Lien Rights in the Pacific Northwest
With construction still booming in the Pacific Northwest despite countervailing economic forces at play, we will likely see an increase in late payments and defaults to our creditor clients who provide labor or materials on these projects. Fortunately, we can usually file a mechanic’s lien that gives our clients a powerful security interest in the property where the project is being built. Specifically, in Washington, “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.” See RCW 60.04.021.
Because lien claims are governed by statute, lien claimants must strictly comply with the statute’s requirements or risk their right to file a lien and eventually foreclose the lien on the property.
Any contractor, material supplier, or other individual or entity furnishing materials or labor on a property should review RCW Ch. 18.27 and RCW Ch. 60.04 and consult with legal counsel. Here are some provisions in those statutes that should be given significant attention:
- Any contractor agreeing to perform work to four or fewer residential units when the bid totals $1,000 or more must provide the customer a disclosure statement. See RCW 18.27.114.
- With a few exceptions, every person or entity furnishing services, materials, or equipment for the improvement of real property must give the property owner notice in writing of its right to claim a lien within a specified period of time. See RCW 60.04.031. (Sending this preliminary notice or “prelien” is a critical step that our clients have us take as a matter of course on every)
- A mechanic’s lien must be filed within 90 days from the date of last performing labor or delivering materials to the property. See RCW 60.04.091.
- Generally, an action to enforce and foreclose on a mechanics lien must be initiated within 8 months form the lien’s filing. See RCW 60.04.141.
Failing to abide by these and other requirements may bar you from filing a lien against the project property. Keep in mind that an action to foreclose on a mechanics lien entitles the filing party to their attorneys’ fees and costs under RCW Ch. 60.04. However, an action for breach of contract does not always allow the filing party to recover their fees and costs.
Many of these procedural formalities contain intricacies that can easily be missed. Please don’t hesitate to contact our office if you have any questions about preserving your lien rights.