Why should I file a Contractor’s Lien?
A contractor’s lien is a means of ensuring you are paid for labor and/or materials you put into a person’s property. Although the filing of a lien does not guarantee payment, it does prevent the owner from selling the property without paying the lien amount or posting a bond around it. A validly filed lien also allows you the right to force the sale of the property you worked on to collect the amount you are owed from the proceeds of the sale.
Who Can File a Contractor’s Lien?
Because of the potential serious consequences of foreclosing on a lien, Washington law imposes strict requirements on who can file a lien, and the procedure for doing so. In most cases, you must be properly registered as a contractor in order to file a lien. The work you performed must have been ordered by the owner (as opposed to a tenant). And you must provide the legally-required notice to your customer of the potential of a lien and the customer’s rights before you start work on the project. With some minor exceptions, this pre-work notice of lien rights is required even if you don’t go forward with filing a lien.
What Must Be Contained in the Notice?
Washington has a standard lien notice form that is required to be provided to your customer prior to performing work on the project. There are versions for general contractors and subcontractors that are available for downloading off of the L&I website, http://www.lni.wa.gov. The notice serves to alert the property owner that if he or she doesn’t pay your bill, or if you fail to pay your subcontractors or suppliers, a lien can be filed against the property. The notice generally advises the homeowner on how to avoid liens or obtaining lien waivers upon payment.
What Happens When I File a Lien?
If you have provided the requisite notice, and have a legal basis to file a lien, the next step is to file a Claim of Lien for the amount owing for unpaid labor or materials. You must file your claim within 90 days of the last date you were performing labor or providing materials on the owner’s property. The claim should be recorded in the county where the property is located. It will then show up on any title report obtained on the property. You also need to send a copy of the Claim to the owner by certified or registered mail within fourteen days of the date the lien was filed for recording.
Oftentimes providing the owner with a copy of the recorded lien claim will be sufficient to obtain payment. However, if the owner continues to fail to pay you, you can file a lawsuit to foreclose on the lien. Should you choose to proceed with foreclosure, this must be done within eight months of recording.
Woodinville Law offers the information in this article as a resource for general information that relates to our areas of practice. This article is not intended, and should not be considered, to be a source of legal advice. You should not rely on this information and always should seek competent legal advice from an attorney licensed in your jurisdiction.
The information contained in this article is not an invitation to create an attorney-client relationship, and transmission and receipt of the information does not constitute an attorney-client relationship. While we make every reasonable effort to provide accurate information, the information is not guaranteed to be complete or to reflect the most current legal developments at the time of publication.