Filing a mechanics lien has the tendency to be complicated as the laws are different from state to state. However, don’t let the fine print be the reason you don’t get paid. Check out the “5 things to know” about Idaho mechanics lien law below before filing.

Idaho Mechanics Lien Law is Friendly to Contractors

Idaho mechanics lien law is lenient. One way to describe it might be that Idaho is very friendly to those in the construction industry, as most anyone in Idaho providing labor or materials to be used in “virtually any kind of real property or improvement is granted mechanics lien rights.” This extends to material or equipment lessors, professional engineers, licensed land surveyors, and even persons providing on-site management or supervision. Note, however, that a valid license may be required if the work being performed requires a license.

The Deadline to File an Idaho Mechanics Lien Is Counted From Date of Last Furnishing

The deadline to file a mechanics lien in Idaho is 90 days within the last date of furnishing labor and materials to the project. If the work is substantially complete and a project participant is just performing “punch-list work,” or other work that is trivial in nature, the deadline will not be extended. However, if a project participant is required to remedy a defect at the demand of a public inspector, that work is not considered trivial and will likely extend the deadline by which a mechanics lien must be filed.

Only the General Contractor May Be Required to Send Preliminary Notice

The only instance in Idaho where preliminary notice is required to be sent prior to claiming a valid Idaho mechanics lien is when a general contractor is performing work on a residential project with a contract in excess of $2,000. The general contractor must send a Residential Disclosure statement if this is the case.

Attorney’s Fees May Be Reimbursed

In Idaho, you cannot claim attorney’s fees and other consequential damages as part of the lien amount. However, if a project participant needs to foreclose on the lien, they are entitled to recover the attorney’s fees and filing costs.

The Bottom Tiers of Mechanics Lien Claimants Tend to Take Priority

In Idaho, there is a set order for which party’s mechanics lien takes priority. Laborers’ claims take first priority. Next in line are material men, followed by subcontractors, then the prime contractor, and then engineers/surveyors.

Written by Scott Wolfe Jr See original article at Idaho Mechanics Lien Law: 5 Things to Know Originally posted on the LIEN

Dear zlien Clients and Readers of the Lien Blog,

Zlien strives to be the leader in the construction credit management field. An important part of accomplishing this goal is to provide the web’s best and most comprehensive resources regarding mechanics liens and notices.

In order to provide these resources, countless hours are spent scouring state statutes and reading case upon case to make sure the information provided is accurate. Our commitment to excellence in this area means that this work is only done by, or under the direct supervision of, licensed construction attorneys. Because of the enormous expenditure of time and effort in compiling and drafting these resources, zlien must defend itself from infringement of its intellectual property.

It has recently come to our attention that the National Association of Credit Management (“NACM”) has lifted text and links directly from zlien’s website, and displayed it on their own website for profit without the consent of zlien, and without any modification to the font, colors, or links. While, on one hand, we are flattered by the tacit recognition of zlien’s status as the leader in the field, and the quality of the work produced, we cannot stand idly by while its content is pirated for commercial gain.

To defend its intellectual property, zlien filed suit in federal court alleging the infringement of its copyrights and trade dress.  You can view a copy of the filed Complaint here:  Express Lien, Inc. dba zlien v. National Association of Credit Management.

While we believe in the NACM’s stated mission and acknowledge it as an important organization for credit managers and controllers across the country, its blatant and unauthorized sale to its membership of zlien’s mechanics lien and bond claim resources is wrong.

Unlike the NACM, which is a multi-focused organization, zlien’s mission and focus is clear: we make our clients feel empowered to take on new business without payment concerns by solving the mechanics lien and bond claim puzzle. This fanatical focus on doing this one thing better than anyone else drives us. To accomplish this, one of our core values is accessibility. We want the mechanics lien process (and mechanics lien legal information) to be accessible to all businesses. Copying zlien’s resources and putting them behind a paywall is not only a violation of our copyright, but also using our copyright in a way that violates our core values.

We hope to have this matter resolved quickly. In the meantime, please continue to visit Zlien’s resources pages for the best mechanics lien information on the internet.

Sincerely,

Scott Wolfe
CEO

Nate Budde
CLO

Lien Smart. Get Paid.

Compare zlien and NACM’s Preliminary Notice and Mechanics Lien Services

Written by Scott Wolfe Jr See original article at Zlien Forced to Defend Its Resources from Copyright Infringement by NACM Originally posted on the LIEN

Those who provide labor and/or materials on a private construction projects in Arizona are required to send a preliminary notice at the beginning of their participation in the project. Failure to provide this preliminary notice may result in the loss of their right to later file a mechanics lien if they remain unpaid.

Who Should Send Arizona Preliminary Notice?

All participants who may claim an Arizona mechanics lien must send a preliminary 20-day notice in order to preserve these rights.

Who Should Receive Arizona Preliminary Notice?

For those who contracted directly with the property owner, the preliminary notice should be sent to the property owner and the construction lender on the project (if there is one).

For those who did not contract directly with the property owner, the preliminary notice should be delivered to everyone up the project hiring chain from you. For instance, if you are a material supplier hired by the subcontractor, the preliminary notice should be sent to the subcontractor and general contractor, as well as the property owner and construction lender (again, if there is one).

If you do not know who the construction lender is, or if there is even a construction lender on the project, you can make a request for this information along with the preliminary notice.

How Should Arizona Preliminary Notice Be Sent?

An Arizona preliminary notice must be delivered by at least registered or certified mail, with the sender obtaining a certificate of mailing, receipt of registration, or receipt of certification. Arizona also requires proof that the Notice was given, either by acknowledgement of receipt by signature of person receiving notice, or by Affidavit of Proof of Service accompanied by the certificate of mailing or recipt of certification or registration if the person on whom the Notice was served fails to complete an acknowledgement within 30 days.

When Should Arizona Preliminary Notice Be Sent?

The Arizona preliminary notice should be sent within 20 days of the first date you furnished labor or materials to the construction project. The preliminary notice protects your right to file a lien for the amount of labor or materials you delivered for the previous 20 days, and every day in the future that you are furnishing labor or materials to this project.

What this means is if you provide labor or materials on May 5^th, you should have the preliminary notice sent by May 25^th. Sending this notice before the 25^th will protect your lien rights for the amount delivered from the start of the project through its finish.

If the project spans from May 5^th through the last day of June, and you serve the preliminary notice before May 25^th, your lien rights will be protected through the entirety of the project.

If you do not send the notice until June 5^th, your lien rights will be protected for the 20 days prior to June 5^th through the end of the project, but all labor and/or material provided prior to 20 days before June 5th are unprotected.

Because the preliminary notice preserves lien rights up to 20 days prior to it being sent, it is best practice to end it before you furnish materials to the project, or at the start of your participation in the project to ensure that you preserve your rights as best as possible.

What to Include on Arizona Preliminary Notice?

The preliminary notice in Arizona should include the description of labor or materials that are to be furnished on the project, the address of the property, the party who hired the claimant, the estimated total contract amount, and identification of the property owner.

In Arizona, the preliminary notice is different from many states in that the legal description of the property where work was performed is required to be included. This information can be found with the county’s assessor office.

Preliminary notices are crucial to mechanics lien rights in Arizona – don’t go without sending them.

Written by Nate Budde See original article at Arizona Preliminary Notices: The Basics Originally posted on the LIEN

Sometimes, it seems like I am constantly discussing deadlines. There’s a good reason for that, though. The importance of monitoring and complying with the statutory deadlines cannot be overstated. It is crucial that the time period in which a lien can be filed is not allowed to slip by unnoticed. If it does, the ability to file a mechanics lien is likely gone, and your security is gone with it. Nevada presents an interesting situation the deadline is marked by 90 days after the the later of two dates: 1) the completion of the work of improvement, or 2) the last furnishing of labor and/or materials by the lien claimant. While this may provide the lien claimant with more time in which to file a lien – yay – it also may make the deadline harder to pinpoint with accuracy – boo.

Nevada’s Mechanics Lien Deadline: How to Determine Completion of the Work Of Improvement

“Work of improvement” means the entire structure or scheme of improvement as a whole, including, without limitation, all work, materials and equipment to be used in or for the construction, alteration or repair of the property or any improvement thereon, whether under multiple prime contracts or a single prime contract

This means that a potential lien claimant can claim the benefit, in terms of a later filing date for a mechanics lien, of work performed on the project after that lien claimant’s contract has been performed – provided that the subsequent work by another party was contemplated to be part of the same project or improvement. In fact, Nevada courts have defined ”improvement” to broadly encompass “the entire structure or scheme of improvement as a whole.” Peccole v. Luce & Goodfellow, 212 P.2d at 727 (1949). It doesn’t matter if the work is performed under separate contracts; if the work under the separate contracts is continuous, it still comes together under the definition of “work of improvement”.

As long as the work is one project, it doesn’t matter if the work is broken up into parts. Earlier parties on the job can use dates on which work was performed by later parties on the job for the purposes of determining when a mechanics lien may be filed. If the work is separated enough that it becomes a different project, however, it does not count for the purposes of setting the mechanics lien deadline. So, how does this work in action?

Recent Nevada Case Provides Some Insight

The Nevada Supreme Court recently heard an appeal of a case with just this situation. In I. Cox Construction Company v. CH2 Investments the court affirmed a district court’s ruling regarding the expungement of a mechanics lien for being untimely. The facts of the case are as follows.

Cox Construction Company (“Cox”) was hired by Jim Harwin and his company Safe Shot (“Harwin”) to construct a shooting range. The original cost estimate was $37,000 but that proved to be much too low. By September 2009 Cox had billed $48,000, and by October Harwin had paid $46,000 of that amount but refused to pay anything further. Cox worked through October, and then left the project with the project almost entirely finished. In fact, Harwin open the shooting range for business shortly after Cox left the project. After receiving noise complaints in late 2009 and early 2010, Harwin installed soundproofing.

In making the determination, the district court noted that neither party contemplated soundproofing as part of the project, neither the building or operating permits required soundproofing, and the business was opened prior to the need for soundproofing being noticed. When those factors were weighed, it was determined that the work of improvement was completed when Cox left the project, and that the subsequent installation of soundproofing constituted a separate work of improvement. The work was not continuous, and therefore, two separate projects.

What This Means

That the 90-day period can begin to run from the completion of the project, rather than the potential lien claimant’s last work, can be beneficial. It provides a longer time period in which the lien may be filed. Claimant’s have to exercise caution, however. Just because there is work being performed at the site doesn’t necessarily mean that the lien period can be extended – the work must be part of the same work of improvement. Just as with every other mechanics lien deadline determination, it pays to be vigilant.

Written by Nate Budde See original article at Nevada Mechanics Liens: What’s the Real Lien Deadline? Originally posted on the LIEN

Let me introduce myself:  My name is Scott Wolfe, and I’m an attorney.  I have first hand knowledge about everything that is wrong with America’s legal system, but so do you. That’s because what’s wrong with the law is all around you.

This isn’t just a problem for our system of government, but it’s a problem for our entire economy.  It’s a problem for your business. In this article, I’m going to tell you why the rule of law is broken and how it is costing your business — and specifically your credit department – money. Lots of money.

The Traditional Lawyer Is Dead

A friend of mine, Ernie Svenson, wrote an article on Laywerist last week titled “Going Out of Business, Bar Association Edition.”  He wonders whether bar associations are the legal profession’s underlying problem and whether they will become “irrelevant to those who really want the profession to improve.”  This is a common and growing sentiment among some in the legal community.

The Wall Street Journal’s Law Blog chimes in on this issue frequently, but most recently published “Do Lawyers Know Best?,” which covered an Emory Law Journal article written by Professor James E. Moliterno. The professor is quoted as saying that “the legal profession is ponderous, backward looking and self-preserving.”  Also, I highly recommend reading Richard Susskind’s “The End of Lawyers?”

There are two things to say about this:

1. This is all true, and perhaps both of these articles understate the problem; and
2. The only people who will disagree are backward looking lawyers.  No one in private enterprise will disagree with this.

When lawyers misbehave they are reviewed by other lawyers. When deciding on which rules apply to lawyers, it is the lawyers who make the rules and enforce the rules. The Securities and Exchange Commission do not review large billion dollar firms. The Federal Communications Commission does not review lawyer media communications and advertisements. It’s rare to get police departments to review potential lawyer fraud since they will leave this to the jurisdiction of the bar associations.

Certainly, the self-regulating system has been around for a long time, but that is no justification for its continuation. The world is more global, legal compliance issues are more complicated, the enterprise of law is enormous, and the nation has standards of transparency that the legal profession simply mocks.

While this may all seem like a technical lawyer regulation issue, the next section of this post explains how it translates into a concrete problem for the rule of law and justice.

Is The Law Uncertain, Unreliable And…Worthless?

Ask a lawyer whether you will win or lose your case and you’ll never get a straight answer. In fact, its an ethical violation for an attorney to tell you an answer, and that’s because it’s impossible to predict how the courts will interpret the law and rule upon your case.  This is not simply because the law is ambiguous and subject to interpretation, but also because courts will rule inconsistently on the same legal and factual questions.

In fact, because of litigation uncertainties, attorneys are pretty uniform in their advice to accept a compromised settlement than to “roll the dice” in litigation. Even if you win, you’re likely to lose because it’s going to cost you a fortune (sometimes, improperly so), and it may be very difficult to collect on a judgment.

This begs the question: How does the “Rule of Law” mean anything if there is no consistency or reliability?

House Speaker John A. Boehner was widely quoted with his question about the IRS scandal: “Who’s going to jail over this scandal.” His question is hallow and will be met with eventual silence. The real question to be asked in response to the IRS and Justice Department scandals is the above question about the Rule of Law.

The same is true of the Justice Department and their wiretapping scandal, or of any scandal. It’s spin, ambiguity, details, law exceptions and confusion. It’s never justice. It’s never clarity.

The same thing repeats itself thousands of times each day across our civil and criminal courts.  District court judges make decisions that significantly impact people’s lives and businesses, but they do it behind closed doors. Sure, everything they do is “public record,” but who is keeping track?  And which watchdog group and media outlet is paying attention to the finer points of civil procedure rules or rules about contract interpretation?

The truth is that the courtroom has become a howling wilderness, just as our government has. And if you think the government is bad, just imagine how bad it is in civil and criminal courthouses where journalists rarely review or ask questions about pending cases, and even if they did, they wouldn’t understand the spun complex answers.

How This Is Costing Your Business Lots Of Money

Let’s say you are a credit professional working with a material supply company and you have a client refusing to pay. What do you do?

If the client refuses strongly enough, you’ll eventually be required to start litigation to enforce your right to the debt. But wait, if you’re going to get into litigation you better review your circumstances and make sure the juice will be worth the squeeze.

Do you need the money soon?  If you need the money with any relative quickness you’re better off going ask for a loan. The reason is that litigation is likely to take months or years of time from start to finish, and that doesn’t count the time you’re going to spend in appeals and/or in chasing your tail to collect the judgment.

You may see where this is going.

First, the Rule of Law is so inconsistent and ambiguous that it’s impossible to make a reliable determination of whether you will or will not prevail in litigation. Second, litigation will take a very long time and will cost a lot of money.  If you have a customer not paying you, and you’re like most small to mid-size businesses in America, it’s a losing proposition.

The legal system’s disfunction leaves the fate of your business to the chance that all of your customers will always pay you. This is why credit management and securing your receivables with lien rights is so very important. When confronted with a non-paying customer, being able to use the disruptive lien tool may be the only real chance you’ve got.

Related articles

• Do Lawyers Know Best?
• China and the Rule of Law: Following in the Footsteps of the UK?
• The real IRS scandal: Reinterpreting the law
• Obama’s Scandals Stem from His Lawless Presidency

Written by Scott Wolfe Jr See original article at What’s Wrong With The Law And How It Is Costing Your Business Money Originally posted on the LIEN

Sometimes mechanics lien law can be tricky to understand. If you are interested in learning a little bit more about how to file a New Mexico mechanics lien, you might want to check out some of the most important “5 things to know.”

Contractors Must Be Licensed to File a Valid New Mexico Mechanics Lien

New Mexico mechanics lien protection is pretty broad. Licensed contractors, subcontractors, as well as material and equipment suppliers that have participated in the contributed to the construction, alteration or repair of a property are all entitled to mechanics lien rights. While design professionals including surveyors, architects, and engineers all have lien rights as well, the design plans must be used in order to file.

However, New Mexico has strict licensing requirements. If the claimant is required to have a license by the Construction Industries Licensing Act, the claimant must be licensed in order to claim a lien.  Further, an unlicensed contractor may not be able to file suit to recover any money owed even without the protection of a lien.  And finally, if a contractor is unlicensed it may be possible for the property owner to request a return of the money already paid.

Be Aware of Two Different Deadlines to File Depending On Project Tier

There are two different deadlines to file a mechanics lien in New Mexico. For general contractors, the deadline to file a mechanics lien is 120 days from the completion of the project. Subcontractors, and other parties without a direct contract with the property owner, only have 90 calendar days from the completion of the project in which to file a New Mexico mechanics lien.

While it is not required that a copy of a New Mexico mechanics lien be sent to the property owner after recordation, a party without a direct contract with the property owner may send notice of the lien to the property owner in an attempt to eliminate a possible defense that the owner has paid the full contract amount to the general.

New Mexico has Very Specific Preliminary Notice Requirements

The conditions in which preliminary notice are required in New Mexico are very specific. New Mexico only requires a preliminary notice to be sent under certain conditions. Preliminary notice must be given when: 1) The claimant does not contract directly with the property owner or the general contractor; AND 2) The claim is more than $5000; AND 3) The project is NOT on a residential property with less than 4 dwellings.  All other parties are not required to send preliminary notice, but may send a notice of intent to lien if desired, in an attempt to facilitate payment.

When required, preliminary notice must be sent within 60 days of the first date that service or materials were provided on a project.

Attorney’s Fees May Be Awarded In Lien Foreclosure Action – But Only To Successful Claimant

While not included in the mechanics lien document itself, attorney’s fees will be awarded to a lien claimant in a successful enforcement action. Interestingly, the award of attorney fees in a successful enforcement action may not be reciprocal to the property owner in New Mexico. If the property owner is successful in defeating the mechanics lien claim in a foreclosure action, the unsuccessful lien claimant may not be held liable for the property owner’s attorney’s fees.

A Legal Property Description is Not Required

A legal property description is not required when filing a mechanics lien in New Mexico. Instead, the lien simply needs to include a description “sufficient for identification” of the property. Clearly, a full legal description is sufficient to identify the property, and if available, may be used. As a guideline, the description should be sufficient for a stranger to identify the property (at the exclusion of other properties). In the case of residential property, a municipal street address may be sufficient to identify the property for the purposes of filing a New Mexico mechanics lien.

Written by Scott Wolfe Jr See original article at New Mexico Mechanics Lien Law: 5 Things to Know Originally posted on the LIEN

Thinking about filing a Louisiana mechanics lien? Look no further, here are “5 things to know” that will help you hit the ground running!

Louisiana Mechanics Lien Protection Extends To Many Project Participants

Louisiana mechanics lien law extends protection to many different parties. Not only are general contractors and subcontractors able to file a mechanics lien, but laborers or employees, material suppliers, equipment lessors (if leased to owner, contractor or subcontractor by written lease), architects, engineers, and surveyors also qualify. Even parties that supply fuel for machinery have mechanics lien rights in Louisiana. Out of luck however, are suppliers to suppliers who do not have the right to lien.

The Deadline to File a Louisiana Mechanics Lien Varies

The deadline to file a Statement of Claim and Privilege, (a Louisiana mechanics lien) depends on the party’s role in the project as well as whether or not a Notice of Contract or Notice of Termination has been filed.

General Contractor:

• If a Notice of Termination has been filed, the general contractor has 60 days from the date the notice was filed
• If a Notice of Termination had not been filed, the general contractor has 60 days from the date the project was considered completed

All Other Parties:

• If a Notice of Contract was filed, project participants not in contact with the property owner are required to file the lien 30 days from the date that the Notice of Termination was filed
• If a Notice of Contract was not filed, project participants not in contact with the property owner have 60 days from the date the Notice of Termination was filed, or 60 days from the date of substantial completion of the work, if no notice of termination is filed.
• For material suppliers specifically, if a Notice of Contract was not filed on a residential project, the project participant has 70 days to file a mechanics lien. The 70 days will either begin on the date notice of termination was filed, or, if no notice of termination was filed, from abandonment or substantial completion of the work.

Preliminary Notice is Only Required for Some Project Participants

Preliminary notice in Louisiana is very specific to the project participant and their role. Specifically, general contractors must file a Notice of Contract in the office of the recorder of mortgages in the property’s parish before beginning to work on a project valued at over $25,000. In the event that a general contractor is working on an owner occupied existing residence, a Notice of Lien Rights is required to be given to the property owner prior to beginning any work on the property. Failure to provide the appropriate preliminary notice could prevent the project participant from lien rights.

Material suppliers have a different set of requirements. If working on a residential project, material suppliers are required to provide a Notice of Non-Payment via certified mail with return receipt requested to the property owner and general contractor 10 days prior to filing a mechanics lien.

Even further, equipment lessors must also provide preliminary notice if not directly in contact with the property owner. A copy of the lease must be sent to the property owner via certified mail with return receipt requested to the property owner and general contractor at least 10 days prior to the first date of providing materials for a project.

Though preliminary notice is not required of any other project participants, it is always a good idea to provide notification. Additionally, project participants are allowed to request notification of the filing of a Notice of Termination, or of abandonment/substantial completion of the project. If this preliminary notice is given and the owner fails to notify the claimant of the filing of a Notice of Termination/abandonment/substantial completion, the owner will be liable for the claimant’s attorney’s fees.

Working Unlicensed Could Effect How Much A Project Participant Gets Paid

Licensing laws in Louisiana are unique. While it is not required that project participants are licensed, it is recommended. If project participants are unlicensed, the licensing board may only recover the “minimum value” of work completed on the project.

Notary is No Longer Required in Louisiana

Unlike many states, Louisiana mechanics lien law has been amended and no longer requires the a mechanics lien be notarized. It does require however, that after being filed, a copy of the lien statement is sent to both the property owner and general contractor (if applicable)

Written by Scott Wolfe Jr See original article at Louisiana Mechanics Lien Law: 5 Things to Know Originally posted on the LIEN

The size of your company will determine whether this post is applicable. Figuring out whether a centralized credit department is a good choice only applies to companies with more than one location.

Advantages to a Centralized Credit Department

Many companies have credit departments. If a company has multiple locations, it has to decide if each location will will manage credit separately. If each location does not manage their own separate credit issues, one office will have to undertake the credit management for the entire company. This is called a centralized credit department.

There are multiple advantages to having a centralized credit department. Having a central hub in charge of these decision allows a certain group of people (or just one person) to have all eyes on credit issues. The credit department makes sure that the credit applications are proper, that the intake information is sufficient, and makes the final determination authorizing an extension of credit to the potential client.

Further, after credit is extended, a centralized credit department is in the best position to uniformly implement the lien policy, including notices and liens, to gain security. Then, after the debt becomes due, it will send out letters saying that the debt is due and can contact an attorney to file suit on the old debt. Imagine how difficult it would be to keep all of this systematic and applied in a uniform manner if many locations were undertaking the process at once.

Having one section of the company (at one location) that deals with credit issues, is often times better because the knowledge is specialized and deadlines can be tight. Further, when working with vendors such a Zlien or the credit attorney, there will be only one point of contact. Decentralization can cause delay.

Disadvantages to a Centralized Credit Department

There can also be disadvantages to a centralized credit department, however. Often times the relationship with clients is sensitive due to the ongoing business relations. If a credit department, which does not deal with the clients on a regular basis, contacts a client who has an overdue debt, it could strain the working relationship. At times this is fine, but other times good clients can be contacted by mistake. We all know its easier to keep clients that it is to find new ones.

Having a credit department in each location may avoid this potential peril. This is usually a small advantage compared to the disadvantage of all of the education and training you would have to give each location if you want to have a credit department locally.

Which is Better for Your Company?

The short answer is, it all depends. Generally a centralized credit department is better. This is for both small and large companies. Its always best to have a specific department who focuses on one aspect of the business. This department is accountable for making decisions to give out credit and when to collect on bad debt. They know the vendors and attorneys who can make collection possible.

Another helpful article on this very topic is by Michael C. Dennis.

Related articles

• Credit Department: What Does a Credit Department Do?
• Credit Management: Legal Tricks To Make Extending Credit Easier
• Credit Policy: Are Credit Checks Mandatory If Lien Policy Is Strong?

Written by Seth Smiley See original article at Credit: One Centralized Credit Department for All Locations? Originally posted on the LIEN

Ownership of a property can change frequently, and those transfers of ownership can happen before, during, or after construction. This can cause serious headaches in states, like Florida, in which some parties are required to send a notice to owner prior to filing a valid lien. Is a subcontractor or supplier on a Florida project required to constantly monitor who owns the property and send a notice to owner each time the property changes hands, or is sending a notice to the original owner enough to satisfy the requirement as to a later owner? Further, and more related to this case, what happens if a party contracts directly with the owner of a property (and so is not required to send a preliminary notice to owner), and the property then changes hands? Since the lien claimant no longer has contracted directly with the property owner, is a notice to owner required at that point – and if so, what about the deadlines? A recent Florida court of appeals case recently shed some light on this issue.

Notice to Owner Requirements in Florida

The statute only dictates that such notice be sent to “the owner”. Additionally, if the owner has designated a person “in addition to himself or herself to receive a copy of such lienor’s notice” (an owner’s designee) then the subcontractor or supplier must also serve the preliminary notice upon this party as well.

Since the statute only provides that the notice must be given to the property owner (and owner’s designee), and does not address what a lienor should do if the property changes hands, no statutory guidance is provided as to what should occur in that instance. In the event of a property transfer, multiple questions arise, including questions of role, repetition, and timing: 1) Does the potential lien claimant’s role in the project change for the purposes of notice requirements if the property changes hands (such that the potential lien claimant no longer has a contract with the property owner)?; 2) If the potential lien claimant was already required to provide notice, should the lien claimant give the notice to the party who owned the property prior to the statutory deadline for providing the notice only, or should the lien claimant also give notice to the property owner who owns the property at the time the lien is to be filed?

Recent Case Partially Clarifies Notice to Owner Requirements

The potential ambiguity of the statute has required Florida courts to settle multiple disputes as to the preliminary notice’s exact requirements. In fact, on March 27, 2013, the District court of Appeal of Florida, Fourth District issued an opinion in Marble Unlimited, Inc. v. Weston Real Estate Investment Corporation providing at least some clarification of the notice to owner requirements under Florida law.

The basic facts of the case are as follows: Beginning in 2003, the plaintiff, Marble Unlimited (“Marble”), entered into several contracts with the defendant, Weston Real Estate Investment Corporation, to complete renovations of several buildings in a condominium complex. In 2006, the same parties entered into two more contracts for renovations to additional buildings in the complex. At some point prior to 2008, the ownership of the property was transferred from Weston Investment, to Weston Development. In 2008, Marble filed mechanics liens, and initiated a foreclosure suit naming both Weston Investment and Weston Development, the latter being the owner of the property at the time of suit. The trial court dismissed the lien claims because Marble had not provided a preliminary notice to owner.

The appeals court noted that, pursuant to Florida law, lien claimants with a direct contractual relationship (in privity) with the property owner is not required to send a preliminary notice to owner. The appeals court noted that, after Weston Investment contracted as the owner of the property, it’s subsequent transfer of the property to an associated corporation could not trigger a new duty on Marble’s part to provide a preliminary notice to owner. The court postulated that, if allowed, this would be akin to allowing a corporate shell-game in which corporations could frustrate potential lien claimants by constantly changing the ownership of the property.

Takeaways from Marble Unlimited

Really, the takeaways from Marble Unlimited are few. While the case is important, and provides some protection to certain parties, the case is narrow in application. A property owner cannot avoid a suit to foreclose on a mechanics lien merely by transferring property ownership to a related or associated owner, and the transfer of the property to a related owner will not trigger preliminary notice requirements that were previously not required.

It would be interesting to see if the decision would be the same if the new owner was not associated with the original owner, and, if a new duty to provide a preliminary notice to owner is required in that case, whether the deadline to provide the notice would reset.

If a Florida court decides that issue, we’ll let you know.

Written by Nate Budde See original article at Notice to Owner: Florida Court Provides Some Clarification Originally posted on the LIEN

Nevada mechanics lien law can get complicated. This post will point you in the right direction with “5 things to know” about Nevada mechanics lien law.

Most Project Participants Have Nevada Mechanics Lien Rights

Nevada mechanics lien law is especially inclusive. As long as a party provided labor and/or materials worth $500 or more, they likely have Nevada mechanics lien rights. Parties provided protection include contractors, subcontractors, suppliers, equipment lessors, architects, engineers, surveyors, geologists are all allowed lien rights. Even consultants performing work at the project sire may be allowed rights!

The only project participants with a hoop to jump through are suppliers. Suppliers only have lien rights if the materials provided are actually used for the project. It is not enough for materials only to be delivered to the property – they must be used and/or consumed into the project.

Further, it is worth noting that if the potential lien claimant is required to be licensed by Nevada for the type of work performed, that party may only claim a Nevada mechanics lien if he is licensed as required.

Deadline to File a Nevada Mechanics Lien May Be Quick

A mechanics lien in Nevada must be filed with the county recorder (in the county where the property is located) within 90 days of the date the lien claimant last provided labor and/or materials to the project, or 90 days from the project’s completion or termination – whichever is later. However, if a Notice of Completion is filed, the time in which to file a Nevada mechanics lien is cut by more than half to only 40 days from the filing of the Notice of Completion.

On residential projects, a Notice of Intent to Lien must be sent to the property owner 15 days prior to filing the lien. Unlike many other states, the service of this notice in Nevada extends the time for filing the lien by 15 days.

Preliminary Notice is Generally Required

Typically all project participants are required to send a Notice of Right to Lien within 31 days of the date that labor and/or materials were first provided. Individuals exempt from this preliminary notice are parties who contracted directly with the property owner and wage laborers. The Notice of Right to Lien must be sent to both the property owner and the general contractor.

Residential project require an additional notice to be sent. As noted above, a Notice of Intent to Lien is required to be sent to the property owner 15 days prior to filing a lien on a residential project – and the service of this notice extends the lien filing period for 15 days.

Although general contractors are generally not required to send preliminary notice, the State Contractors Board may assess a penalty if a copy of the lien information notice has not been delivered to each subcontractor.

A Copy of the Nevada Mechanics Lien Must be Provided to Owner and General Contractor

In Nevada, not only it is required that a mechanics lien be recorded at the county recorder in the county where the property is located, a copy of the lien must also be sent to both the property owner and the general contractor via certified mail with return receipt requested within 30 days from the date the lien was filed. Failure to send a copy of the lien to the property owner may result in the lien being invalidated, and failure to send a copy of the lien to the general contractor may result in disciplinary proceedings against the subcontractor.

There May Be Opportunity for the Reimbursement of Some Fees

Generally, a lien includes the amount of an unpaid contract, subtracting any deductions or credits and adding any change orders. While fees such as attorney’s fees and filing costs are not to be included in the lien, sometimes they are awarded to a project participant in a successful foreclosure action. Reasonable overhead and lost profits might also be included by the court. It is important to note, however, that Nevada mechanics lien law specifically prohibits the recovery of consequential damages.

Written by Scott Wolfe Jr See original article at Nevada Mechanics Lien Law: 5 Things to Know Originally posted on the LIEN