigating a Washington Construction Lien.”
More than simply a discussion on how to actually dispute a mechanics lien, the post reviews the potential risk and rewards connected to any proceeding to have a lien overturned. While this post obviously provides information to those looking to dispute a mechanics lien, it’s also revealing to those who hold or who are filing liens.
In Washington, anyone who disputes a lien faces potential risk…or reward. If they win and the lien is overturned, they may be entitled to attorneys fees. If they lose and the lien is upheld, the lien claimant will be entitled to attorneys fees. Since lien dispute proceedings can cost thousands in attorneys fees, the Washington laws require parties disputing a lien to think long and hard about whether to bring this type of action.
Why is this important to those who hold or are filing liens? Simple: It demonstrates just how strong a construction lien can be.
In prior posts, we wrote about how construction liens are not typically invalid simply because someone claims payment is not due. Usually, for a lien to be declared invalid, there must be some sort of facially or procedural defect with it (it is filed late, it does not properly describe the property, etc.).
These technical and procedural defects may lead to a lien’s demise…but other very critical issues (validity of back charges, change orders, timing of payments, etc.) will likely not. So, while both parties may have arguments on each of these disputed issues, before using those arguments to dispute a construction lien, the disputing party will have to consider the risk.
And in Washington, there is quite a bit of risk.