Federal Court CLE - Eisenhower Carlson PLLC

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Transcript Federal Court CLE - Eisenhower Carlson PLLC

Darren R. Krattli
Eisenhower Carlson PLLC
Mechanics’ and Materialmen’s Liens: Start to Finish
RCW 60.04
Main: (253) 572-4500
Direct: (253) 620-2537
1201 Pacific Ave, Suite 1200
Tacoma, Washington 98402
RCW 60.040.21
Any person furnishing:
Professional Services,
or Equipment
for the improvement of real property
shall have a lien upon the improvement
for the contract price of the labor,
services, materials, or equipment
furnished at the insistence of the owner,
or the agent or construction agent of
the owner
Contract Price = amount agreed upon
by the contracting parties OR the
customary and reasonable charge
Construction Agent = a registered or
licensed contractor, subcontractor,
architect, engineer, or other person
having charge of any improvement
to real property, who is deemed
the agent of the owner for the
limited purpose of establishing
liens under 60.04
Subject of lien = land improved and
the improvement
Priority = as of commencement of
M&M Liens: What are they?
Basic Rule – must provide the
owner notice in writing of the
right to claim a lien
Prime Contractor – must also
provide to the Prime
Contractor if he complies
RCW 19.27.095 (permitting)
RCW 60.04.230 (jobsite notice)
RCW 60.04.261 (permit posting)
RCW 60.04.031
Failure to comply = no lien
Prime Contractor =
contractor who contracts
directly with the owner or
the owner’s agent, and
assumes primary
responsibility for the
creation of an improvement
M&M Liens: Notice Requirements
Timing – anytime, but only
effective 60-days prior to
sending (10 days if new SFR
RCW 60.04.031(1)
Form: RCW 60.04.031(4)
• Certified or registered mail, or
• Personal delivery, but need
proof (signed acceptance /
affidavit of service)
M&M Liens: Notice Methods
1) Deal directly with the owner /
common law agent (non
2) Labor only liens
3) Deal directly with the Prime
Contractor – BUT if non-visible
work on existing owner-occupied
SFR, must notify owner
RCW 60.04.031(2) and (3)
Prime Contractor Exception
• Non-visible = Professional
services, and provision of
materials or equipment
• Effective date – Notice to
the owner is effective upon
receipt (not retroactive)
• Lien limit – lien is limited to
balance remaining due to
the prime contractor
M&M Liens: Notice Exceptions
Professional Services:
RCW 60.04.031(5)
No improvement visible – can record
If not recorded, lien is junior to other
interested parties without actual notice
of the services
Form – RCW 60.04.031(5)
Professional services =
surveying, mapping,
inspecting, testing,
architectural, engineering,
or other similar services
M&M Liens: Notice Exceptions
Timing = within 90 days of completion
of work
Work in furtherance of original
contract can extend completion
date (change orders, warranty
FILE EARLY – untimely is ineffective
Form = RCW 60.04.021(2)
Must be signed by the claimant or
someone authorized to act on his
Must state that the claim has been
Under penalty of perjury
RCW 60.04.071
Timing – by structure if
residential improvement
Details required:
Claimant ID
Date work began/ended
ID of debtor
ID of owner
Property description
(address is OK, but
COMPLETE legal description
is best)
• Amount due (by parcel)
Method = Record with county auditor
M&M Liens: Claiming the Lien
Timing – Must commence action to
foreclose within 8 months of recording
RCW 60.04.141
Venue – Superior court of relevant county
Foreclosure suit – similar to judicial
mortgage foreclosure:
• Determine debt due
• Determine lien priority
• Sheriff’s sale
• Excess proceeds go to junior liens
RCW 60.04.181(3) – Only
potential award of attorney’s
fees, so be sure to include
fee provision in contracts
M&M Liens: Enforcement
Release – Must release lien upon payment
and upon demand
RCW 60.04.071
Failure to release = attorney’s fees
and damages if delay is unjustified
Frivolous claim = lien claim made without
reasonable cause OR excessive
Can result in attorney’s fee award
M&M Liens: Risks
RCW 60.04.081
Retaliation – threats to withhold future contracts
made by a contractor to discourage lien filings =
Consumer Protection Act Violation – attorney’s
fees, treble damages, etc.
Assignable – You can sell your rights
Owner can deduct lien amounts from
payments to prime contractor
Notice to Lender – Can force lender to
withhold amount due from borrower in future
loan draws
Bond – owner can bond around lien claim, forcing
contractor to foreclose to receive recovery
RCW 60.04.035
RCW 60.04.151
RCW 60.04.221
RCW 60.04.161
M&M Liens: Other issues