Filed A Mechanics Lien and Being Threatened?

Filed A Mechanics Lien and Being Threatened?

I’ve heard this story a lot. After you file a mechanics lien, the property owner or prime contractor comes back to you in a rage threatening to torch the earth if you don’t remove it. Perhaps they will threaten to never pay you, to bury you in legal fees, or…more troubling, they may threaten to never do business with you again.

It’s possible to file a mechanics lien on amicable terms (heck, we see these amicable situations everyday). However, it’s no secret that mechanics liens can bother property owners and prime contractors a great deal. It’s exactly why they are so effective. As this post explores, while some folks may be angry with you for filing a lien, there are some limits to what they can and cannot say and do.

Washington’s Statutes Attacks Threats Related to Liens

In Washington, there is a statute within their mechanics lien laws that specifically addresses this situation.  The statute states that any threats or acts of coercion related to a mechanics lien or preliminary notice filing will be considered an unfair trade practice. RCW 60.04.035 provides:

The legislature finds that acts of coercion or attempted coercion, including threats to withhold future contracts, made by a contractor or developer to discourage a contractor, subcontractor, or material or equipment supplier from giving an owner the notice of right to claim a lien required by RCW 60.04.031, or from filing a claim of lien under this chapter are matters vitally affecting the public interest for the purpose of applying the consumer protection act, chapter 19.86 RCW. These acts of coercion are not reasonable in relation to the development and preservation of business. These acts of coercion shall constitute an unfair or deceptive act or practice in trade or commerce for the purpose of applying the consumer protection act, chapter 19.86 RCW.

What does this mean?

Well, it’s not good if your company gets sued for unfair trade practices. In addition to being possibly liable for the litigant’s attorney fees, you could also be penalized by the court with punitive damages (of sorts) and sanctioned by the attorney general’s office. It could cause problems with your licensing qualifications, and more. It’s a big bottomless pit of trouble.

In the event a contrator, subcontractor supplier or developer is found to have acted in a way prohibited by this statute, that behavior is not only qualified as an unfair or deceptive trade practice, the statute requires it by staying it “shall constitute” such.

Rules In Other States

The law is very clear in Washington, but unfortunately, not every states has statutes like this. However, every state does have public policy reasons behind their mechanics lien process as well as an unfair trade practices act. Accordingly, and perhaps even citing the Washington statute as persuasive authority, a lien claimant could argue that the coercive actions in other states should be considered an unfair or deceptive act.

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Scott Wolfe Jr

About Scott Wolfe Jr

Scott Wolfe Jr. is the CEO of zlien, a company that provides software and services to help building material supply and construction companies reduce their credit risk and default receivables through the management of mechanics lien and bond claim compliance. He is also the founding author of The Lien and Credit Journal, a leading online publication about liens, security instruments and getting paid on every account. Scott is a licensed attorney in six states with extensive experience in corporate credit management and collections law, with a specific emphasis on utilizing mechanic liens, UCC filings and other security instruments to protect and manage receivables. You can connect with him via Twitter, LinkedIn and Google+.