Contractor and those directly employed by contractor as sub, laborer or material suppliers. Sub-subcontractors and suppliers to subs are not entitled to lien. ALSO, note that subs’ and suppliers’ liens are limited to the contract funds owing at the time they give their final notice, unless the owner takes one of the improper actions set out below in the “special notes” section. Per Schor, architects also have lien rights. [40-303.01; Schor at §§52.03 and 52.03[B]]
1. Who May Have A Lien?
Private:
Public:
Laborers, subs and material suppliers, per Schor limited to those supplying general or first-tier sub. Includes lessors of equipment. [2-201.02, 2-357.02; Schor at §52.02[D]]
2. What Is The Lien Against?
Private:
The building and its lot, including all the ground necessary to use and enjoyment of it. But note that sub’s and supplier’s liens are actually limited to the amount owed to the general at the time the notice is given to owner, and are limited to the funds themselves, except in the situations outlined at the end of this summary, in the “special notes” section. [40-301.01]
Public:
Payment bond. [2-201.01; 2-357.02] Apparently if the public body does not require the prime contractor to post a payment bond, then the District will be liable. [Schor at §52.02[A]]
3. Who Must Give The Preliminary Notice?
Private:
All claimants when there is an amount due and owing, while there are still contract funds unpaid to the general contractor. [40-303.02]
Public:
A Preliminary Notice is not required.
4. To Whom Is The Preliminary Notice Given?
Private:
To the owner.
Public:
Not applicable.
5. When Must Preliminary Notice Be Given?
Private:
It must be received when there is an amount outstanding to the claimant, but still some contract funds remaining unpaid to the general contractor. A lien is limited to the amount unpaid to the contractor at the time the owner receives the notice, but if the owner timely receives the notice, it will create a presumption that any subsequent payments to the general contractor are not made in good faith, which may, in turn, give them lien rights. [40-303.02]
Public:
Not applicable.
6. Contents of Preliminary Notice.
Private:
Written notice of the amounts due to the claimant. [40-303.02]
Public:
Not applicable.
7. How Must Preliminary Notice Be Given?
Private:
No method specified, but it would be advisable to give the notice in a way that includes a receipt. The notice is only effective if and when it is received. [40-303.02]
Public:
Not applicable.
8. Who Must Give Interim Notice?
Private:
An interim notice is not required.
Public:
An interim notice is not required.
9. Who Must Give Final Notice?
Private:
All claimants. [40-301.02; 40-303.03; 40-303.03]
Public:
Anyone having direct contractual relationship with sub but not with contractor supplying bond. [2-201.02, 2-357.02]
10. To Whom Is Final Notice Given?
Private:
-Office of the Recorder of Deeds, to be recorded in the land records.
-Owner. [40-301.02, 40-303.03]
Public:
Contractor. [2-201.02, 2-357.02] It is also recommended to give a copy to the surety. [Schor at §52.02[E]]
11. When Is Final Notice Given?
Private:
Recorded in the Office of the Recorder of Deeds during the construction or within 90 days after completion or termination of the project, whichever is EARLIER, and sent to the owner within five business days after it is recorded. Note that the sooner the lien is filed the better, because the claimant is limited to the amount owed to the general at the time of the owner receives the notice of the lien. If nothing is due or to become due to the contractor, then the lien is unenforceable, even if the reason that nothing is due is because of a breach of contract by the contractor. NOTE, HOWEVER, that where the owner pays the contractor in advance of the time agreed to in the contract, thus leaving an insufficient amount to cover the lien, then the property will remain subject to the lien. But once the notice has been filed and received by the owner, then the owner is required to withhold sufficient funds to cover the claim. [40-301.02, 40-303.02, 40-303.03; 40-303.04, 40-303.06; Schor at §52.03[C]]
Public:
Received within 90 days of claimant’s last furnishing labor or materials. [2-201.02, 2-357.02]
12. How Is Final Notice Given?
Private:
To the Recorder of Deeds:
Filed.
To the Owner:
By the contractor:
Certified mail to the owner. If the certified mail is returned to the claimant unclaimed or undelivered, the claimant must post a copy of the notice at or on the project real property in a location generally visible from some entry point to it.
By all other claimants:
Served on the owner by leaving a copy with the owner or his agent, if the owner or agent is a resident of the District. If neither can be found, post the notice on the premises. [40-301.02, 40-303.03]
Public:
For projects in excess of $100,000: Personally served or served by other form of receipted transmittal that confirms actual delivery to the contractor at any place the contractor maintains an office or conducts its business or at the contractor’s residence. [2-357.02]
For all other contracts: Mail by registered mail (if the contracting agency is one of the executive agencies under the direct control of the mayor) or by registered or certified mail (if it is with a different D.C. entity) to the contractor at office or residence or served in a manner in which the United States marshal is authorized to serve summons. The statute is not clear as to the impact of non-acceptance of service; it appears that ensuring actual receipt is advised. [2-201.02]
13. Contents of Final Notice
Private:
-A Notice of Intention of claimant to hold a lien on the property hereby declared to such lien
-Name and address of the contractor or the contractor’s registered agent. If the wrong name is used, the lien is void. [McNair Builders, Inc. v. 1629 16th Street, L.L.C., 968 A.2d 505 (D.C.,2009)]
-Name and address of the property owner or the owner’s registered agent
-Name of the party against whose interest the lien is claimed
-The amount claimed, less any credit for payments received up to and including the date of the notice of intent. Note that the amount is limited to the amount owed to the general contractor at the time the claimant gives the final notice. (There is an exception where the claimant requests from the owner information about the general contract, and the owner fails to provide accurate information, in which case the claimant’s claim will not be limited to the amount owed to the general. [40-303.05])
-Description of the work done, including the dates that work was commenced and completed;
-A description of the material furnished, including the dates that material was first and last delivered
-A legal description and, to the extent available, a street address of the real property. If the property is misidentified, the lien is void. [McNair Builders, Inc. v. 1629 16th Street, L.L.C., 968 A.2d 505 (D.C.,2009)]
-If the claimant is organized in D.C. or doing business in D.C., then the notice must include a copy of the claimant’s current license to do business in the District issued by the Department of Consumer and Regulatory Affairs; and a certificate of good standing from the Department of Consumer and Regulatory Affairs issued within 180 days prior to the date of the filing of the notice of intent
-If the claimant is organized in another state requiring licensing by a governmental entity, then the notice must include a copy of the claimant’s current license to do business issued by the government of the other jurisdiction; and a certificate evidencing the claimant’s good standing in its place of business or state of incorporation issued by the other jurisdiction
-If the project is provided under a home improvement contract, a copy of the home improvement contract
-A sworn, notarized statement affirming under penalty of perjury and upon personal knowledge that: (i) the contents of the notice of intent are true and correct to the best of the claimant’s information and belief; and (ii) the claimant has a right to recover the amount claimed.
–NOTE that if the notice of intent is executed by an authorized representative or counsel of the contractor, he or she shall attach evidence of his or her authority to execute the notice of intent on behalf the claimant and shall affirm that the notice of intent is true and correct to the best of the affiant’s knowledge and belief. [40-301.02, 40-303.12]
Public:
-Amount claimed
-Name of party to whom labor or material was furnished or supplied. [2-201.02, 2-357.02]
14. Time to Start Suit / Foreclose?
Private:
Within 180 days after recording notice of intent. Within 10 days of filing suit, the claimant must also file a notice of pendency of action. [40-303.13]
Public:
More than 90 days after last supplying labor and materials, but less than one year after final delivery. [2-201.02, 2-357.02]
