Maryland State Lien Law Summary

Supplier of labor or mater­ial to owner, general or sub of apparently any tier. NOTE that employees of subcontractors may have a claim, and a lien release executed by a subcontractor does not release the claim of the subcontractor’s employees. [9-105; Judd Fire Protection, Inc. v. Davidson, 138 Md. App. 654, 773 A.2d 573 (2001)] Building and landscape architects, engineers, surveyors, and certified interior designers are also covered, as are equipment lessors. [9-102] NOTE ALSO that a foreign corporation must be registered or qualified to do business in Maryland in order to establish a lien. [Snavely Inc. v. Wheeler, 538 A.2d 324 (1988); Schor at §21.03[J]]

Every furnisher of labor, materials, or rental equipment to contractor, sub­contractor or sub-sub. Suppliers to suppliers are not protected. Engineers, surveyors, etc., at least where their work is provided after the bond has been executed, will be covered. [17-101, 17-108; Atlantic Sea-Con, Ltd. v. Robert Dann Co., 582 A.2d 981, 321 Md. 275 (1990); Peerless Ins. Co. v. Board of county Com’rs for Prince George’s County, 237 A.2d 15 (1968)]

Land covered by building and convenient space around it, or the machine, wharf, or bridge that is erected, constructed, or repaired. NOTE that a lien against an owner-occupied single-family residence is limited to the amount of the unpaid contract funds owed by the owner to the general contractor at the time the preliminary notice is received. Where a tenant either erects or repairs or improves a building to the extent of at least 25% of its value, then there will be a lien against the tenant’s interest. [9-103, 9-104]

Payment bond. [17-108]

There is also a procedure on a state procurement contract for construction whereby a subcontractor who is not paid is to give written notice to the procurement officer overseeing the contract. This procedure uses the procurement officer to attempt to require a contractor to pay the sub, and can result in payment of the unpaid amount as well as a penalty of up to $100 per day. It does not replace the claim against the bond, however. [15-226]

All subcontractors and suppliers of labor or materials. [9-104]

A preliminary notice is not required.

To owner. In general, where there is more than one owner, notice to any one owner is sufficient, HOWEVER, on a condominium project, a claimant is required to give its notice of intent (the preliminary notice) to ALL of the condominium owners, in order to establish its lien against the entire condominium building. Giving notice to the condominium’s property management company is insufficient, although it may be allowed where there is clear evidence indicating that an agency relationship existed between the property management company and all condominium owners. [9-104; Southern Management Corp. v. Kevin Willes Const. Co., Inc., 856 A.2d 626, 382 Md. 524 (2004)]

Not applicable.

Notice must be received within 120 days after claimant last furnishes work or materi­als. BUT NOTE THAT for sin­gle-family dwelling on owner’s land for owner’s residence, the notice must be received within 120 days AND before owner makes full payment to gen­eral. Also note that on an owner-occupied single-family dwel­ling, the lien amount is limit­ed to the amount due on the contract at the time the prelien is received, so the sooner it is given, the better. (Note that this includes repairs and improvements to residences.) [9-104; Schor at §21.03[I]; See Mardirossian Family Enterprises v. Clearail, Inc., 596 A.2d 1018, 324 Md. 191 (1991); Ridge Heating, Air Conditioning and Plumbing, Inc. v. Brennen, 762 A.2d 161 (Md.App.,2000)] For a subcontractor, timely mailing the notice MAY be sufficient where the notice is received in ordinary course of the mail after the deadline, but it is not advised to rely on that. Recommend sending it in enough time to allow for posting if the mailing is refused. If the mail is refused or not picked up, then timely and properly mailing will not be sufficient service. [9-105(a)(1)(v); Riley v. Abrams, 412 A.2d 996 (1980); Mardirossian Family Enterprises v. Clearail, Inc., 596 A.2d 1018 (Ct.App. 1991)]

Not applicable.

Please contact Levy von Beck & Associates for more information regarding this notice.

Not applicable.

-Registered or certified mail, return receipt requested, or personally delivered by claimant or claimant’s agent. [9-104(c)]

-If notice cannot be mailed or served, by posting on building in the presence of a competent witness. Schor recommends taking a photograph of the notice as posted, to eliminate any possible questions.

[9-104(e); Schor at §21.03[I]]

Not applicable.

An interim notice is not required.

An interim notice is not required.

Every claimant. [9-105] NOTE that merely filing a lien does not waive the right to arbitration. [Brendsel v. Winchester Const. Co., Inc., 898 A.2d 472 (2006)] NOTE that a lien is not established at the time of filing; it is established at the show cause hearing that takes place after the petition has been filed and served. In addition, if, prior to establishing the lien, legal title has been granted to a bona fide purchaser for value, (e.g., the property is sold,) then the property is EXEMPT from a lien. [9-102]

Any person having direct contractual relationship with a sub or sub-sub but not with the general. NOTE ALSO that any claimant who wants to obtain a certified copy of the bond itself or a certified statement of the other security provided, must give an affidavit as discussed below. [17-108(b) and (c)]

On a state project, where a contractor receives a progress or final payment but does not timely pay a subcontractor, the subcontractor needs to notify the state procurement officer of the nonpayment. [15-226]

-Clerk in circuit court for county where land is located.

-Apparently to the owner, after the show cause order is issued. [9-105(a); Schor at §21.03[H]] NOTE that where a lien is against a condominium, notice must be given to all condominium owners before the lien can be established against the entire building. [Southern Management Corp. v. Kevin Willes Const. Co., Inc., 856 A.2d 626 (Md.2004)]

BOND CLAIM:

To general contractor. [17-108(b)]

TO OBTAIN A COPY OF THE BOND OR OTHER SECURITY:

To the Comptroller or the officer in charge of the office where the payment security or evidence of security is required to be filed. [17-108(c)]

STATE JOB, CONTRACT FUNDS:

To the State procurement officer. [15-226]

Received within 180 days after last delivery. NOTE that filing this notice leads to a show cause order being issued, with a date for hearing set within 45 days after the order is issued, so strongly recommend having local counsel lined up before filing the final notice. [9-105(a)] NOTE ALSO that if, prior to the establishment of a lien (which occurs at the show cause hearing after the petition has been filed and served), legal title has been granted to a bona fide purchaser for value, then the property is exempt from a lien, so it is advisable not to wait until the last minute to file the petition. [9-102] NOTE, however, that the day of a foreclosure sale is the last day marks the close of the period in which any creditor can acquire a lien upon the debtor’s interest in the land. Redland Genstar, Inc. v. Mahase, 841 A.2d 413, 155 Md.App. 72 (2004). NOTE that on owner-occupied single-family residential projects, the lien amount is limited to the unpaid contract funds owed by the owner to the general contractor. [9-104]

BOND CLAIM:

Within 90 days of claimant’s last fur­nishing of labor or material. NOTE that the notice apparently needs to be RECEIVED within that time, and not merely SENT within that time. [17-108; Schor at §21.02[E]]

TO OBTAIN A COPY OF THE BOND OR OTHER SECURITY:

No specific time.

STATE JOB, CONTRACT FUNDS:

Received more than ten days after the contractor has received payment from the state, if the claimant remains unpaid. [15-226]

File petition in circuit court for county where land is located. [9-105]

It is apparently served on the owner after the show cause order is issued.

BOND CLAIM:

Certified mail to contrac­tor’s residence or office. The consequence of refusal to accept delivery is not clear, so it is recommended that claimant makes sure it is received. [17-108]

TO OBTAIN A CERTIFIED COPY OF THE BOND OR OTHER SECURITY:

No method specified.

STATE JOB, CONTRACT FUNDS:

No method specified. It will not, of course, be effective until received. Refusal of delivery is not likely to be a problem. [15-226]

Three types of documents must be filed together:

1) Petition, including:

-Name and address of petitioner (claimant);

-Name and address of owner (Note that where the project is a condominium and the claimant wishes to have a lien on the entire building, all owners should be named);

-Nature or kind of work done, or kind and amount of material furnished;

-Name of person for whom work done or material furnished;

-Time when work was done or materials furnished;

-Amount claimed (AND NOTE that the amount of the lien may not be increased by amending it, especially after the notice period has expired; NOTE ALSO that on an owner-occupied single-family dwel­ling, the lien amount is limit­ed to the amount due on the contract at the time the prelien is received);

-Description of land and building adequate for iden­tification, including a statement as to whether part of the land is located in another county;

-If claimant is a subcon­tractor, facts show­ing that the pre­liminary notice was served, mailed or posted;

-Where claim against two or more buildings or separ­ate lots owned by the same person, petitioner must des­ignate amount claimed due on each building, or else lose priority over any other mechanics’ liens.

-Should also state that the building was improved to the extent of at least 15% of its value, or that the claimant’s work was part of an overall project improving the building to the extent of at least 15% of its value.

-This Petition must be under oath of the claimant or someone on the claimant’s behalf. The Affidavit may substitute for this oath. [Schor at §21.03[J]; MD Rules of Civil Procedure 12-302] Recommend entitling the petition the “Petition to Establish and Enforce Mechanics’ Lien,” and include a request for enforcement, to eliminate the necessity of later filing a separate petition to enforce the lien. [Schor at §21.03[J]]

2) Affidavit by claimant or someone on claimant’s behalf, setting forth facts upon which lien is claimed in amount specified.

3) Proof: Either original, sworn, certified or photostatic copies of all material papers which constitute the basis of lien claimed, un­less the absence thereof is explained in the affidavit. These papers attached should include the written contract, call change orders, all invoices, breakdown of all payment requisitions, and an itemized statement of account. [9-105, 9-112, Rule 12-303 (formerly BG72); Schor at §21.03[J]]

BOND CLAIM:

-Amount claimed

-Name of party to whom material or labor furnished. [17-108(b)]

NOTE that prior oral conversations cannot render effective an otherwise ineffective notice, especially if the notice does not reference those prior conversations. [CTI/DC, Inc. v. Selective Ins. Co. of America, 392 F.3d 114 (C.A.4 Md.2004)]

To obtain a certified copy of the bond or other security:

An affidavit verifying that the claimant has supplied labor or materials but has not been paid or is being sued under this section. There may also be a fee required. There is no provision for anyone other than the claimant to sign the affidavit. [17-108(c)]

STATE JOB, CONTRACT FUNDS:

-Name of the contractor, the project under which the dispute exists, and the amount in dispute

-Itemized description of the facts on which the amount is based

-If known, an explanation for any dispute concerning payment by the contractor. [15-226]

The final notice is itself actually a petition to establish lien, filed with the court. A show-cause hearing follows. The right to enforce the lien expires one year after the petition to establish the lien was filed. NOTE that for a condominium project, the complaint must name all property owners in the condominium. [9-109, 9-106; Southern Management Corp. v. Kevin Willes Const. Co., Inc., 856 A.2d 626, 382 Md. 524 (2004)]

More than 90 days but less than one year of final acceptance of the work per­formed under the contract. [17-109]

There is no provision for filing suit to enforce a procurement officer’s decision. [15-226]