Washington law is clear as to who may assert a private works lien claim, which is contained in RCW 60.04.021:
“…any person furnishing labor, professional services, materials, or equipment for the improvement of real property shall have a lien upon the improvement for the contract price of labor, professional services, materials, or equipment furnished at the instance of the owner, or the agent or construction agent of the owner.”
Moreover, a construction agent of the owner is defined as:
“…Any registered or licensed contractor, registered or licensed subcontractor, architect, engineer, or other person having charge of any improvement to real property, who shall be deemed the agent of the owner for the limited purpose of establishing the lien created by this chapter.”
One goal of the statute was to help insulate property owners from construction liens filed by unregistered contractors or handymen. In addition, suppliers selling to unregistered contractors would be barred from asserting a lien since their customer was not deemed to be an agent of the owner. That is one reason why it is so important to verify contractor registration status for Washington projects, which can be viewed at:
https://secure.lni.wa.gov/verify/
But what happens when the project owner is a public agency, such as a school board, state college, water district, county, etc.? Does RCW 60.04.021 even apply? In order to determine that answer we have to look at the statutes governing public works projects: 39.04 RCW and RCW 60.28.011.
Interestingly, the statute relating to Washington public works projects does not preclude a bond or retainage claim by a material supplier if their customer, or even the general contractor are not registered. The public works statute only prohibits a government agency from entering into a contract with an unregistered contractor.
While we are discussing Washington State projects, what about federal construction projects, whose requirements are laid out in the Miller Act? Here we find a parallel situation in that contractor registration is not required. By default, that means suppliers or subcontractors working for an unregistered contractor are not barred from asserting a claim under the Miller Act.
So, what is the implication for material suppliers furnishing to public works projects within the State of Washington, or to federal projects? Should suppliers even bother to check on contractor registration status prior to approving sales on public works projects. We believe suppliers should continue with a verification process. One reason for checking is that the Labor and Industries site will also show if there are any claims against the contractor and if so, the number and amounts of those claims. This review can assist the credit manager in managing risk.
If you have any questions about the registration requirements, please feel free to call Seth Chastain, Esq., or Ted Levy, Paralegal and we would be glad to try and field those questions. Our telephone number is: 206-626-5444
At Levy | von Beck | Comstock | P.S., we have a proven track record of collecting debts – whether large, small, secured, or unsecured – for our many creditor clients dating back to 1984. Over the past 15 years alone, we have recovered on average over $8 million each year just in principal. Here are the totals for those 15 years:
Principal Recovered and Returned To Clients: $124,533,875.96
Late Charges Recovered and Returned To Clients: $463,210.11
Attorney’s Fees Recovered and Returned To Clients: $234,389.88
