Hawaii State Lien Law Summary

Claimants supplying labor or materials to the general or its 1^st-tier subs, but possibly ALL furnishers of labor or materials are covered. [507-42; Schor at §12.03[B]] NOTE that contractors and subs must be licensed in order to have lien rights or the right to sue for breach of contract, and a sub or sub-sub will only have lien rights if the general and first-tier sub were licensed. There is, however, a new exemption to the licensing rule for owners or lessees who build or improve their own residence or farm, or those of the members of their immediate family, as long as the buildings are not being offered for sale or lease, unless the sale or lease is to an employee of the owner, is due to hardship, or the repairs cost less than $10,000. There is a process set out for obtaining this exemption that must be followed. Note that the owner-builder must still hire licensed subs, and all electrical and plumbing work must still be done by licensed electricians or plumbers. [444-22; 507-49(b); 444-2.5; 444-A] For materials supplied to a project on property that was primarily RESIDENTIAL before im­prove­ments began, a supplier has lien rights only as long as they sup­plied to a LICENSED gen­er­al or sub, and as long as the credit ex­tended was not unreason­ab­le. On these residential projects, it is essential that a sup­pli­er obtain a credit ap­plica­tion from its cus­tom­er, and it is strongly ad­vised that supplier make some reason­able inquiry into customer’s credit sta­tus, pri­or to selling to custom­er.  Note also that where a supplier is aware of a contractor’s precarious financial situation, the supplier has a duty to warn the owner. If the supplier fails to warn the homeowner, they may not be allowed to enforce their lien against the homeowner. [507-49; Reliable Collection Agency, Ltd. v. Aquarius Indus., Inc., 5 P.2d 129 (1975)]

All suppliers of labor or material to the contractor. NOTE THAT this statute is intended to follow the federal statute, the Miller Act, and any questions of interpretation should be resolved by reviewing interpretations of that statute. [103D.324] NOTE ALSO that various state and county agencies have adopted regulations that elaborate on the statute and administrative rules. These are available through the Div. of Public Works, Dept of Accounting and General Services for the State of Hawai’i; the Divisions of Air and Water Transportation for the State of Hawai’i, and the General Conditions of Construction Contracts of the City and County of Honolulu, Dept. of Finance. It would be advisable to check with whatever public body is letting the contract to find out if they have any supplemental regulations. [Schor update at §12.01]

The improvement and the interest of the owner. [507-42]

The contractor’s payment bond. [103D-324]

A licensed general contractor contracting with a homeowner or lessee on a contract involving home construction or improvements to residential property, including condominiums and cooperatives. These notices apparently must be given even where the homeowner is a sophisticated developer, fully educated about lien and bond rights. [444-25.5; 808 Development, LLC v. Murakami, 141 P.3d 996 (Hawaii, 2006)]

A preliminary notice is not required.

The homeowner or lessee. The notices must be given even where the homeowner is a sophisticated developer, fully educated about lien and bond rights [444-25.5; 808 Development, LLC v. Murakami, 141 P.3d 996 (Hawaii, 2006)]

Not applicable.

Verbal notice is given prior to entering into the contract with the homeowner or lessee or at the time of signing the contract. Written notice is given before any work is performed, as it is part of the written contract, which must be executed before any work is performed. [444-25.5]

Not applicable.

Per a recent case, attorney fees and interest are not lienable. [Hill v. VNS Corp., 764 S.E.2d 876 [Ga.App. 2014)

Not applicable.

Verbally, and then given to the homeowner or lessee in the form of a written contract. [444-25.5]

Not applicable.

An interim notice is not required.

An interim notice is not required.

All claimants. Takes form of “Application for a Lien” and “Notice of Lien.” [507-43] NOTE that a claimant may also file a Notice of Pendency of Action, which is recorded at the Bureau of Conveyances and which puts potential buyers of the property on notice that a claim has been made against the property. If, however, the lien is dismissed, the claimant – and possibly the claimant’s attorney – may be faced with a claim for slander of title or malicious prosecution. [Isobe v. Sakatani,279 P.3d 33 (HI App. 2012)] Note, however, that the lien is not automatically in place once it is filed. Notice is retur­nable 3-10 days after ser­vice, at which time a hear­ing is held to deter­mine whether probable cause ex­ists to permit the lien to at­tach. Only if the court finds probable cause does the lien attach. [507-43(a)]

Every claimant. [103D-324] As stated above, it is advisable to check with the public body letting the contract to see if there are any supplemental regulations. [Schor update at §12.01]

-Owner(s) and person(s) contracting for improvements, and

-General contractor.

-Apply for the lien at circuit court. [507-43] NOTE that a claimant may also file a Notice of Pendency of Action, which is recorded at the Bureau of Conveyances and which puts potential buyers of the property on notice that a claim has been made against the property. If, however, the lien is dismissed, the claimant – and possibly the claimant’s attorney – may be faced with a claim for slander of title or malicious prosecution. [Isobe v. Sakatani,279 P.3d 33 (HI App. 2012)]

The contractor and the surety. [103D-324]

The notice must be received not later than 45 days after date of com­pletion of project. If notice of completion is published and an affidavit of publica­tion is filed with the cir­cuit court clerk, then “date of com­pletion” is date the owner or general completes publi­cation of notice of and filing of affidavit. If notice is not filed or pub­l­ished with­in a year of ac­tual comple­tion or aban­don­ment, then “date of comple­tion” is one year after actual completion or aban­donment. [507-43(b)]

The notice must be received within 90 days after claimant last furnishes labor or materials. [103D-324]

-Filed with the court.

-Served on owner(s) and people contracting for the work, in the manner prescribed for service of summons, but if any of these people can’t be served, then by posting on the improvement. Actual receipt of the notice if possible, or else posting, is required. Notice is retur­nable 3-10 days after ser­vice, at which time a hear­ing is held to deter­mine whether probable cause ex­ists to permit the lien to at­tach. Only if the court finds probable cause does the lien attach. In that case, the court then issues an Order Directing Lien to Attach. If the property in question is registered in the land court, AND if the lien is not solely against the interest of lessees of time share interests, then the claimant must file a certified copy of that Order with the office of the assistant registrar of the land court. [507-43]

Sent by registered or certified mail, or any manner authorized for serving summons. [103D-324]

-Amount of claim

-Labor or material furnished

-Description of property sufficient for identifica­tion

-Any other matter necessary to a clear understanding of the claim

-Name of assignor, if assigned

-Names of parties contract­ing for work

-Name of general contractor

-Name(s) of owner(s) and any­one with interest in the property

-Mortgages and other en­cumbrancers and general con­tractor’s surety may be named.

Notice of Lien: Sets forth alleged facts by virtue of which the claimant claims a lien. [507-43]

NOTE that a claimant may also file a Notice of Pendency of Action, which is recorded at the Bureau of Conveyances and which puts potential buyers of the property on notice that a claim has been made against the property. If, however, the lien is dismissed, the claimant – and possibly the claimant’s attorney – may be faced with a claim for slander of title or malicious prosecution. [Isobe v. Sakatani,279 P.3d 33 (HI App. 2012)]

-The amount claimed

-The name of the party to whom the labor or materials were furnished or supplied. [103D-324]

Within 3 months after entry of Order Directing Lien to Attach. [507-43, 507-47]

More than 90 days but less than one year after the claimant’s final delivery to the project. [103D.324]