Over the weekend, a reader sent in an interesting question about Washington’s preliminary notice requirements. The question relates to construction work and materials furnished to a condominium complex, specifically inquiring as to who must receive the preliminary notice on such projects?
Condominium construction projects presents complex legal issues in the mechanics lien context because property ownership is convoluted, especially as they relate to the common elements. This post explores how preliminary notice and mechanics lien regulations apply to condominium projects in Washington state.
Why Ownership Matters When Sending A Washington Preliminary Notice
Prior to dissecting who exactly owns a condominium for the purposes of mechanics lien and preliminary notice compliance, it’s important to discuss why ownership even matters.
Like most states, Washington has a preliminary notice requirement. This means a preliminary notice document must be delivered to certain parties to preserve the right to later file a mechanics lien.
Each state varies as to when the notice must be sent and to whom. In Washington, the notice must typically be sent within 60 days of first furnishing materials or labor on private projects, and it must always be sent to the property owner.
[pullquote style="left" quote="dark"]In fact, it’s pretty well settled in Washington law that potential lien claimants have an obligation to perform some degree of diligent research to ascertain who the property owner is, although the degree of research required is a bit unclear.[/pullquote] Knowing who the property owner is, therefore, is a key piece of information.
In fact, it’s pretty well settled in Washington law that potential lien claimants have an obligation to perform some degree of diligent research to ascertain who the property owner is, although the degree of research required is a bit unclear. Compare, for example, Schumacher Painting Co v. First Union Mgt, Inc. (Service on reputed property owner did not satisfy need to serve true property owner within 90 days) with Mutual Sav. & Loan Ass’n v. Johnson (Lien claimant held not required to exercise high degree of diligence in ascertaining legal owner).
Finding the property owner on a regular project is hard enough. Since condominiums have so many owners and a complex web of shared ownership, zeroing in on an owner here may be even more difficult.
Who Receives Preliminary Notice on an Condominium Project
Enough background, let’s get to the question at hand. You’re furnishing labor or materials to a condominium. The condo complex has multiple owners. Who receives the notice?
The answer to this question will vary depending on where you’re working at the condominium.
Working on Specific Condominium Units
A condominium complex is a group of individually owned residential housing units. Each unit has an individual and unique owner, as well as a tax parcel number, legal description, address and the like. It can be separately bought and sold from other units within the complex.
In the mechanics lien context you have to stop thinking about these units as part of a group, and just treat them like any other residential property. Each individual unit is an individual and separate property. Each has a unique property owner.
Therefore, when sending preliminary notice, if you’re working on a specific condominium unit, you must deliver the notice to that specific unit’s owner. If you’re working within multiple units, you must send the notice to each units’ owner because while each of the units are close together and part of the same building, you’re actually on completely different “projects” with each unit.
This view that each residential unit within a condo complex would be considered a separate project is supported by RCW § 60.04.101:
When furnishing labor, professional services, materials, or equipment for the construction of two or more separate residential units, the time for filing claims of lien against each separate residential unit shall commence to run upon the cessation of the furnishing of labor, professional services, materials, or equipment on each residential unit, as provided in this chapter.
Working on Condominium’s Common Elements
While a condominium complex contains separate residential units with separate residential owners, they also contain commonly shared components of the building referred to as the “common elements.” Hallways, garages, elevators, lobbies, meeting areas and pools are all examples of standard common elements of a condominium complex.
Typically, these common elements are owned by all of the residential unit owners in proportion to the square footage of each unit over the whole. So, for example, if a complex contains 10 units, and each unit is 100 square feet, each condo unit owner would own 10% of the common elements.
If you’re furnishing labor or materials to repair, renovate or construct one of these shared common elements, who is considered the owner? Must you send a notice to each and every unit owner since they are all percentage owners of the common elements? That would be a high burden, considering some complexes have hundreds of units.
[pullquote style="right" quote="dark"]My gut is that you could serve the notice on the condo association. Unfortunately, however, I was surprised that I could not find any support for this in the statute or case law.[/pullquote]My gut instinct here is that you could serve preliminary notice on the condo association. The association is clearly the agent for all of the unit owners, and in all likelihood, it is the association who would be commissioning the work on the common elements. Unfortunately, however, I was surprised that I could not find any support for this interpretation in the statutes or case law.
RCW § 60.04.031 clearly requires that preliminary notice must be to “the owner or reputed owner.” There isn’t any forgiveness to this requirement or any discussion of notifying an owner’s agent, except that in the statute’s paragraph (2)(A) a party is completely exempt from sending the notice if they contracted with the owner or the owner’s agent.
This question will ultimately get before a judge, and hopefully the judge will interpret § 60.04.031 to allow claimants to send preliminary notice to the owner’s agent, especially in a case like a condominium project. If you’re not willing to take that risk or if you like to play it safe, though, the safe practice is to send notice to each and every unit owner.
Working on a new Condominium Project
It’s worth making a final note about new condominium construction projects. When a new condominum complex is being constructed, a lot of these issues are not relevant. That’s because the project is still likely owned by a single developer and not the individual unit owners. The condo declarations are likely not even filed, and therefore, there isn’t even a condo association.
In such a case, preliminary notice and lien filings are easy. The whole complex is one big property just like anything else.