The Stay at Home Order Does Not Affect Lien Deadlines
On March 23, 2020, Governor Jay Inslee, as many other states’ governors have done since, issued a “Stay Home – Stay Safe” order affecting all Washingtonians. This order effectively halted a significant portion of pending construction projects throughout Washington. In a statement issued on March 25, 2020, Governor Inslee clarified that the only construction projects that could proceed despite the stay at home order were those:
- related to essential activities as described in the order
- that furthered a public purpose related to a public entity or governmental function or facility, and
- that were necessary to prevent spoliation and avoid damage or unsafe conditions and address emergency repairs.
The order put a moratorium on all other construction activities.
Does this order halt lien deadlines?
Owners, lenders, contractors, laborers, and suppliers have understandably been confused about whether the stay at home order has any effect on liens and their related deadlines. The order forced so many projects to stop that it would make sense for corresponding lien deadlines to toll accordingly. Well, that is not the case. The stay at home order has absolutely no effect on liens and their accompanying deadlines. In Washington, liens still must be recorded against the subject property within 90 days of the last day of work on or supply of materials to the project, and liens still must be foreclosed within 8 months of recording notwithstanding the stay at home order.
These circumstances create dilemmas for potential lien claimants. A project may only be stalled because of the stand-down order. Once the project starts back up and the potential lien claimant again furnishes work or supplies materials to the project, lien deadlines would be refreshed. Should lien claimants incur the cost of recording liens to protect their rights in such circumstances? The answer is Yes.
Although many projects may start back up once the Governor lifts the stay at home order, some may not. Liens provide incredibly valuable security for claimants’ right to payment and can often mean the difference between getting paid in full and getting nothing. By giving up lien rights, a supplier of labor or materials to a project could be foregoing that valuable security. Potential lien claimants should carefully consider the risks before foregoing lien rights. If the potential lien claimant cannot accept the risk of not getting paid, the lien claimant should probably protect its lien rights despite assurances that the project will start back up after the governor’s order is lifted.
To protect those rights, lien claimants must make sure they send all appropriate preliminary notices, track the first and last days they furnished work or supplied materials to the project, and timely record their liens.