__

(Owner, Lessee or Agent)

Name and business address of the person who drafted this instrument:

_

_ ___ County, Michigan

(Notary Public)                                              

My Commission Expires: __, 20

To: (Owner)                                                                   Date of mailing: __

  (Owner’s address)

This is to inform you that (name of subcontractor or material supplier) has begun to provide (description of services or materials) ordered by (contractor) for improvements to property you own. The property is located at (property address).

A lien may be claimed for all services and materials furnished to you if this notice is given to you within 20 days after the date on which the services or materials described are first furnished to you. If the notice is not given within that time, a lien is enforceable for only the services or materials furnished within the 20-day period before the date on which the notice is given. However, if a regulated lender has provided the funds for the services or materials described in this notice, the notice may be given 45 days after the date the service or materials are first furnished to you. If the notice is not given within that time, a lien is enforceable for only the services or materials furnished within the 45-day period before the date the notice is given.

Even if you or your mortgage lender have made full payment to the contractor who ordered these services or materials, your property may still be subject to a lien unless the subcontractor or material supplier providing this notice is paid. THIS IS NOT A LIEN. It is a notice sent to you for your protection in compliance with the construction lien laws of the State of Montana.

This notice has been sent to you by:

(Name)

(Address)          

(Telephone)      

IF YOU HAVE ANY QUESTIONS ABOUT THIS NOTICE, FEEL FREE TO CALL US.

IMPORTANT INFORMATION ON REVERSE SIDE

IMPORTANT INFORMATION FOR YOUR PROTECTION

Under Montana’s laws, those who work on your property or provide materials and are not paid have a right to enforce their claim for payment against your property. This claim is known as a construction lien.

If your contractor fails to pay subcontractors or material suppliers or neglects to make other legally required payments, the people who are owed money may look to your property for payment, even if you have paid your contractor in full.

The law states that all people hired by a contractor to provide you with services or materials are required to give you a notice of the right to lien to let you know what they have provided.

WAYS TO PROTECT YOURSELF ARE:

—RECOGNIZE that this notice of delivery of services or materials may result in a lien against your property unless all those supplying a notice of the right to lien have been paid.

—LEARN more about the construction lien laws and the meaning of this notice by contacting an attorney or the firm sending this notice.

—WHEN PAYING YOUR CONTRACTOR for services or materials, you may make checks payable jointly to the contractor and the firm furnishing services or materials for which you have received a notice of the right to lien.

—OBTAIN EVIDENCE that all firms from whom you have received a notice of the right to lien have been paid or have waived the right to claim a lien against your property.

—CONSULT AN ATTORNEY, a professional escrow company or your mortgage lender. Lien is effective for one year from filing. Thereafter it lapses unless prior to expiration of one-year period claimant files a one-year continuation of notice. Such continuation must contain clerk and recorder file number; date of original filing, name of person to whom notice originally given.

(b) Contents of Lien Notice. The form for the lien is as follows:

CONSTRUCTION LIEN

I, (name and address of person claiming the construction lien), claim a construction lien pursuant to Title 71, Chapter 3, of the Montana Code Annotated.

I claim this lien against (give sufficient description of the real property against which the lien is claimed to identify it). The contracting owner is (name of the person who owns the real estate and name of the person who entered into the contract to improve it).

At the request of (name and address of party with whom person claiming the lien contracted to furnish services or materials), I provided the following: (description of the services or materials provided). The amount remaining unpaid is (amount unpaid; if no amount was fixed by the contract, give your good faith estimate of the amount and identify it as an estimate).

I first furnished these services or materials on (date) and last furnished services or materials on (date; if the date has not yet arrived, insert an estimate of the date on which services or materials will be last furnished and identify the date as an estimate).

I gave notice of the right to claim a lien as required by §71-3-531 on (date) to (name of contracting owner). [If it is not required to give a notice of the right to claim a lien, state the reason it is not required.]

The Notice of the Right to Claim a Lien, when properly filed, is valid for a period of one year from the date of the filing. The notice lapses upon the expiration of that one-year period, unless the lien claimant files with the Clerk and Recorder a one-year Continuation of the Notice of the Right to Claim a Lien prior to the date on which the first notice will lapse. If a Notice of the Right to Claim a Lien is required, a construction lien claim may not be asserted unless there is an unexpired Notice of the Right to Claim a Lien or an unexpired Continuation Notice, properly filed with the Clerk and Recorder at the time the lien claimant files the construction lien. The Continuation Notice must contain certain required information: (a) the Clerk and Recorder’s file number of the notice; (b) the date on which the notice originally was filed; and (c) the name of the person to whom the original notice was given. (Mont. Code Ann. §71-3-531).

Extent of Lien: A construction lien extends to the interest of the contracting owner in the real estate, as the interest exists at the commencement of work or is thereafter acquired in the real estate, subject to the following provisions: (1) if an improvement is located wholly on one or more platted lots belonging to the contracting owner, the lien applies to the improvement and to the lots on which the improvement is located; (2) if an improvement is not located wholly on one or more platted lots, the lien applies to the improvement and to the smallest identifiable tract or parcel of land on which the improvement is located; (3) if the improvement is to leased premises, the lien attaches to the improvement and to the leasehold term; except as provided in the following, it does not attach to the lessor’s interest unless he contracted for or agreed to the improvement before it was begun; (4) (a) a construction lien is not impaired to the extent of the value of the work or improvement that is severable from the real estate if the improvement is to premises held by: (i) a contracting owner who owns less than a fee simple interest; or (ii) a lessee and the lease is forfeited by the lessee; (b) if the work or improvement may be removed without harm to the rest of the real estate, the lienholder may have the value determined, the work or improvement sold separately, and the proceeds delivered to him to satisfy the construction lien. The purchaser shall remove the work or improvement within 45 days of the sale; (5) if a contracting owner contracts for improvements on real estate not owned by him as part of an improvement on his real estate or for the purpose of directly benefiting his real estate, there is a lien against the contracting owner’s real estate being improved or directly benefited in favor of persons furnishing services or materials to the same extent as if the improvement had been on the contracting owner’s real estate. (Mont. Code Ann. §71-3-525).

Priority of Lien: A construction lien has priority over any other interest, lien, mortgage or encumbrance that may attach to the building, structure or improvement or on the real property on which the building, structure or improvement is located and which is filed after the construction lien attaches. An interest, lien, mortgage or encumbrance that is filed before the construction lien attaches has priority over a construction lien, provided that the value of the work or improvement is not severable, or provided that prior interest was not taken to secure advances for the purpose of paying for the particular real estate improvement being liened. There is equal priority between or among construction lien claimants who contribute to the same real estate improvement project, regardless of the date on which each lien claimant first contributed services or materials and regardless of the date on which he filed his notice of lien. When the proceeds of a foreclosure sale are not sufficient to pay all construction lien claimants in full, each claimant will receive a pro rata share of the proceeds based on the amount of his respective lien. Construction liens attaching at different times have priority in the order of attachment. (Mont. Code Ann. §§71-3-541, 71-3-542).

Case of Note: In Signal Perfection, LTD v. Rocky Mountain Bank-Buildings, 2009 WL 3628027 (Mont. Nov. 3, 2009), a developer had taken out a construction loan to fund the construction of a $55 million casino and restaurant. The bank had recorded a trust indenture on the property. During construction, the entire loan was exhausted. Five months later, an audio and video systems contractor filed a mechanic’s lien on the property for non-payment. The Court ruled that the mechanic’s lien could take priority over the construction loan security, noting that the bank could have protected itself by providing lien waivers or by not making the loan. The principal distinction was whether the deed of trust was created in order to purchase the property or to remodel the property.

Lien Foreclosure Action: A legal action must be filed within two years from the date of the filing of the construction lien. If successful, the lien claimant may recover lien recording and filing fees, as well as a reasonable attorney’s fee. (Mont. Code Ann. §§71-3-551, 71-3-562).

Lien for Improvement of Oil or Gas Well: Liens are created and perfected in the same manner as mechanic’s liens except that filing statement must be within six months of completion of work. (Mont. Code Ann. §71-3-1004).

Statutory Citation: Montana Code Annotated, Title 71, Chapter 3, Part 5, §§71-3-521 to 71-3-564, 71-3-1004.

NEBRASKA

Who May Claim: Any person who furnishes services, labor, or materials pursuant to a real estate improvement contract. A real estate improvement contract is a contract that is made for the purpose of producing a change in the physical condition of land or of a structure. This includes: (1) altering the surface by excavating, filling, grading or changing a bank or flood plain of a stream, swamp, or body of water; (2) construction or installation on, above or below the surface of the land; (3) demolition, renovation, repair or removal of an existing structure or installation; (4) seeding, sodding or other landscaping operation; (5) surface or subsurface testing, boring or analyzing; and (6) preparation of plans, surveys, or architectural or engineering plans or drawings for any change in the physical condition of land or structures whether or not used incident to producing a change in physical condition of the real estate.

How Claimed: A claimant may record a lien which shall be signed by the claimant and state: (a) real estate subject to the lien, with a description thereof sufficient for identification; (b) name of the person against whose interest in the real estate a lien is claimed; (c) name and address of the claimant; (d) name and address of the person with whom the claimant contracted; (e) general description of the services performed or to be performed or materials furnished or to be furnished for the improvement and the contract price thereof; (f) amount unpaid, whether or not due, to the claimant for the services or materials, or if no amount is fixed by the contract, a good faith estimate of the amount designated as an estimate; and (g) time the last services or materials were furnished or if that time has not yet occurred, an estimate of the time. 

Where Recorded: Register of Deeds of county where land is situated.

When to Be Recorded: A claimant’s lien does not attach and may not be enforced unless, after entering into the contract under which the lien arises and not later than 120 days after his or her final furnishing of services or materials, he or she has recorded a lien. The claimant must send a copy of a recorded lien to the contracting owner within 10 days of recording.

Notices: (a) Notice of Commencement. Must be signed by contracting owner and denominated notice of commencement. It must state the real estate being or intended to be improved or directly benefited, with a description sufficient for identification; the name and address of the contracting owner, his or her interest in the real estate and the name and address of the fee simple title holder, if other than the contracting owner; and that if after the notice of commencement is recorded a lien is recorded as to an improvement covered by the notice of commencement, the lien has priority from the time the notice of commencement is recorded. The notice of commencement may state its duration, but if a duration is stated of less than six months from the time of recording, the duration of the notice is six months. If no duration is stated, the duration is one year after recording. The notice of commencement may state that it is limited to a particular improvement project, or portion thereof, on the real estate. But the limitation is not effective unless the particular improvement, or portion thereof, to which it applies is stated with sufficient specificity that a claimant, by reasonable inquiry, can determine whether his or her contract is covered by the notice of commencement. A contracting owner may extend the duration of a notice of commencement by recording before the lapse thereof a continuation statement signed by him or her which refers to the record location and date of recording of the notice of commencement and states the date to which the notice of commencement’s duration is extended.

(b) Notice to Protected Owner. At any time after a claimant has entered into the contract under which he or she may claim a lien under the Nebraska Construction Lien Act, he or she may give notice of the right to assert a lien to the contracting owner. The notice of the right to assert a lien must be in writing, state that it is a notice of a right to assert a lien against real estate for services or materials furnished in connection with improvement of the real estate, and contain: the name of the claimant and the address to which the owner or others may send communications to the claimant; the name and address of the person with whom the claimant contracted; the name of the owner against whom a lien is or may be claimed; a general description of the services or materials provided or to be provided; a description sufficient to identify the real estate against which the lien is or may be claimed; a statement that the claimant is entitled to record a lien; the amount unpaid to the claimant for services or materials, whether or not due, or if no amount is fixed by the contract, a good faith estimate of the amount designated as an estimate; and the following statement in type no smaller than that used in providing the other information included in this notice:

Warning: If you did not contract with the person giving this notice, any future payments you make in connection with this project may subject you to double liability.

Duration of Lien: An enforceable lien continues to be enforceable for two years after recording of the lien. If an owner, holder of a security interest, or other person having an interest in the real estate gives the claimant written demand to institute a judicial proceeding within thirty days, the lien lapses unless within thirty days after receipt of the written demand, the claimant institutes judicial proceedings or records an affidavit that the total contract price is not yet due under the contract for which he or she recorded the lien.

Filing Fee: $10 for the first page and $6 for each additional page.

Extent of Lien: If at the time a construction lien is recorded there is a recorded notice of commencement covering the improvement pursuant to which the lien arises, the lien is on the contracting owner’s real estate described in the notice of commencement.

If at the time a construction lien is recorded there is no recorded notice of commencement covering the improvement pursuant to which the lien arises, the lien is on the contracting owner’s real estate being improved or directly benefited.

If a claimant who recorded a lien while there was no recorded notice of commencement covering the real estate later records a notice of commencement, his or her lien is on the contracting owner’s real estate described in the notice of commencement.

A lien for furnishing materials only arises if the materials are used with the intent that they be used in the course of construction or incorporated into the real estate improvement contract that is the basis of the lien. This intent must be shown by the contract of sale, the delivery order, delivery to the site by the claimant or at the claimant’s direction, or by other evidence. The claimant must also prove either: (1) the materials furnished are incorporated into the improvement or consumed as normal wastage in construction operations; (2) the materials furnished were specially fabricated for incorporation into the improvements and are not resalable in the ordinary course of business, even if they weren’t incorporated into the improvements; (3) the materials furnished were used in the construction of the improvement and are not remaining in the improvement; or (4) the materials furnished are tools, appliances or machinery used on the particular improvement. The delivery of materials to the site of the improvement, whether or not by the claimant, creates a presumption that they were used in the course of construction or were incorporated into the improvement. A lien arising for the supplying of tools, appliances, or machinery is limited as follows: if the tools were rented, the lien is limited to the reasonable rental value for the period of actual use or reasonable periods of non-use; if the tools were purchased, the lien is limited to the purchase price only if they were purchased for that particular improvement and have no substantial value to the purchaser after completion of the project.

For a prime contractor, the lien is for the unpaid part of his or her contract price. Except as against a protected party contracting owner, the lien of a party other than the prime contractor is for the amount unpaid under that party’s contract. For a party other than the prime contractor as against a protected party contracting owner, a lien is for the lesser of two amounts: (1) the amount unpaid under claimant’s contract; or (2) the amount unpaid under the prime contract through which the claimant claims at the time the contracting owner receives the claimant’s notice of the right to assert a lien.

Equitable Remedies: The Supreme Court of Nebraska has held that the existence of a construction lien does not preclude an unjust enrichment or a quasi-contract recovery for work or materials covered by a construction lien. Due to the lack of statutory intent to preclude such claims, contractors may proceed to make equitable claims despite the existence of a construction lien. Bloedorn Lumber Co. v. Nielson, 300 Neb. 722, 731 (2018).

Priority of Lien: Liens attaching at the same time have equal priority, and share the amount received at foreclosure in the same ratio as the ratio that the particular lien bears to the total of all liens attaching at the same time. Liens attaching at different times have priority in order of attachment. A claimant who records a notice of commencement after he or she has recorded a lien has only equal priority with claimants who record a lien while the notice of commencement is effective.

Lien for Improvement of Oil or Gas Well: Any person, who shall under contract with the owner of any leasehold interest held for oil or gas purposes or the owner of any pipeline perform any labor, furnish any material or services used or employed or furnished to be used or employed in the drilling or operating of any oil or gas well upon such leasehold interest or in the construction of any pipeline or in the constructing of any material so used, employed, or furnished to be used or employed, shall be entitled to a lien under Nebraska Code Sections 57-801 and 57-820. Any such person shall be entitled to such lien whether or not a producing well is obtained and whether or not such material is incorporated in or becomes a part of the completed oil well, gas well, or pipeline, for the amount due him for the performance of such labor or the furnishing of such material or services. This shall include, without limiting the generality of the foregoing, transportation and mileage charges connected therewith. 

Statutory Citation: Nebraska Revised Statutes, Chapter 33, §33-109; Chapter 52, §§52-125 to 52-159; Chapter 57, §57-802.

NEVADA

Who May Claim: Every person who furnishes labor, materials, or equipment valued at $500 or more to be used in the construction, alteration, or repair of any building, improvement, or other structure is entitled to assert a claim of lien upon said property, improvements and buildings. (NRS §§ 108.2214(1), 108.222(1)). If the person requesting the improvements to be made is a lessee, a person who asserts a lien against the property will also have a lien against any construction disbursement account the lessee is required to establish pursuant to NRS § 108.2403. (NRS § 108.222(1)). In addition to those lien rights, all miners, laborers and others who furnish labor, materials, or equipment in the amount of $500 or more upon any mine or upon any shaft or tunnel or other excavation have a lien upon the mine. (NRS §§ 108.2214(1), 108.222(1)). Architects, engineers, land surveyors and geologists who perform services for a work of improvement are also considered lien claimants. (NRS § 108.2214(1)). If a license is required to furnish the work requested, only a contractor licensed pursuant to Nevada statute may have a lien as described above unless one of the exemptions to licensure found in NRS § 624.031 is applicable. (NRS §108.222(2); Tom v. Innovative Home Sys., LLC, 132 Nev. Adv. Op. 15, 368 P.3d 1219, 1223 (Nev. App. 2016)).

In any case where a mechanic’s lien attaches to any of the foregoing buildings, structures, or other improvement it also attaches to the land upon which the building, structure, or improvement stands. If the person requesting the improvements to be made to the property is not the property owner, a lessee, for example, the improvement to the property will nonetheless be considered to have been made for the owner’s benefit unless the owner files a Notice of Nonresponsibility pursuant to the requirements of NRS § 108.234(2)-(4). (NRS § 108.234). This presumption extends to each owner claiming any interest in the subject property. (NRS § 108.234(1)).

Notice of Right to Lien: The first notice required to perfect a lien is the Notice of Right to Lien. All lien claimants, except those who perform only labor, who are potential claimants under NRS § 608.150, or who contract directly with the owner, must deliver to the owner of the property a Notice of Right to Lien personally or by certified mail. (NRS § 108.245(1), (5)). A subcontractor’s or equipment or material supplier’s failure to deliver a Notice of Right to Lien to the owner invalidates any lien rights the subcontractor or equipment or material supplier may have had for materials or equipment furnished or for work or services performed (NRS § 108.245(3)), unless the subcontractor or equipment or material supplier can establish that the owner of the property had “actual knowledge” that the subcontractor or equipment or material supplier furnished labor, materials or equipment to the work of improvement. (Hardy Const. v. SNMARK, LLC, 126 Nev. 528, 245 P.3d 1149 (2010)). A lien claimant who is required to give a Notice of Right to Lien and who gives such notice has a right to lien for materials or equipment furnished or for work or services performed in the 31 days before the date of the Notice of Right to Lien through the completion of the project. (NRS § 108.245(6)). A subcontractor or equipment or material supplier must also serve, in person or by certified mail, a copy of the Notice of Right to Lien to the prime contractor, but failure to do so does not invalidate the subcontractor’s or equipment or material supplier’s lien rights. (NRS § 108.245(1)). The Notice of Right to Lien does not create a lien. (NRS § 108.245(2)).

Contents of Notice of Right to Lien: A Notice of Right to Lien must be substantially the following form:

NOTICE OF RIGHT TO LIEN

To:

(Owner’s name and address)

The undersigned notifies you that he or she has supplied materials or equipment or performed work or services as follows:

(General description of materials, equipment, work or services) for improvement of property identified as (property description or street address) under contract with (general contractor or subcontractor). This is not a notice that the undersigned has not been or does not expect to be paid, but a notice required by law that the undersigned may, at a future date, record a notice of lien as provided by law against the property if the undersigned is not paid.

(Claimant)

15-Day Notice (Residential Project Only): On projects involving the construction, alteration or repair of multifamily or single-family residence, a lien claimant must deliver, in person or by certified mail, to the owner and the prime contractor, if any, a 15-day Notice of Intent to Lien before recording a Notice of Lien. (NRS § 108.226(6)). The 15-day Notice of Intent to Lien must incorporate substantially the same information required in a Notice of Lien and is a statutory prerequisite to recording a Notice of Lien on residential projects. (Id.). The 15-day Notice of Intent to Lien must be served 15 days before the recording a Notice of Lien.

How Claimed: To perfect a lien, a lien claimant must record a Notice of Lien. (NRS § 108.226(1)).

Where Filed: County Recorder of the county where the property or some part of it is situated. (Id.).

When to Be Filed: Every person claiming a lien shall record his Notice of Lien not later than 90 days after the completion of the work or improvement; or 90 days after the last delivery of material; or 90 days after last performance of labor, whichever is last to expire. (Id.). However, if owner records and serves a notice of completion in the manner required by NRS § 108.228, the Notice of Lien must be recorded within 40 days after the owner’s recording. (NRS § 108.226(b)). When perfecting a lien against a residential construction project, the 15-day Notice of Intent to Lien adds 15 days to the 90-day deadline a lien claimant has to record a Notice of Lien. (NRS § 108.226(6)).

Service of Notice: In addition to the recording, a copy of the Notice of Lien must be served upon the owner within 30 days after recording by personal delivery, certified mail, or if there is no address for the owner by additional means set out in NRS § 108.227. Subcontractors must also deliver a copy of the Notice of Lien to the prime contractor. (NRS § 108.227(3)).

Duration of Lien: Foreclosure proceedings must be commenced within six months after filing; this requirement may be extended by an agreement to extend such time, so long as such an agreement: (i) does not exceed an additional six months; (ii) is signed by the owner of the property; and (iii) is recorded against the property. (NRS § 108.233).

Recording Fee: First page $7; each additional page $1.

Contents of Lien Claim: The Notice of Lien must be in substantially the following form:

Assessor’s Parcel Numbers

NOTICE OF LIEN

The undersigned claims a lien upon property described in this notice for work, materials, or equipment furnished for the improvement of the property:

(1) The total amount of the original contract is:                                             $__

(2) The total amount of all changes and additions if any is:                           $__

(3) The total amount of all payments received to date is:                $__

(4) The amount of the lien, after deducting all just credits and offsets is:       $__

(5) The name of the owner, if known, of the property is: ___

(6) The name of the person by whom the lien claimant was employed or to whom the lien claimant furnished work, materials or equipment is: ___

(7) A brief statement of the terms of payment of the lien claimant’s contract is: ___

(8) A description of the property to be charged with the lien is: ___

                                                                                      _

                                                                                      (Print name of Lien Claimant)

                                                                                      By: _

                                                                                      (Authorized Signature)

State of __

                          ss.

County of __

_ (print name), being first duly sworn on oath according to law, deposes and says:

I have read the foregoing Notice of Lien, know the contents thereof and state that the same is true of my own knowledge, except those matters stated upon information and belief, and as to those matters, I believe them to be true.

_

(Authorized Signature of Lien Claimant)

[Notary Seal]

Priority of Lien: Liens against Property Rank in Priority as between Themselves as Follows: (1) labor; (2) material suppliers and lessors of equipment; (3) all other lien claimants if they have performed their services under contract with the general contractor; (4) all other lien claimants who did not perform their services under contract with a general contractor. (NRS § 108.236).

Priorities as between Mechanic’s and Other Liens. Mechanic’s liens are preferred to any lien, mortgage or other encumbrance which may have attached after the commencement of construction of the work of improvement, or of which the lienholder had no notice and the notice was not recorded at the commencement of construction of the work of improvement. (NRS § 108.225).

Notice of Completion: The owner may record a notice of completion and must deliver a copy in person or by certified mail to the general contractor and each lien claimant who served the owner with a Notice of Right to Lien. (NRS § 108.228).

Statutory Citation: Nevada Revised Statutes, Title 9, Chapter 108, §§ 108.221 to 108.246.

NEW HAMPSHIRE

Who May Claim: Any person performing labor, providing professional design services, or furnishing materials, to the amount of $15 or more for erecting or repairing a house or other building or appurtenance, or for building any dam, canal, bridge, sluiceway or well, other than for a municipality. “Professional design services” is defined in the statute with the services being from licensed, certified or permitted persons. There is a special statute covering building, logging and work on railroad properties and brick work, by virtue of a contract with the owner. To be entitled to a lien you must either have a contract with the owner or an agent, contractor or subcontractor of the owner. Generally, this entitles general contractors, subcontractors, professional designers and material suppliers to lien rights and will thus limit liens by sub-sub-subcontractor liens (or third/lower tier subcontractors).

How Claimed: The person must give written notice to owner that they are claiming a lien on the property. This can be accomplished at two points in time: (1) before providing the labor, professional design services, or materials; and (2) after providing the labor, professional design services, or materials (note: providing notice after providing the labor, professional design services, or materials may reduce or eliminate the subcontractor’s lien right depending on the amount the owner has paid at the time of notice). The subcontractor or material supplier must also furnish the owner an accounting in writing of the labor, professional design services or materials provided every 30 days after the notice.

Notice of Lien: No notice of lien is required to the principal contractor, but it is recommended. Subcontractor notices must be given to owner as addressed above and it is recommended that the notice be sent by certified mail, return receipt requested.

Duration of Lien: 120 days after services are performed, or materials furnished. The 120 days will start to run at the time the work required by the contract is complete (warranty work, punchlist items and items outside the scope of the contract will likely not enlarge the 120-day time period).

Filing Fee: No statutory provision.

Contents of Notice of Lien: Notice in writing that subcontractor shall claim a lien for labor and materials to be provided or for labor and materials that have been provided. While not required, it is recommended that subcontractors include the value and category of the materials furnished or services provided, or to be furnished and/or provided.

Extent of Lien: Covers land and buildings. Subcontractor’s liens are limited to the sum due the contractor by the owner at the time notice of the lien is given to the owner. Equipment suppliers (i.e., equipment that is leased for use in the construction of the project, but not incorporated into the project or consumed during the project) may have difficulty enforcing liens in NH. Trial Courts in NH have treated equipment supplier liens differently, some dissolving the liens and others allowing them to remain when challenged.

Perfecting Lien Rights: The lien shall continue for 120 days after services are performed/materials supplied. A lawsuit and request for Judicial attachment must be filed to perfect the lien against owner. Once the Court allows the attachment, it must be recorded in the registry and served by sheriff. These steps must be completed all within the 120-day window, or the lien will be lost.

Priority of Lien: A perfected lien has priority over all claims except liens on account of taxes. Among lienholders, liens take precedence in the order of their perfecting except for liens acquired in performance of a contract existing when the attachment was made, or was necessary to preserve the property, in which case they share pro rata. A bona fide purchaser who records prior to attachment has priority; no priority over construction mortgage where funds have been properly disbursed.

Statutory Citation: New Hampshire Revised Statutes, Title XLI, Chapter 447, §§447:1 to 447:14.

NEW JERSEY

Who May Claim: Any contractor (including any licensed architect, engineer or land surveyor who is not a salaried employee of the contractor or the owner), subcontractor or supplier who provides work, services, material or equipment pursuant to a written contract, shall be entitled to a lien. No lien shall attach for materials that have been furnished or delivered subject to a security agreement which has been entered into pursuant to Chapter 9 of Title 12A of the New Jersey Statutes.

How Claimed: A lien claim shall be signed, acknowledged and verified by oath of the claimant or, in the case of a partnership or corporation, a partner or duly authorized officer thereof.

Where Filed: County Clerk of the county in which real property to be improved is situated.

When to Be Filed: No later than 90 days following the date the last work, services, material or equipment was provided for which payment is claimed except that on residential construction contracts where a Notice of Unpaid Balance is filed or lodged for record (delivered to Clerk but not yet recorded) within 60 days following the date of the last furnishing of work, services, material or equipment a lien may be filed or lodged for record pursuant to an arbitration award within 120 days of the last furnishing of work, services, material or equipment. Warranty or other service calls or work, materials or equipment provided after completion or termination of a claimant’s contract shall not be used to determine the last day that work, services, material or equipment was provided. Additional statutory requirements are required for residential construction contracts.

Contents of Lien Claim: There is a statutory form provided.

Service of Copy of Lien Claim: Within 10 days following the lodging for record or filing of a lien claim, the claimant shall, by personal service or registered or certified mail, return receipt requested, postage prepaid, serve or mail a copy of the lien claim as prescribed in the Construction Lien Law to the last known business address or place of residence of the owner and, if any, of the contractor and the subcontractor, against whom the claim is asserted. An additional service must be made by regular mail at the same time.

Duration of Lien: Action to enforce the lien must be brought within one year of the date of the last provision of work, services, material or equipment, payment for which the lien claim was filed; or within 30 days following receipt of written notice, by personal service or certified mail, return receipt requested, from the owner, community association, contractor or subcontractor requiring the claimant to commence an action to establish the lien claim.

Filing Fee: Check with relevant county clerk. Pursuant to N.J.S.A. §22A:2-29, the statutory fee is now $15 for each lien claim and notice of unpaid balance, but fees vary county to county nonetheless.

Extent of Lien: The lien extends to the value of the work or services performed, or materials or equipment furnished in accordance with the contract price. The lien shall attach to the interest of the owner in the real property. Liens for the following improvements shall attach to real property only in the manner described: (a) for improvements involving a dock, wharf, pier, bulkhead, return, jetty, piling, groin, boardwalk or pipeline above, on or below lands under waters within the state’s jurisdiction, the lien shall be on the improvements together with the contracting owner’s interest in the lots of land in front of or upon which the improvements are constructed and any interest of the contracting owner of the land in the land or waters in front of the land; (b) for improvements involving removal of a building or structure or part of a building or structure from its situs and its relocation on other land, the lien shall be on the contracting owner’s interest in the improved real property on which the building or structure has been relocated; (c) for improvements involving excavation, drainage, dredging, landfill, irrigation work, construction of banks, making of channels, grading, filling, landscaping or the planting of any shrubs, trees or other nursery products, the lien shall be on the land to which the improvements are made, and shall not be upon the adjoining lands directly or indirectly benefited from the improvements. The owner’s liability is reduced by all payments made on the prime contract prior to the receipt of the construction lien.

Priority of Lien: In the event of the creation, conveyance, lease or mortgage of an estate or interest in real property to which improvements have been made that are subject to the lien provision of the Construction Lien Law, a lien claim validly filed shall have priority over any prior creation, conveyance, lease or mortgage of an estate or interest in real property, only if the claimant has filed with the county clerk prior to that creation, conveyance, lease or mortgage, a Notice of Unpaid Balance and Right to File Lien (statutory form provided). No lien claim shall attach to the estate or interest acquired by a bona fide purchaser first recorded or lodged for record; nor shall a lien claim enjoy priority over any mortgage, judgment or other lien first recorded, lodged for record, filed or docketed. All claims established by judgment shall be ordered pro rata.

Residential Construction Contracts: The lodging for record or filing of a lien for work, services, materials or equipment furnished pursuant to a residential construction contract (defined as any written contract between a buyer and a seller for the purchase of a one- or two-family dwelling or any portion of the dwelling, which shall include residential units in condominiums, any residential unit in a housing cooperative, any residential unit contained in a fee simple townhouse development, any residential unit contained in a horizontal property regime and any residential unit contained in a planned unit development) is subject to additional statutory requirements.

Statutory Citation: New Jersey Permanent Statutes, Title 2A, §§44A-1 to 45-5.

NEW MEXICO

Definition: Pursuant to New Mexico Statutes Annotated (“NMSA”) § 48-2-1, “[a] lien is a charge imposed upon specific property, by which it is made security for the performance of an act.”

Who May Claim: Pursuant to New Mexico Statutes Annotated (“NMSA”) § 48-2-2 (“Mechanics and materialmen; lien; labor, equipment and materials furnished; definition of agent of owner”), every “person” (which under NMSA § 12-2A-3 includes a “corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture or any legal or commercial entity”) “performing labor] upon, providing or hauling equipment, tools or machinery for or furnishing materials to be used in the construction, alteration or repair of any mine, building, wharf, bridge, ditch, flume, tunnel, fence, machinery, railroad, road, or aqueduct to create hydraulic power or any other structure, who performs labor in any mine or is a registered surveyor or who surveys real property has a lien upon the same for the work or labor done, for the specific contract or agreed upon charge for the surveying or equipment, tools or machinery hauled or provided or materials furnished by each respectively, whether done, provided, hauled or furnished at the instance of the owner of the building or other improvement or his agent.” Id. Under NMSA § 48-2-4, if the ownership of the real property is less than fee simple, the lien extends only to owner’s actual interest. “Every contractor, subcontractor, architect, builder or other person having charge of any mining or of the construction, alteration or repair, either in whole or in part, of any building or other improvement shall be held to be the agent of the owner for the purposes of this section.” NMSA § 48-2-2. If the contract for supply of labor or materials is equal to or greater than $5,000, then a lien claimant must also serve a preliminary notice within sixty (60) days of initially furnishing the materials and labor. See NMSA § 48-2-2.1.B (“Liens and Mortgages § 48-2-2.1. Procedure for perfecting certain mechanic’s and materialmen’s liens”). The preliminary notice must be served “by either certified mail, return receipt requested, facsimile with acknowledgement, or personal delivery…” Id. (Instead of 60 days, a 20-day service requirement applies to “Stop Notices” pursuant to § 48-2A-5.B.) New Mexico law prohibits a contractor from filing a mechanic’s lien or filing suit for unpaid construction contract claims unless licensed under the construction industries licensing law.

Pre-Lien Notices (Preliminary Notices)

Commercial projects: Pursuant to NMSA § 48-2-2.1 (Procedure for perfecting certain mechanic’s and materialmen’s liens) and NMSA § 48-2A-5 (“Stop notices; contents”), persons (subcontractors or materials suppliers) intending to claim a mechanic’s lien on private commercial projects must provide service of notice of right to lien to the owner or to the original contractor by certified mail, with return receipt requested, or facsimile transmission with acknowledgement/fax confirmation, or personal delivery. NMSA § 48-2-2.1(B). This service must be accomplished within sixty (60) days of first furnishing equipment, labor or materials (NMSA § 48-2-2.1(B)), and within twenty (20) days for Stop Notice service (NMSA § 48-2A-5.B). A notice of right to lien is not required for claims of $5,000 or less (NMSA § 48-2-2.1(B)) or for residences of four units or less (NMSA § 48-2-2.1(A)). Persons claiming a right to lien can elect to give the notice later, in which case the lien only provides security for labor performed and materials supplied during the thirty (30) day period immediately prior to the date of service of the preliminary notice (NMSA § 48-2-2.1(E)). Similarly, for late written notices preceding Stop Notices, the Stop Notice covers only the labor performed and the material supplied during the twenty (20) day period immediately preceding the later service of the preliminary notice. NMSA § 48-2A-5.C.

For Existing Residential Projects and New Residential Projects, both types of more than four units (NMSA §§ 48-2-2.1.A), and where the cost of providing equipment, labor, materials or services is $5,000 or more, NMSA § 48-2-2.1.A-B (see NMSA § 48-2A (“Stop Notices Act”) and NMSA § 48-2A-5 for “Stop notices; contents”) provides that persons (subcontractors or materials suppliers) must provide service of notice of right to lien to the owner and to parties identified by statute as required to receive notice, including the original contractor (per NMSA § 48-2-2.1 “(1) the owner or reputed owner of the property upon which the improvements are being constructed; or (2) the original contractor, if any),” by certified mail, with return receipt, or facsimile transmission with acknowledgement/fax confirmation, or personal delivery. NMSA § 48-2-2.1(B)(1)-(2). To secure payment for all labor performed and materials supplied, this service of preliminary notice must be accomplished within sixty (60) days of first furnishing equipment, labor or materials (NMSA § 48-2-2.1(B)), and within twenty (20) days for Stop Notices (NMSA § 48-2A-5(B)).

The notice must contain: “(1) a description of the property or a description sufficiently specific for actual identification of the property; (2) the name, address and phone number, if any, of the claimant; and (3) the name and address of the person with whom the claimant contracted or to whom the claimant furnished labor or materials, or both.” NMSA § 48-2-2.1(D). Again, persons claiming a right to lien can elect to give the notice later, in which case the lien only provides security for labor performed and materials supplied during the thirty (30) day period immediately prior to the date of service of the preliminary notice (NMSA § 48-2-2.1(E)). Similarly, for late written notices preceding Stop Notices, the Stop Notice covers only the labor performed and the material supplied during the twenty (20) day period immediately preceding the later service of the preliminary notice. NMSA § 48-2A-5.C.

Lien Claims: How Claimed. By filing verified lien claim.

Where Recorded: With the clerk of the county where the improved property or some part of the improved property is situated. NMSA § 48-2-6. New Mexico common law finds that liens that are incorrectly filed in a county where no portion of the improved property is situated are of no legal effect under NMSA § 48-2-6, nor do they “toll” (i.e., meet) the time requirements for recording the lien claim in the proper county.

New Mexico statutes do not require service of the lien claim upon any party by the lien claimant. See, e.g., NMSA § 48-2-2.1 (“Procedure for perfecting certain mechanic’s and materialmen’s liens”) and NMSA § 48-2-8 (“Recording of liens; indexing; fees”). If the contract with the prime contractor (typically a general contractor) or subcontractor requires service of a lien claim, then the claimant should follow that contractual requirement, which the New Mexico lien statutes will look to as part of determining whether the claim of lien is enforceable, as a general principle of contract law. If a contract does require service of the lien claim upon one or more parties, then the claimant should follow whatever service procedures are designated in the contract, whether by first-class mail, certified mail or personal service on the improved property’s owner, agent or trustee, along with potentially the prime contractor (again, typically, but not always, the general contractor), the lender, the surety and the customer of the materials supplier.

When to Be Filed: For private commercial projects, for existing residential projects and for new residential projects, the requirements are all the same. An original (prime) contractor is given one hundred and twenty (120) consecutive days after the completion of the entire project (defined as completion of the prime contractor’s contract) to file a notarized claim of lien, i.e., verified under oath. NMSA § 48-2-6. Subcontractors, suppliers and every other person must file a notice of claim of lien within ninety (90) consecutive days after the completion of any building, improvement, or structure, or after the completion of the alteration or repair thereof, or the performance of any labor in a mining claim. NMSA § 48-2-6.

Duration of Lien: No mechanic’s lien remains valid for more than two years following the date of recording of the claim of lien unless the lien claimant commences proceedings to foreclose and enforce the claim of lien in a court of competent jurisdiction or in binding arbitration within that two-year time period. NMSA § 48-2-10 (“Limitation of action to enforce”). The New Mexico legislature expressly protected the right of any party to record and enforce a mechanic’s or materialmen’s lien from the otherwise legal effect of “contingent payment clauses” (“pay when paid” clause). NMSA § 48-2-10.

Filing Fee: $1.75. Where the recorded instrument contains more than 700 words in the description of property, an additional charge of twenty-five (25) cents is made for each 100 words. If the instrument is photocopied, the fee is $5 for the first page and $2 for each additional page.

Contents of Notice: (1) statement of monetary demand, after deducting all just credits and offsets; (2) name of owner or reputed owner, if known; (3) name(s) of person(s) by whom claimant was contracted to perform labor or to whom he furnished materials; (4) a statement of the material (core) contract terms, i.e., the time given for performance and conditions of contract; (5) a physical description of the location of the property to be charged with the lien, sufficient for identification (unlike most states, a legal description is not required); and that is (6) verified under oath by the claimant or by some other person authorized and having a basis for attesting to the statements in the claim on the claimant’s behalf. NMSA § 48-2-6.

Extent of Lien: A lien extends to the building, structure or improvement and the land on which it is situated, together with a convenient vertical air space about the same or so much as may be required for the convenient use and occupation of the same, and to the extent of the right, title and interest of the person who caused such building, structure or improvement to be erected, repaired, etc., at the time of the commencement of the work. NMSA §48-2-4. Liability of the owner to the prime contractor cannot exceed the amount contracted to be paid to the original (prime) contractor, after deducting all claims of subcontractors under the contractor who have filed liens for work done and materials furnished. NMSA §48-2-12. In the event that the owner is required to pay lien claims in an amount that exceeds the amount which the owner still owes to the prime contractor, the owner may file suit against the prime contractor for the difference between the amount paid to subcontractors and suppliers and the amount owed to the prime contractor. Id.

Prime Contractor Liable for Liens of Subcontractor: The prime contractor shall be entitled to recover upon a lien filed by him only such amount as is due pursuant to the terms of the contract, less the amount of claims of subcontractors who have filed liens, and shall be liable to the owner for any amount paid by the owner, in excess of the contract price, that was paid to settle outstanding liens filed by subcontractors or suppliers that are unpaid by the prime contractor. NMSA § 48-2-12.

Upon notice of the pendency of any judicial foreclosure action on the lien of a subcontractor, the owner may withhold the amount currently due the prime contractor. NMSA § 48-2-12. If a judgment is obtained against the owner, including for costs, such total sum may be charged against the amount due the prime contractor, or the prime contractor may be sued for difference if he has already been paid. Id.

Priority of Lien: All timely recorded mechanic’s liens are considered filed at the same time, i.e., the first day of commencement of construction. NMSA § 48-2-5(A). Mechanic’s liens take “preference” (priority) over any non-mechanic’s lien, mortgage or other encumbrance which attaches subsequent to the time when the construction of the building, improvement or structure commenced, or when the labor was performed or materials were commenced to be furnished. Id. A timely recorded mechanic’s lien also takes priority over any lien, mortgage or other non-mechanic’s lien encumbrance of which the lien holder has no notice, such as a non-tax judgment lien, and which was unrecorded at the time the construction of the building, improvement or structure was commenced, or the labor or materials were commenced to be furnished. NMSA § 48-2-5.

Where different liens are asserted against the same property, the rank of preference set forth by the court in the judgment is as follows: (1) all persons other than original contractors or subcontractors; (2) the subcontractors; and (3) the original contractors. NMSA § 48-2-13 (“Rank of liens; order of payment”). The proceeds of the sale of the foreclosed property must be applied to each class or rank of liens in order of the rank, and are docketed for the deficiency in like manner, as in the ranking of payments in a mortgage foreclosure action. Id.

Lien for Improvement of Oil or Gas Well: Every person who, pursuant to contract, expressor implied, performs labor or furnishes or hauls material, equipment, tools, etc., in digging, drilling, “torpedoing,” completing, maintaining, operating and repairing, etc., an oil or gas well, or pipeline, or equipment in connection therewith, shall have a lien upon the land, oil and gas permit, leasehold, lease for oil and gas purposes, oil pipeline, gas pipeline, gasoline pipeline, and rights of way, buildings and equipment thereon, the appurtenances thereto, the proceeds from the sale of oil and gas produced therefrom, and the materials, tools, machinery, equipment, and supplies “so furnished or hauled,” and the oil and gas well for which they were furnished or hauled, “for the amount due to him for the materials, tools, machinery, equipment, oil and gas well supplies, hauling, or labor, and interest from the date the amount is due. ...” NMSA § 70-4-1 (“Liens for labor and material furnished or hauled for use of oil and gas wells or pipelines”) (for specific affirmation of lien rights of subcontractors, see NMSA § 70-4-3). Such lien does not extend to the underlying fee or royalty interest unless such potential rights are expressly provided by contract, nor does it “extend to the property, leasehold, or working interest of any owner who does not have a working interest in the well upon which the labor was performed or for which the materials were furnished or hauled.” NMSA § 70-4-1. A verified claim must be filed with the clerk of the county in which improved real property is located by the original contractor within two hundred and ten (210) days (NMSA § 70-4-4), and by other lien claimants claiming under the New Mexico Oil and Gas Lien Act (NMSA § 70-4-1-NMSA § 70-4-15) within one hundred and eighty (180) days (Id.), following the last furnishing or hauling of any materials, tools, machinery, equipment, supplies or labor, to the project site (NMSA § 70-4-4). Absent the provision of a credit by the owner, proceedings to enforce a lien must be instituted within one year from date of filing, or else the lien claim automatically expires. NMSA § 70-4-7. No credit given may extend the period to foreclose the lien beyond two years. Id. The lien claim must state “the name and residence of the claimant, the amount and items claimed, the name of the person to whom the materials, tools, machinery, equipment or supplies were furnished or hauled or for whom the labor was performed, the name of the owner, and a description of the property upon which the lien is claimed, verified by affidavit.” NMSA § 70-4-4.

Statutory Citation: New Mexico Territorial Laws, Chapter 48, §§ 48-2-1 to 48-2-17; §§ 48-2A-1 to 48-2A-12. Chapter 70, §§ 70-4-4 to 70-4-14.

Note: For New Mexico Stop Notices see Chapter 2 “Construction Bonds on Public Projects.”

NEW YORK

Who May Claim: Contractor, subcontractor, laborer, trust fund to which benefits and wage supplements are due or payable for the benefit of such laborers, materialman, landscape gardener, nurseryman or person or corporation selling fruit or ornamental trees, roses, shrubbery, vines and small fruit, who performs labor or furnishes materials for the improvement of real property, with the consent, or at the request, of the owner thereof, or of his agent, contractor or subcontractor. Where the contract for an improvement is made with a husband or wife and the property belongs to the other or both, the husband or wife contracting shall also be presumed to be the agent of the other, unless such other having knowledge of the improvement shall, within 10 days after learning of the contract, give the contractor written notice of his or her refusal to consent to the improvement. Materials actually manufactured for but not delivered to the real property shall also be deemed to be materials furnished. Lien also for person who performs labor for a railroad corporation for value of such labor upon the railroad track, rolling stock and appurtenances and upon the land upon which they are situated.

The term “improvement” includes the demolition, erection, alteration or repair of any structure upon, connected with, or beneath the surface of any real property and any work done upon such property or materials furnished for its permanent improvement, including work done or materials furnished in equipping any such structure with chandeliers, brackets or other fixtures or apparatus for supplying gas or electric light; the drawing by an architect or engineer or surveyor of plans or specifications or survey which are prepared for or used in connection with such improvement; the value of materials actually manufactured for but not delivered to the real property; the reasonable rental value for the period of actual use of machinery, tools and equipment and the value of compressed gases furnished for welding or cutting; the value of fuel and lubricants consumed by machinery operating on the improvement, or by motor vehicles owned, operated or controlled by the owner, or a contractor or subcontractor while engaged exclusively in the transportation of materials to or from the improvement for the purposes thereof; and the performance of real estate brokerage services in obtaining a lessee for a term of more than three years where property not to be used for residential purposes.

How Claimed: By filing notice of lien.

Where Filed: County Clerk of county where property is situated. Where property is situated in more than one county, file in each county where part of property is situated. If the Clerk maintains a block index, the notice filed shall contain the number of every block on the land map of the county which is affected. Notice of lien on railroad property filed in any county where railroad is situated.

When to Be Filed: At any time during progress of work and furnishing of materials, or within eight months after completion of contract, or final performance of work, or final furnishing of materials, dating from last item of work or materials furnished (four months for single-family dwelling) except where lien by real estate broker, notice may be filed only after performance of brokerage services. Pursuant to the newly enacted “Lien Retainage Amendment” where the Notice of Lien is for retainage monies due, a subcontractor may file a Notice of Lien within 90 days after the retainage was due to be released, even if said period is after the eight-month limitation period.

Service of Copy of Notice: A copy of the notice must be served or left at last known place of residence in city or town where property is situated or sent by certified mail either simultaneously or within 30 days after filing the notice of lien to the owner, contractor or subcontractor. Affidavit of service of the notice of lien must be filed in the County Clerk’s Office in which the property is situated within 35 days after the notice of lien is filed. Failure to do so shall terminate the notice as a lien. Any lienor who fails to serve such copy is liable for the attorneys’ fees, costs and expenses incurred in obtaining the copy.

Duration of Lien: One year after notice has been filed, unless within that time an action is commenced to foreclose the lien and notice of the pendency of the action is filed in the county in which the lien was filed. Before a mechanic’s lien expires in New York for non-prosecution, a one-year extension may be obtained by a filing with the County Clerk. Additional extensions may then be obtained by means of a court order, and, if the property is a single-family dwelling, a court order is required in all instances.

Filing Fee: $35 for filing or recording a notice of pendency of action or a notice of attachment within the City of New York. Fee varies in all counties outside the City of New York; must confirm with county clerk in designated county.

Contents of Notice of Lien: (1) Name and residence of lienor; and if lienor is a partnership or corporation, business address of such firm or corporation, names of partners and principal place of business, and if a foreign corporation, its principal place of business within the state; (2) name and address of lienor’s attorney, if any; (3) name of owner of property and owner’s interest therein; (4) name of person by whom lienor was employed, or to whom he furnished or is to furnish materials, or if lienor is a contractor or subcontractor, person with whom contract was made; (5) labor performed or materials furnished and agreed price or value thereof, or materials actually manufactured for but not delivered to the real property and the agreed price or value thereof; (6) amount unpaid to lienor for such labor or materials; (7) time when first and last items of work were performed and materials were furnished; (8) property subject to the lien, with a description and, if in a city or village, its location by street and number, if known; and (9) verification by lienor or his agent to effect that statements therein contained are true to his knowledge, except as to the matters therein stated to be alleged on information and belief, and as to those matters on which he believes them to be true.

Extent of Lien: Owner’s right, title or interest in the real property and improvements existing at or after the time of filing notice of lien. Extends to an interest assigned for the benefit of creditors where the assignment was within 30 days prior to the filing. Lien cannot exceed amount earned and unpaid on contract at time of filing notice or any sum subsequently earned thereon. Owner’s liability may not exceed, by reason of all liens filed, a sum greater than the value or agreed price of the labor and materials remaining unpaid at the time of filing notices.

Insurance Proceeds Liable for Demands: In the event that an improvement on which a lien is claimed is destroyed by fire or other casualty and insurance proceeds paid to the owner for such loss or casualty, the owner is entitled to reimbursement for premiums paid, after which the balance is subject to the lien as realty would have been. If insurance is payable to contractor after he reimburses himself for premiums paid, contractor must pay balance to laborers and materialmen to whom he is liable as if payments made to him under the contract.

Priority of Lien: (1) A lien for material furnished or labor performed in the improvement of real property has priority over a conveyance, mortgage, judgment or other claim against such property not recorded, docketed or filed at the time of the filing of the notice of lien; over advances made upon any mortgage or other encumbrance thereon after such filing; and over the claim of a creditor who has not furnished materials or performed labor upon such property, if such property has been assigned by the owner by a general assignment for the benefit of creditors, within 30 days before the filing of either of such notices; and also over an attachment issued or a money judgment recovered upon a claim, which, in whole or in part, was not for material furnished, labor performed or monies advanced for the improvement of such real property; and over any claim or lien acquired in any proceedings upon such judgment. Such liens also have priority over advances made upon a contract by an owner for an improvement of real property which contains an option of purchase to the contractor, his successor or assigns to purchase the property, if such advances were made after the time when the labor began or the first item of material was furnished, as stated in the notice of lien. If several buildings are erected, demolished, altered or repaired, or several pieces or parcels of real property are improved, under one contract, and there are conflicting liens thereon, each lienor has priority upon the particular building or premises where his labor is performed or his materials are used. Persons have no priority on account of the time of filing their respective notices of liens, but all liens are on a parity except that laborers, subcontractors and materialmen are preferred over contractors.

(2) When a building loan mortgage is delivered and recorded, the lien has priority over advances made on the building loan mortgage after the filing of the notice of lien; but such building loan mortgage, whenever recorded, to the extent of advances made before the filing of such notice of lien, has priority over the lien, provided it or the building loan contract contains a covenant by the mortgagee to receive and hold advances thereunder as trust funds for payment of the costs of the improvement, and provided the building loan contract is filed. No mortgage recorded subsequent to the commencement of the improvement and before the expiration of four months after the completion thereof shall have priority over liens thereafter filed unless it contains such covenant.

(3) Every such building loan mortgage and every mortgage recorded subsequent to the commencement of the improvement and before the expiration of four months after the completion of the improvement shall contain a similar covenant by the mortgagor that he will receive the advances secured thereby as a trust fund to be applied first for the purpose of paying the cost of improvement, and that he will apply the same first to the payment of the cost of improvement before using any part of the total of the same for any other purpose, provided, however, that if the party executing the building loan contract is not the owner of the fee but is the party to whom such advances are to be made, a building loan contract executed and filed pursuant to this chapter shall contain the said covenant by such party executing such building loan contract, in place of the covenant by the mortgagor in the building loan mortgage. Nothing in the statute is to be considered as imposing upon the lender any obligation to see to the proper application of such advances by the owner.

(4) No instrument of conveyance recorded subsequent to the commencement of the improvement, and before the expiration of four months after the completion thereof, is valid as against liens filed within four months from the recording of such conveyance, unless the instrument contains a covenant by the grantor that he will receive the consideration for such conveyance as a trust fund to be applied first for the purpose of paying the cost of the improvement and that he will apply the same first to the payment of the cost of the improvement before using any part of the total of the same for any other purpose. Nothing in the statute is to be construed as imposing upon the grantee any obligation to see to the proper application of such consideration by the grantor. Does not apply to a deed given by a referee or other person appointed by the court for the sole purpose of selling real property, or to the consideration received by a grantor who, pursuant to a written agreement entered into and duly recorded prior to the commencement of the improvement, conveys to the person making such improvement, the land upon which such improvement is made. However, such a conveyance is subject to liens filed prior thereto. Section does not apply to mortgages taken by Home Owners Loan Corp.

Waiver of Lien: Notwithstanding the provisions of any other law, any contract, agreement, or understanding whereby the right to file or enforce any lien is waived, shall be void as against public policy and wholly unenforceable. This shall not preclude a requirement for a written waiver of the right to file a mechanic’s lien executed and delivered by a contractor, subcontractor, material supplier or laborer simultaneously with or after payment for the labor performed or the materials furnished has been made to such contractor, subcontractor, materialman or laborer. Nor shall this section be applicable to a written agreement to subordinate, release or satisfy all or part of such a lien made after a notice of lien has been filed.

Assignments of Contracts and Orders to Be Filed: Assignments of contracts for the improvement of real property; orders drawn by contractors upon owners of real property for the payment of money; orders drawn by subcontractors upon contractors or subcontractors for such payments; orders drawn by an owner upon the maker of a building loan; and assignments of money due and to grow due on a building loan contract, must be filed within 10 days after the date of such assignment of contract, or such assignment of moneys or such order in the office of the County Clerk of the county where the realty is situated. Unfiled assignments and orders are absolutely void as against subsequent assignees in good faith and for a valuable consideration whose assignments and orders are first duly recorded.

Lien for Improvement of Oil or Gas Well: Under lien law real property includes all oil or gas wells and structures and fixtures connected therewith, and any lease of oil lands or other right to operate for the production of oil or gas upon such lands.

Statutory Citation: New York Lien Law, Article 2, §§3 to 39-c.

NORTH CAROLINA

Who May Claim: Any person who performs or furnishes labor or furnishes materials, professional design or surveying services pursuant to a contract, either express or implied, or any person who furnishes rental equipment to or with the owner of real property for the making of improvement thereon. A Notice of Lien may also be claimed by a subcontractor on funds owed the contractor (see paragraph 6). The subcontractor may enforce the lien of the contractor against the owner of real property to the extent of his claim. Waiver of right to file or claim a lien is against public policy and is unenforceable.

Where Filed: Office of the Clerk of the Superior Court in each county wherein the real property subject to the claim is located. A subcontractor perfects a lien upon the giving of notice in writing to obligor; effective upon receipt (see paragraph 6). A copy of the notice must be served upon the record owner and if applicable upon the contractor through which subrogation is claimed.

When Notice Filed: Notice of lien shall be filed at any time after maturity of the obligation but not later than 120 days after the last furnishing of labor or materials by persons claiming them.

Contents of Claim of Lien on Real Property: The contents of a lien claim must be in substantially the following form: (1) name and address of the person claiming the lien; (2) name and address of the record owner of the real property claimed to be subject to the lien at the time the claim of lien is filed, and if the claim is asserted and where applicable, the name of the contractor through which subrogation is being asserted; (3) description of the real property upon which the lien is claimed (street address, tax lot and block number, reference to recorded instrument, or any other description of real property is sufficient, whether or not it is specific, if it reasonably identifies what is described); (4) name and address of the person with whom the claimant contracted for the furnishing of labor or materials; (5) date upon which labor or materials were first furnished upon said property by the claimant; (5a) date upon which labor or materials were last furnished upon said property by the claimant; and (6) general description of the labor performed or materials furnished and the amount claimed therefor.

Filing Fee: $4 for the first page and 25 cents per page for each additional page.

Notice to Obligor: Subcontractors rights are by subrogation of the claims, enforced by a Notice to the party with whom the claimant contracted. Notice of lien must be sent by subcontractor for labor or materials to the obligor and sending of such notice perfects the lien. Upon receipt of such notice, the obligor is under a duty to retain the funds subject to the lien. If, after receipt of notice, the obligor makes any payment to a contractor or subcontractor against whom the lien is claimed, the lien shall continue on the funds in the hands of the contractor or subcontractor who receives the payment and in addition the obligor shall be personally liable. A subcontractor can enforce any contractor’s lien against owner. Upon the filing of the notice, a claim of lien and commencement of an action by subcontractor, no action of the contractor shall be effective to prejudice the rights of the subcontractor without his written consent.

Contents of Notice to Obligor: The notice must contain the following: (1) the name and address of person claiming the lien; (2) a general description of the real property improved; (3) the name and address of the person with whom the lien claimant contracted to improve real property; (4) the name and address of each person against or through whom subrogation rights are claimed (5) a general description of the contract and the person against whose interest the lien is claimed; and (6) the amount claimed by the lien claimant under his contract. A statutory form is provided for subcontractors giving notice of claim of lien.

Extent of Lien: Lien extends to the improvement and to the lot or tract on which improvement is situated and to extent of interest of owner. Lien secures payment of all debts owing for labor done or material furnished pursuant to the contract. A subcontractor’s lien extends to the funds owed its contractor or to the person with whom it dealt.

Duration of Lien: A timely claim of lien must be perfected by filing a civil action to enforce the lien within 180 days after the last furnishing of labor or materials at the site of improvement. Either the civil action or a lis pendens referencing the civil action must be filed in the county where the lien is filed. An action to enforce the lien may be instituted in any county in which the lien is filed. Such action may not be commenced later than 180 days after the last furnishing of labor or materials at the site of the improvement.

Priority of Lien: Liens of general contractors are entitled to priority in accordance with time of the filing of notice. Exemptions of personal and real property shall not be construed as to prevent a laborer’s lien for work done and performed for the person claiming such exemption, or a mechanic’s lien for work done on the premises. Subcontractor’s liens perfected by notice to the obligor have priority over all interest including garnishment, attachment, levy and judgment. If the amount due the contractor by the owner is not sufficient to pay in full the laborer, mechanic or artisan for his labor and the person furnishing materials, owner must distribute amount pro rata among several claimants.

Subcontractor/Supplier’s Notice of Claim of Lien Upon Funds: G.S. 44A-18 grants to all subcontractors/suppliers a lien upon the funds earned by them “as a result of having furnished labor, materials or rental equipment at the site of the improvement under the contract to improve real property, including interest at the legal rate provided in G.S. 24-5 whether or not such amounts are due and whether or not performance or delivery is complete.” In other words, a subcontractor/supplier of any tier who furnishes labor and/or materials for the improvement of real property is entitled to a lien upon the funds owed the person with whom he has contracted, provided such funds arise out of the improvement of real property on or to which he has furnished labor, materials and/or rental equipment. In addition, one can assert by subrogation a Notice of Claim of Lien Upon Funds owed by another upstream obligor (subcontractor or contractor) provided the “payment chain” is not broken (i.e., the money is still owed).

A Notice of Claim of Lien Upon Funds by a first, second or third tier subcontractor/supplier is perfected by timely serving upon the obligor(s) (owner, contractor or subcontractor in any tier who owes money to another) a Notice of Claim of Lien Upon Funds By First, Second, or Third Tier Subcontractor/Supplier in substantially the form set forth in G.S. 44A-19(b). A lien on funds by a subcontractor/supplier more remote than the third tier is perfected by timely serving a Notice of Claim of Lien Upon Funds By Subcontractor/Supplier More Remote than the Third Tier in substantially the form set forth in G.S. 44A-19(c). In contrast to a Claim of Lien on Real Property, there is no requirement to file at the courthouse either a Notice of Claim of Lien By First, Second or Third Tier Subcontractor/Supplier or a Notice of Claim of Lien By Subcontractor/Supplier More Remote than the Third Tier. It simply must be served on the owner and others involved in the lien claimant’s “Relationship Chain.” Additionally, there is no statutory time limit for serving a Notice of Claim of Lien Upon Funds; obviously, if the funds have been paid before the Notice of Claim of Lien Upon Funds is served, then there will be no funds to which the lien can attach.

Subcontractor/Supplier’s Claim of Lien on Real Property: A first tier subcontractor may enforce a claim of lien on real property by filing the claim of lien described above.

A second or third tier subcontractor may enforce a claim of lien on real property by filing a claim of lien described above, subject to notice requirements: If an owner, within 30 days of a permit being issued or a contract being awarded (whichever is later) posts and files a Notice of Contract in form described in G.S. 44A-23(b)(2), then the second or third tier subcontractor must give Notice of Subcontract in the form described in G.S. 44A-23(b)(3).

Notice to Lien Agent: On construction projects in excess of $30,000 (excepting existing residences), the owner must designate a “lien agent” and must provide the identity of the lien agent within seven days of any request by a potential lien claimant (all contractors and subcontractors must identify the lien agent within three days of entering a contract with any lower tier subcontractor). Any potential lien claimant must provide notice—substantially in the form below—within 15 days of first furnishing labor or materials.

NOTICE TO LIEN AGENT

(1) Potential lien claimant’s name, mailing address, telephone number, fax number (if available) and electronic mailing address (if available);

(2) Name of the party with whom the potential lien claimant has contracted to improve the real property described below:

(3) A description of the real property sufficient to identify the real property, such as the name of the project, if applicable, the physical address as shown on the building permit or notice received from the owner;

(4) I give notice of my right subsequently to pursue a claim of lien for improvements to the real property described in this notice.

Dated: __

__

Potential Lien Claimant

Following such notice, the existing provisions for perfecting a lien clam must be followed.

Statutory Citation: North Carolina General Statutes, Chapter 44A, Article 2, Part 1, §§44A-7 to 44A-23.

NORTH DAKOTA

Who May Claim: Any person who improves real estate by the contribution of labor, skill or materials, whether under contract with the owner of such real estate, or any agent, trustee, contractor or subcontractor of such owner, shall have a lien upon the improvement, and upon the land on which it is situated or to which it may be removed, for the price or value of such contribution. “Improve” has a broad definition, which includes building, erecting, placing, making, altering, removing, or demolishing any improvement on any land, as well as performing architectural services, construction staking, engineering and surveying, mapping and soil testing services (§§35-27-01 and 35-27-02). Liens also exist upon railroad property (§35-27-18) and they may also be filed by miners. (§35-15-07).

How Claimed: A contractor should keep an itemized account of its expenses for labor and materials  for the individual project for which a lien is being claimed separate and apart from all other items of account against the purchaser (§35-27-10); serve a written notice by certified mail upon owner demanding payment of such account and notify him that unless payment is made within 10 days of mailing a lien will be perfected (§35-27-02); and record the construction lien with the county recorder in the county where the improved property lies (§35-27-13). The lien shall describe the property, state the amount due, the dates of the first and last contribution, and the person with which the claimant contracted. (§35-27-13).

Where Filed: Recorder of the County in county where land, building or improvement is situated. (§35-27-13).

When to Be Filed: Every person desiring to perfect his lien shall file with the Recorder of the County in which the property is situated, within 90 days after all the contribution is done (§35-27-13), or if the property is used in the exploration for or the production of oil and gas, within six months, after all the contribution is done a construction lien describing the property and stating the amount due (§35-13-02). Failure to file within 90 days shall not defeat lien except as to purchasers or encumbrancers in good faith and for value whose rights accrue after the 90 days and before any claim for lien is filed, and as against the owner to the extent of the amount paid to a contractor after the expiration of the 90 days and before filing of the lien. (§35-27-14). However, a lien may not be filed more than three years after the date the first item of material is furnished. (§ 35-27-14).

Duration of Lien: A construction lien is valid for a period of three years. If an action for enforcement, and lis pendens are not filed within three years of the date the lien is recorded, the lien shall no longer be valid, enforceable, or effective. (§35-27-25). Once a construction lien becomes invalid, a lien claimant cannot renew the construction lien by filing another construction lien for the same work performed. Snider v. Brinkman, 889 N.W.2d 867, 873 (N.D. 2017). Notice of a suit to enforce must be given to the owner of the property before suit is filed; 20-days notice if sent by mail, 10 days if served personally. (§35-27-24). An owner may also demand that a suit to enforce lien be commenced within 30 days after written demand is provided to the lienholder, his agent or contractor, or lien is forfeited (§35-27-25).

Filing Fee: The fee for recording the notice of intention to claim a lien is $10 for the first page and $3 for each additional page. If only one page is filed there needs to be a 3” space on the bottom for recording information. Also if there are more than 5 sections or parcel of property add $1 for each additional section or parcel. Margins for the documents are 1” all around.

Extent of Lien: The lien attaches from the time the first item of material or labor is furnished (§35-27-03). It covers the agreed contract price, otherwise, the reasonable value of the work done (§35-27-06), less any payments made to the lienholder. The entire land upon which the building or improvement situated is subject to the lien to the extent of the landowner’s right, title and interest (§35-27-19). When the interest owned in land by the owner of the building, or other improvement for which the lien is claimed is only a leasehold interest, the forfeiture of the lease will not impair the lien so far as it applies to the buildings or improvements, but the improvements may be sold to satisfy the lien and may be removed by the purchaser within 30 days after the sale. (§35-27-21).

Priority of Lien: Construction liens are preferred to any mortgage or other encumbrance not then of record, unless the lien holder had actual notice thereof. Construction liens shall have priority in the following order: (1) for manual labor; (2) for materials; (3) subcontractors other than manual laborers; and (4) original contractors. Liens for manual labor filed within 90-day period share pro rata; those filed thereafter shall have priority in order of filing; liens for materials have priority in order of the filing of notices of intention. (§35-27-22).

Improvements Not Authorized by Owner: Any person who has not authorized the same may protect his interest from such liens by serving upon person doing work, etc., within five days after he has knowledge thereof, a written notice that the improvement is not being made at his instance, or by posting like notice and keeping the same posted, in a conspicuous place on the premises. As against a lessor, no lien is given for repairs made by or at the instance of his lessee, unless the lessor shall have actual or constructive notice thereof and not object thereto. (§35-27-07).

Lien for Improvement of Oil or Gas Well: Such liens are created, perfected and enforced in a similar manner as construction liens, except that filing must be made within six months of performing labor or furnishing materials. (§35-24-11).

Statutory Citation: North Dakota Century Code, Title 35, Chapter 35-13, §35-13-02; Chapter 35-15, §35-15-07; Chapter 35-24, §35-24-11; Chapter 35-27, §§35-27-01 to 35-27-25.

OHIO

Who May Claim: Every person who performs work or labor upon or furnishes material in furtherance of any improvement undertaken by virtue of a contract, express or implied, with the owner, part owner or lessee of any interest in real estate, or his authorized agent, and every person who as a subcontractor, laborer or materialman, performs any labor or work or furnishes any material to an original contractor or any subcontractor, in carrying forward, performing or completing any improvement, has a lien to secure the payment therefore upon the improvement and all interests that the owner, part owner, or lessee may have or subsequently acquire in the land or leasehold to which the improvement was made or removed.

Notice of Commencement: Contents of Notice of Commencement (Private Projects). A Notice of Commencement for private projects shall contain the following information: (1) legal description of the real property on which the improvement is to be made; (2) brief description of the improvement to be performed containing sufficient specificity to permit lien claimants to identify the improvement; (3) name, address and capacity of the owner, part owner or lessee of the real property contracting for the improvement; (4) name and address of the fee owner of the real property, if the person contracting for the improvement is a land contract vendee or lessee; (5) name and address of the owner’s, part owner’s or lessee’s designee, if any; (6) name and address of all original contractors; (7) date the owner, part owner or lessee first executed a contract with an original contractor for the improvement; (8) name and address of all lending institutions which provide financing for the improvements, if any; (9) name and address of all sureties on any bond which guarantee payment of the original contractor’s obligations under the contract for the improvement, if any; (10) name and address of the person preparing the notice; (11) affidavit of the owner, part owner or lessee or the agent of the owner, part owner or lessee which verifies the notice; and (12) the following statement: “To Lien Claimants and Subsequent Purchasers: Take notice that labor or work is about to begin on or materials are about to be furnished for an improvement to the real property described in this instrument. A person having a mechanic’s lien may preserve the lien by providing a notice of furnishing to the above-named designee and his original contractor, if any, and by timely recording an affidavit pursuant to Section 1311.06 of Revised Code. A copy of this notice may be obtained upon making a written request by certified mail to the above-named owner, part owner, lessee, designee or person with whom you have contracted.”

Notice of Commencement (Commercial Projects). On projects, other than one- or two-family dwellings, in connection with a residential unit of condominium property, where the property is intended to be used as a personal residence by the owner, part owner, or lessee, or public projects (collectively referred to as “commercial projects”), prior to the performance of any labor or work or the furnishing of any materials for an improvement on real property which may give rise to a mechanic’s lien, the owner, part owner or lessee who contracts for the labor, work, or materials shall record in the office of the county recorder where the project is located a Notice of Commencement.

Notice of Commencement (Residential Projects). On projects involving one- or two-family dwellings, in connection with a residential unit of condominium property, where the property is intended to be used as a personal residence by the owner, part owner, or lessee, (collectively referred to as “residential projects”) there is no requirement for the owner to record a Notice of Commencement, but if such is recorded, then while the priority of lien holders is affected, the requirement for a Notice of Furnishing is eliminated (see below).

Contents of Notice of Commencement (Public Projects). A Notice of Commencement for public projects shall contain the following information: (1) name, location, and a number, if any, used by the Public Authority to identify the public improvement sufficient to permit the public improvement to be identified; (2) name and address of the Public Authority contracting for the improvement; (3) name, address, and trade of all principal contractors; (4) the date the Public Authority first executed a contract with the principal contractor for the public improvement; (5) names and addresses of all sureties for all principal contractors; and (6) name and address of the representative of the Public Authority upon whom service shall be made for the purposes of service a lien on public funds (mechanic’s lien).

Notice of Commencement (Public Projects). On public improvements, the Public Authority is required to prepare a Notice of Commencement and make it available to subcontractors, laborers and materialmen upon request, but the Notice of Commencement is not recorded.

Notice of Furnishing: Contents of Notice of Furnishing (Private Projects). A Notice of Furnishing for work not related to public projects, shall include: (1) name of the owner, part owner, or lessee who contracted for the project; (2) the original contractor through whom a subcontractor is working or a supplier is supplying materials; (3) a description of the property; (4) name and address of the person furnishing work or materials who is submitting the Notice of Furnishing; (5) the name and address of the contracting party to whom work or materials are furnished (which may be the original contractor or a lower tier subcontractor or supplier); (6) the date work or materials first will be or were furnished; and (7) the book and page number at which the owner’s Notice of Commencement was recorded. If a Notice of Commencement has not been recorded, then there is no requirement for a Notice of Furnishing to be provided by potential lien claimant.

Notice of Furnishing (Commercial Projects). On projects, other than residential projects or public projects and where a Notice of Commencement has been recorded, every subcontractor or materialman who performs work or labor or furnishes material for an improvement must serve a Notice of Furnishing on the original contractor to preserve his lien rights within 21 days of first performing labor or furnishing materials. Failure to serve the Notice of Furnishing within the first 21 days does not defeat all lien rights, merely only allows the lien to cover the previous 21 days of work, labor, or material from when the Notice of Furnishing is actually served.

Notice of Furnishing (Residential Projects). On residential projects, a Notice of Furnishing is not required and has no effect on the lien claim process regardless of whether a Notice of Commencement was recorded or not.

Contents of Notice of Furnishing (Public Projects). A Notice of Furnishing for work related to public projects, shall include: (1) name and address of the principal contractor; (2) a description of the labor, work, or materials provided; and (3) a description of the property or address to identify the project.

Notice of Furnishing (Public Projects). On public projects, any subcontractor, laborer or materialman who is not in direct contract with the principal (original) contractor is required to serve a Notice of Furnishing on the principal contractor to preserve lien rights within 21 days of first performing labor or furnishing materials. Failure to serve the Notice of Furnishing within the first 21 days does not defeat all lien rights, merely only allows the lien to cover the previous 21 days of work, labor, or material from when the Notice of Furnishing is actually served. See Chapter 2 for process required to preserve rights under bond claims.

Private Projects. (Commercial and Residential). Affidavit for Mechanic’s Lien: How Claimed. To claim a mechanic’s lien, claimant must make and file for record an Affidavit for Mechanic’s Lien and serve a copy of it on the owner, part owner, or lessee of the improved property within 30 days after filing the affidavit.

Contents of Lien. A mechanic’s lien shall contain the following information: (1) an affidavit sworn to by attorney or representative of claimant with knowledge of the claim and notarized; (2) amount due the claimant over and above all credits and setoffs (3) a description of the property to be liened (a legal description of the property is necessary for proper recording); (4) first and last dates of services and materials provided; (5) name and address of lien claimant; (6) name and address of the person/company who the claimant had an account/contract with to provide services and materials; and (7) name and address of the owner, part owner, or lessee.

Where Filed. Office of the county recorder in the counties in which the improved property is located.

When to Be Filed. If the lien arises in connection with a one- or two-family dwelling or in connection with a residential unit of condominium property (residential project), lien must be filed within 60 days from the date on which the last labor or work was performed or material was furnished by the person claiming the lien. If the lien is in connection with work done on an oil or gas well, lien must be filed within 120 days from the date on which the last labor or work was performed or material was furnished. If the lien is for any other type of work (commercial project), lien must be filed within 75 days from the date on which the last of the labor or work was performed or material was furnished by the person claiming the lien.

Contents of Lien. The lien must contain the following information: (1) amount due over and above all legal setoffs; (2) description of the property to be charged with the lien; (3) name and address of the person to or for whom the labor or work was performed or material was furnished; (4) name of the owner, part owner or lessee, if known; (5) name and address of the lien claimant; and (6) first and last dates that the lien claimant performed any labor or work or furnished any material to the improvement giving rise to the lien. The affidavit may be verified before any person authorized to administer oaths, whether for the owner’s agent, part owner, lessee, lien claimant, or an interested other party. There is a statutory form available for the affidavit.

Service of Copy of Affidavit. Service of the mechanic’s lien on the owner, part owner, or lessee may be made by sheriff, a method by mail, or hand delivery which includes a written evidence of receipt, or by serving a company’s statutory agent. If the lien cannot be served as described within 30 days, then the claimant shall serve a copy by posting it in some conspicuous place on the premises of the improved property within 10 days after the expiration of the 30 days.

Extent of Lien. Liens extend to the improvement and all interests that the owner, part owner or lessee may have or subsequently acquire in the land or leasehold to which the improvement was made or removed.

Duration of Lien. Liens for labor, or work performed, or materials furnished prior to the recording of the Notice of Commencement are effective from the date the first visible work or labor is performed or the first materials are furnished by the original contractor, subcontractor, materialman or laborer at the site of improvement. Liens for labor, or work performed, or materials furnished after the recording of a Notice of Commencement are effective from the date of the recording of the Notice of Commencement. Liens continue in force for six years after a lien is filed in the office of the county recorder. If an action is brought to enforce the lien within that time, the lien continues in force until final adjudication thereof. The owner may serve a Notice to Commence Suit, in which case the claimant must file suit within 60 days, or the lien is invalid as a matter of law.

Priority of Lien. If several liens are obtained by several claimants upon the same improvement, they have no priority among themselves, except as follows: Liens for which the effective date is the date the first visible work or labor is performed or the first materials are furnished (i.e., liens prior to recording of a Notice of Commencement), have priority over all other liens except those claimed by laborers. Liens filed by laborers have priority over all other lien whether the labor or work was performed before or after the recording of Notice of Commencement. Liens for work performed or materials furnished after the recording of a Notice of Commencement shall be preferred to all other titles, liens, or encumbrances which may attach to or upon such improvement or to or upon the land upon which it is situated, which either are given or recorded subsequent to the recording of the Notice of Commencement. The lien of a subcontractor is superior to any already taken or to be taken by the original contractor in respect of the same labor, work or material, and the liens of laborers, materialmen and subcontractors to an original contractor or subcontractor indebted to them in respect of such labor, work or material.

Residential Projects (Effect of “Paid in Full”). No original contractor, subcontractor, materialman or laborer has a lien to secure payment for labor or work performed or materials furnished by him, in connection with a home construction contract between the original contractor and the owner, part owner or lessee in connection with a one- or two-family dwelling or residential unit of condominium property, that is the subject of a home purchase contract, if the owner, part owner or lessee paid the original contractor in full or if the purchaser has paid in full for the amount of the home construction or home purchase contract price, and the payment was made prior to the owner’s, part owner’s or lessee’s receipt of a copy of an Affidavit of Mechanic’s Lien. “Paid in full” is defined as the unpaid balance under the home construction contract or the home purchase contract, minus cost to complete the contract according to its terms and conditions, including any warranty or repair work.

Public Projects. Affidavit for Mechanic’s Lien: How Claimed. To claim a lien on public funds, claimant must serve a copy of the lien upon the Public Authority, through the representative listed in the Notice of Commencement, within 120 days from the last date of performance of labor, work or furnishing of material. If the claimant performed its labor, work or material to a subcontractor of the principal contractor, the claimant shall, within 20 days after serving the lien on the Public Authority, furnish a copy to the subcontractor.

Contents of Lien. A lien on public funds shall contain the following information: (1) the amount due and unpaid, with all credits and setoffs; (2) when the last date labor, work, or materials were furnished; and (3) the post office address of the claimant.

Where Filed (Priority of Liens). A lien claimant is not required to record its lien. However, in order to place other subcontractors, laborers, and a material suppliers on notice, a claimant may record its affidavit for lien on public funds with the county recorder (or recorders if the project is in more than one county) where the public improvement is situated. Recording the lien gives the claimant priority over those claimants that did not record their lien.

Notice of Intent to Dispute. Upon receipt of a lien the Public Authority, or the claimant in the name of the Public Authority, may serve the principal contractor with a copy of the lien, together with a notice that the principal contractor must give notice of his intention to dispute the claim within 20 days. If the principal contractor (or the subcontractor within 20 days after receipt of the lien) fails to serve the Public Authority with the notice of intent to dispute, then that contractor (or subcontractor) has assented to the correctness of the claim.

Statutory Citation: Ohio Revised Statutes, Title 13, Chapter 11, §§1311.01 to 1311.38.

OKLAHOMA

Who May Claim: Any person who shall perform labor or furnish material for the erection, alteration or repair of any building, improvement or structure, or who shall furnish material and perform labor in putting up any fixtures, or who shall plant any trees, vines, plants or hedges, or who shall furnish labor, or material for buildings, or repairs any fence, footwalk or sidewalk, shall have lien upon the land upon which such buildings or improvements are made and upon such buildings and appurtenances. Miners and other employees in or about mines have lien on machinery, equipment, income, leases, etc., for payment for work done.

Any person claiming a lien shall file in the office of the county clerk in the county in which the land or property is located, a statement containing: the amount claimed and items thereof, as nearly as practicable, the names of the owners, the contractor, the claimant and the legal description of the property, subject to such lien and verified by affidavit. Such statement by the original contractor shall be filed within four months after the date upon which labor was last performed; subcontractors have 90 days.

How Claimed: (a) Original Contractor. Any person claiming a lien as aforesaid shall file in the office of the county clerk of the county in which the land is situated a statement setting forth the amount claimed and the items thereof as nearly as practicable, the names of the owner, the contractor, the claimant, and a legal description of the property subject to the lien, verified by affidavit.

(b) Subcontractor. By filing with the county clerk of the county in which the land is situated, within 90 days after the date upon which material or equipment used on said land was last furnished or labor last performed under such subcontract, a statement, verified by affidavit, setting forth the amount due from the contractor to the claimant, and the items thereof, as nearly as practicable, the name of the owner, the name of the contractor, the name of the claimant, and a legal description of the property upon which a lien is claimed.

Pre-Lien Notice: For all claims of $10,000 and over, a subcontractor or supplier has 75 days from last furnishing labor, materials, service or equipment to give written notice of a claim to the general contractor and property owner to the last known address or original contractor and owner of the property by hand delivery with confirmation receipt, certified mail, return receipt requested, or by email provided it is addressed properly or otherwise directed to an information processing system that the recipient has designated or uses for the purpose of receiving electronic records or information. Notice must contain a statement that it is a pre-lien notice, the complete name, address and telephone number of subcontractor or supplier, date of supply of material, equipment or service, description of such, name and last known address of person requesting material, address or legal description of property, statement of the dollar amount of material, etc., and signature of the representative of claimant company. At the time of filing the lien statement, the claimant shall furnish to the county clerk an affidavit verifying compliance with the pre-lien notice requirements.

Where Recorded: In the office of the County Clerk in the county where the land is situated.

When to Be Recorded: Original contractor has four months after the date upon which the material was last furnished or labor last performed, within which to file his statement for a lien; subcontractors, 90 days.

Duration of Lien: Suit must be commenced within one year from date of filing lien claim.

Filing Fee: $15 for the first page; $2 for each additional page; and $13.21 per notice to notify the property owner.

Notice of Lien: County Clerk shall mail notice of lien to owner of property on which lien attaches. The notice shall contain date of filing, name and address of party claiming lien, the person against whom the claim is made and the owner of the property, a legal description of the property and the amount claimed. Within one business day of filing the claim of lien, a notice of such lien shall be mailed by certified mail, return receipt requested to the owner of the property on which the lien attached. The claimant shall furnish the County Clerk with the last known mailing address of the person against whom the claim is made and of the owner.

Contents of Notice of Lien: Statement setting forth amount claimed and items thereof, name of the owner, the contractor and claimant, and description of the property subject to the lien, verified by affidavit.

Extent of Lien: Lien is upon the whole of the tract or piece of land, the buildings and appurtenances. If the title to the land is not in the person with whom contract was made, lien shall be allowed on the buildings and improvements separate from the real estate. The owner shall not be liable for a subcontractor’s lien for an amount greater than he contracted to pay the original contractor.

Priority of Lien: Such lien shall be preferred to all other liens or encumbrances which may attach to or upon such land, building or improvements subsequent to the commencement of such building or furnishing or putting up fixtures or machinery.

Lien for Improvement of Oil or Gas Well: A lien exists for anyone contracting to perform labor or services, or furnish material, machinery and oil well supplies used in the digging, drilling, torpedoing, operating, completing or repairing of any oil or gas well. The lien extends to the whole leasehold including the proceeds from sale of the oil or gas. The lien has priority as to all other encumbrances obtained subsequent to the commencement of the furnishing or putting up of the material or supplies. The lien will follow the property and be enforceable against the property wherever it may be found. Filing of a lien statement will constitute constructive notice of the lien to third parties. No lien on the proceeds from the sale of oil or gas produced shall be effective against any purchaser of such oil or gas until a copy of the statement of lien has been delivered to such purchaser by registered or certified mail. Notice of such lien is given and filed in same manner as mechanic’s liens. Liens for oil and gas wells are limited to the leasehold estate; they do not affect any other interest in the real property involved. However, if the owner also owns a working interest in a well located thereon, the lien attaches to the working interest. Contractor and subcontractor each have 180 days to file lien from date of last work or supply of materials; one year from filing date to file suit.

Statutory Citation: Oklahoma Statutes, Title 42, §§42-141 to 42-180.

OREGON

Who May Claim: (1) Any person, subject to requirements described below, performing labor upon, transporting or furnishing any material to be used in, or renting equipment used in the construction of any improvement (ORS §87.005(5)), which includes any building, wharf, bridge, ditch, flume, reservoir, well, tunnel, fence, street, sidewalk, machinery, aqueduct, or other structure or superstructure shall have a lien upon the improvement for the labor, transportation, or material furnished or equipment rented at the instance of the owner of the improvement or the construction agent of the owner. (2) Any person who engages in or rents equipment for the preparation of a lot or parcel of land, or improves or rents equipment for the improvement of a street or road adjoining a lot or parcel of land at the request of the owner of the lot or parcel, shall have a lien upon the land for work done and materials furnished or equipment rented. (3) A lien for rented equipment is limited to the reasonable rental value of the equipment, notwithstanding the terms of the underlying rental agreement. (4) Trustees of an employee benefit plan shall have a lien upon the improvement for the amount of contributions, due to labor performed on that improvement, required to be paid by agreement or otherwise into a fund of the employee benefit plan. (5) An architect, landscape architect, land surveyor, or registered engineer who, at the request of the owner or an agent of the owner, prepares plans, drawings, or specifications that are intended for use in, or to facilitate the construction of, an improvement, or who supervises the construction, shall have a lien upon the land and structures necessary for the use of the plans, drawings, or specifications so provided or supervision performed. (6) A landscape architect, land surveyor, or other person who prepares plans, drawings, surveys, or specifications that are used for the landscaping or preparation of a lot or parcel of land or who supervises the landscaping or preparation shall have a lien upon the land for the plans, drawings, surveys, or specifications used or supervision performed. (ORS §87.010).

A contractor may not perform work on a residential structure if the aggregate price of the contract work exceeds $2,000, or if the original contract was for less than $2,000, but subsequently became more than $2,000, without a written contract. (ORS §701.305). Absent application of narrow and limited exceptions, contractors who are not properly registered with the Construction Contractors Board (CCB) at the time a bid is submitted or a contract is executed and throughout the project are not entitled to perfect or commence a lien claim or foreclose a construction lien, or initiate an arbitration or a court action. (ORS §701.131). An original contractor may not claim a lien arising from the improvement of real property if a written contract for the work is required by ORS §701.305 and the contractor does not have a written contract. (ORS §87.037). A contractor who contracts directly with a residential owner, and who fails to give an “Information Notice to Owner,” a document issued by the CCB that describes lien rights, may not claim a lien. (ORS §87.093(6)).

How Claimed: Except when material, equipment, services, or labor described in (1) to (3), (5) and (6) above is furnished at the request of the owner, or when a person provides labor upon a commercial improvement or provides labor and materials for a commercial improvement or who rents equipment used in the construction of a commercial improvement, a person furnishing any materials, equipment, services, or labor for which a lien may be perfected under ORS §87.035 shall give a notice of right to a lien to the owner of the site. The notice may be given at any time during the progress of the improvement, but it only protects the right to perfect a lien on those materials, equipment and labor or services provided after a date which is eight days, not including Saturdays, Sundays and holidays, before the notice is delivered or mailed. However, no lien is created under (5) or (6) above for any services provided for an owner-occupied residence at the request of an agent of the owner. (ORS §87.021).

The notice must include the following information (ORS §87.023) and must be in substantially the following form:

NOTICE OF RIGHT TO A LIEN

WARNING: READ THIS NOTICE. PROTECT YOURSELF FROM PAYING ANY CONTRACTOR OR SUPPLIER TWICE FOR THE SAME SERVICE.

To:      (Owner)                                                              Date of mailing: __

           (Owner’s address)

This is to inform you that (name of subcontractor or material supplier) has begun to provide (description of materials, equipment, labor, or services) ordered by (contractor) for improvements to property you own. The property is located at (address of property).

A lien may be claimed for all materials, equipment, labor and services furnished after a date that is eight days, not including Saturdays, Sundays and other holidays as defined in ORS §187.010, before this notice was mailed to you.

Even if you or your mortgage lender has made full payment to the contractor who ordered these materials or services, your property may still be subject to a lien unless the supplier providing this notice is paid.

THIS IS NOT A LIEN. It is a notice sent to you for your protection in compliance with the construction lien laws of the State of Oregon.

This notice has been sent to you by:

(Name)

(Address)          

(Telephone)      

IF YOU HAVE ANY QUESTIONS ABOUT THIS NOTICE, FEEL FREE TO CALL US.

IMPORTANT INFORMATION ON REVERSE SIDE

IMPORTANT INFORMATION FOR YOUR PROTECTION

Under Oregon’s laws, those who work on your property or provide labor, equipment, services, or materials, and who are not paid, have a right to enforce their claim for payment against your property. This claim is known as a construction lien.

If your contractor fails to pay subcontractors, material suppliers, rental equipment suppliers, service providers, or laborers or neglects to make other legally required payments, the people who are owed money can look to your property for payment, even if you have paid your contractor in full.

The law states that all people hired by a contractor to provide you with materials, equipment, labor, or services must give you a notice of right to a lien to let you know what they have provided.

WAYS TO PROTECT YOURSELF ARE:

—RECOGNIZE that this notice of right to a lien may result in a lien against your property unless all those supplying a notice of right to a lien have been paid.

—LEARN more about the lien laws and the meaning of this notice by contacting the Construction Contractors Board, an attorney, or the firm sending this notice.

—ASK for a statement of the labor, equipment, services, or materials provided to your property from each party that sends you a notice of right to a lien.

—WHEN PAYING your contractor for materials, equipment, labor, or services, you may make checks payable jointly to the contractor and the firm furnishing materials, equipment, labor, or services for which you have received a notice of the right to a lien.

—OR use one of the methods suggested by the “Information Notice to Owners.” If you have not received such a notice, contact the Construction Contractors Board.

—GET EVIDENCE that all firms from whom you have received a notice of the right to a lien have been paid or have waived the right to claim a lien against your property.

—CONSULT an attorney, a professional escrow company, or your mortgage lender.

Where Filed: Recording officer in county or counties where the improvement, or some part thereof, is situated. (ORS §87.035(2)).

When to Be Filed: Every person claiming a lien under ORS §87.010(1) or (2) shall perfect the lien not later than 75 days after the person has ceased to provide labor, rent equipment, or furnish materials, or 75 days after completion of construction, whichever is earlier. (ORS §87.035(1)). Every other person claiming a lien created under ORS §87.010 shall perfect the lien not later than 75 days after the completion of construction. (ORS §87.035(1)). A person filing a claim for a lien shall mail or hand deliver to the owner and to the mortgagee (including a trust deed beneficiary), not later than 20 days after the date of filing, a notice in writing that the claim of lien has been filed. A copy of the claim of lien shall be attached to the notice. (ORS §87.039). In addition, a notice of intent to foreclose must be mailed or hand delivered to the owner and mortgagee at least 10 days before a suit to foreclose the lien is filed. (ORS §87.057). Most notices under Oregon lien law shall be delivered in person or delivered by registered or certified mail. (ORS §87.018).

Duration of Lien: The lien will bind the property for 120 days from the date of recording unless a lawsuit is commenced to foreclose the lien within 120 days from the date of recording, or if extended payment is provided and the terms thereof are stated in the claim of lien, within 120 days after the expiration of such extended payment, but no lien shall continue in force for a longer time than two years from the date the claim for lien is recorded. (ORS §87.055).

Recording Fee: The recording officer will charge a fee to record the claim of lien. The amount charged will vary by county, and you should check with the recording officer.

Contents of Lien Claim: The lien claim must contain: (1) a true statement of demand, after deducting all just credits and offsets; (2) the name of the owner or reputed owner, if known; (3) the name of the person by whom the claimant was employed or to whom the claimant furnished the materials or rented the equipment or by whom contributions are owed; and (4) a description of the property to be charged with the lien sufficient for identification, including the address, if known. The claim of lien must be verified by the oath of the person filing or of some other person having knowledge of the facts, subject to the criminal penalties for false swearing. (ORS §87.035(3) and (4)).

Extent of Lien: A construction lien applies to the site, together with the land that may be required for the convenient use and occupation of the improvement constructed on the site, to be determined by the court at the time of the foreclosure of the lien if, at the time of commencement of the improvement, the person who caused the improvement to be constructed was the owner of that site and land. If the person who caused the improvement to be constructed had less than absolute ownership (for example, a leasehold interest), then usually only the interest of that person in the land shall be subject to the lien. (ORS §87.015). When a person who has less than absolute ownership causes an improvement to be constructed, the construction shall be deemed at the insistence of the absolute owner, and the owner’s interest shall be subject to a lien for the work unless the owner gives notice (by posting such in a conspicuous place on the project) that the owner will not be responsible for the work within three days of the owner obtaining knowledge of the work. (ORS §87.030).

Priority of Lien: The perfection of a lien under Oregon law relates to the date of commencement of the improvement. (ORS §87.025(7)). The dates of creating or recording the lien do not affect the priorities of competing lien claimants on the same project. (ORS §87.025(7)). A lien created under ORS §87.010 (2) or (6) upon any lot or parcel of land shall be preferred to any lien, mortgage, or other encumbrance which attached to the land after, or was unrecorded at the time of, commencement of the improvement. (ORS §87.025(1)). Except as provided below, a lien created under ORS §87.010 (1), (4) or (5) upon any improvement shall be preferred to all prior liens, mortgages, or other encumbrances upon the land upon which the improvement was constructed. (ORS §87.025(2)). To enforce such lien, the improvement may be sold separately from the land, and the purchaser may remove the improvement upon the payment to the owner of the land of a reasonable rent for its use from the date of its purchase to the time of removal. (ORS §87.025(2)). No lien for materials or supplies shall have priority over any recorded mortgage or trust deed on either the land or improvement unless the person furnishing the material or supplies, not later than eight days, not including Saturdays, Sundays and holidays, after the date of delivery of material or supplies for which a lien may be claimed, delivers to the lender a copy of the notice given under ORS §87.021. (ORS §87.025(3)). Finally, unless the mortgage or trust deed is given to secure a loan made to finance the alteration or repair, any lien created under ORS §87.010 for the alteration and repair of an improvement commenced and made subsequent to the date of record of a duly executed and recorded mortgage or trust deed on that improvement or on the site shall not take precedence over the mortgage or trust deed. (ORS §87.025(6)).

Payment of the Lien: If proceeds from a foreclosure sale are insufficient to pay all claimants, the payments shall be made to each lien claimant on a pro rata basis. (ORS §87.060(6)). Further, each lien claimant is entitled to execution for any balance due after the distribution of the proceeds received from the foreclosure sale. (ORS §87.060(6)).

Statutory Citation: Oregon Revised Statutes, Volume 2, Title 9, Chapter 87, §§87.001 to 87.093; Volume 15, Title 52, Chapter 701, §§701.131, 701.305.

PENNSYLVANIA

Who May Claim: Contractors and subcontractors are entitled to a lien for all debts due for labor or materials furnished in the erection or construction, or the alteration or repair of an improvement, provided that the amount of the claim exceeds $500. A subcontractor who has a contract with a subcontractor in direct privity of contract with a contractor will also be entitled to a lien for all debts due for labor or materials furnished in the erection or construction, or the alteration or repair of an improvement, provided that the amount of the claim exceeds $500. However, a subcontractor will not have the right to a lien with respect to an improvement to a residential property if “(1) the property owner or tenant paid the full contract price to the contractor; (2) the property is or is intended to be used as the residence of the owner or subsequent to occupation by the owner, a tenant of the owner; and (3) the residential property is a single townhouse or building that consists of one or two dwelling units used, intended or designed to be built, used, rented or leased for living purposes.” Additionally “the term ‘townhouse’ means a single-family dwelling unit constructed in a group of three or more attached units in which each unit extends from foundation to roof with a yard or public way on at least two sides.” Also, Section 1510 of the Pennsylvania mechanic’s lien statute, “Discharge of Lien or Reduction of Lien,” provides that a mechanic’s lien claim filed by a subcontractor with respect to a residential property shall, upon a court order issued upon a petition or motion by the property owner or a party in interest, be discharged as a lien against the residential property when the owner or tenant shows that they have paid the full contract price to the contractor. If or when the owner or tenant shows that they have paid a sum to the contractor which is less than the full contract price, then a mechanic’s lien claim filed by a subcontractor with respect to an improvement to a residential property shall, upon a court order issued upon a petition or motion by the owner or a party in interest, reduce the amount of the subcontractor’s lien to the amount of the unpaid contract price owed by the owner or tenant to the contractor.

How Claimed: Every claimant must file a claim with the Prothonotary of the county where the improvement is located and serve notice of filing upon the owner within one month after filing. A subcontractor in privity of contract with the contractor must give a written notice to the property owner, prior to filing a mechanic’s lien, in accordance with the Notice to Owner provisions set forth below. A subcontractor who has a contract with a subcontractor in direct privity of contract with a contractor, and/or a subcontractor in direct privity of contract with a contractor, must give a written formal notice to the property owner of intention to file a mechanic’s lien claim, at least 30 days prior to filing a mechanic’s lien claim, in accordance with the Notice to Owner provisions set forth below. In addition to the formal notice of intention to file a mechanic’s lien claim, if the construction prime contract is $1,500,000 or more, that project may be listed (as a Searchable Project), on the Pennsylvania State Construction Notice Directory, an internet website established by the Pennsylvania Department of General Services, at www.scnd.pa.gov. This website serves as a standardized statewide system for filing additional construction notices which are now required for Searchable Projects registered on the Directory. The additional construction notices now required for Searchable Projects are also identified in the Notice to Owner provisions set forth below.

Where Filed: The claim must be filed with the Prothonotary of the county where the improvement is located. Where the improvement is located in more than one county, the claim may be filed in any one or more of said counties but shall be effective only as to the part of the property in the county in which it has been filed.

When to Be Filed: A mechanic’s lien claim must be filed within six months after the claimant last supplied labor and/or material to the job site property.

Notice to Owner: No claim by a subcontractor shall be valid unless, at least 30 days before the claim is filed, the subcontractor gives to the owner a formal written notice of the intention to file a mechanic’s lien claim. The formal notice shall state: (1) name of the party claimant; (2) name of the person with whom contracted; (3) amount claimed to be due; (4) general nature and character of the labor or materials furnished; (5) date of completion of the work for which the claim is made; (6) brief description sufficient to identify the property subject to the lien; and (7) date on which preliminary notice of intention to file a claim was given and a copy thereof. The Formal Notice is required from a subcontractor regardless of whether the project is a new construction or involves the alteration or repair of an existing improvement.

The notice may consist of a copy of the claim intended to be filed, together with a statement that the claimant intends to file the original or a counterpart thereof. Notice provided in this section may be served by first-class mail, registered or certified mail, on the owner or the owner’s agent by an adult in the same manner as a writ of summons in assumpsit, or if service cannot be so made, then by posting upon a conspicuous public part of the improvement.

Additionally, if the construction project is a Searchable Project (a project where the prime contract is for $1,500,000 or more) registered on the State Construction Notices Directory website (www.scnd.pa.gov), additional notices are required to be filed on the directory. Those additional notices are:

(1)      Notice of Commencement, which must be filed online with the Directory by the owner or the contractor, prior to the commencement of labor or the furnishing of material. It can be completed online and must contain (a) the full name and contact information of the contractor, (b) the name and location of the Searchable Project, (c) the county of the location of the Searchable Project, (d) the legal description of the property being improved (including tax identification number of each parcel included in the Searchable Project), (e) full contact information for the Searchable Project owner of record, (f) if a surety bond is provided for the Searchable Project, full contact information for the surety and the surety bond numbers, and (g) the assigned unique identifying number for the Notice of Commencement.

(2)      Notice of Furnishing, to be filed by subcontractors who are furnishing labor and/or material to the Searchable Project, and this notice must be filed online with the Directory within 45 days of commencing labor or furnishing material. The Notice of Furnishing must contain (a) a general description of the labor and/or materials furnished to the Searchable Project, (b) full contact information for the supplier of labor and/or materials, (c) full contact information for the party that contracted for the labor and/or materials, (d) a description sufficient to identify the Searchable Project to which the labor and/or material is to be provided (usually obtained from the filed Notice of Furnishing).

Notice of Filing of Claim. Notice of filing of the claim must be given by all claimants whether contractors or subcontractors. Notice of filing must be served upon the owner within 30 days after filing, giving the court term and number and the date of filing of the claim.

An affidavit of service of notice or the acceptance of service must be filed within 20 days after such service setting forth the date and manner of service. Failure to serve such notice or file the affidavit within the time specified shall be sufficient grounds for striking off the claim.

Rule by Owner. After completion of the work by a subcontractor, any owner or contractor may file a rule or rules in the court in which the claim may be filed requiring the party named to file his claim within 30 days after service of notice of the rule. Failure to file the claim within such period shall defeat the right to do so. If a subcontractor files as a result of the rule, no notice of intention to file is required. Where a claim is filed by a subcontractor, the owner may give written notice thereof to a subcontractor.

Contents of the Claim: The claim of lien must state: (1) name of the party claimant and whether he files as contractor or subcontractor; (2) the name and address of the owner or reputed owner; (3) the date of completion of the claimant’s work; (4) if filed by a subcontractor, the name of the person with whom he contracted and the dates on which the notice of furnishing, if required, and of the formal notice of intention to file a mechanic’s lien claim were given; (5) if filed by a contractor under a contract or contracts for an agreed sum, an identification of the contract and a general statement of the kind and character of the labor or materials furnished; (6) in all other cases than that set forth in clause (5) of this section, a detailed statement of the kind and character of the labor or materials furnished or both and the prices charged for each thereof; (7) the amount or sum claimed to be due; and (8) such description of the improvement and of the property claimed to be subject to the lien as may be reasonably necessary to identify them.

Duration of Lien: An action to obtain a judgment on the mechanic’s lien claim must be commenced within two years from the date of filing of the lien unless the time is extended in writing by the property owner. A verdict must be recovered or judgment entered within five years from date of filing of the mechanic’s lien claim.

Filing Fee: Varies from county to county.

Extent of Lien: Every improvement and the estate or title of the owner in the property is subject to the lien. The claimant may maintain a lien against the owner in fee or any other person having any estate or interest in the property who by agreement, express or implied, contracts for the erection or alteration of the property. If the subcontractor has actual knowledge of the total contract price between the owner and contractor before he began work, his lien will be limited to the unpaid balance to the contractor or a pro rata portion thereof.

Priority of Lien: Liens filed take effect and have priority: (1) in the case of new construction of an improvement, as of the date of the visible commencement of work on the improvement, and (2) in the case of alteration or repair of an existing improvement, as of the date of filing of the mechanic’s lien claim. Any mechanic’s lien filed pursuant to the statute shall be subordinate to a purchase money mortgage and to an open-end mortgage where at least 60 percent of the proceeds are intended to pay or are used to pay all or part of the costs of construction.

Waiver of Liens: A contractor or subcontractor may waive his right to file a mechanic’s lien claim against residential property for the erection, construction, alteration or repair of a residential building, regardless of the total contract price between the owner and the contractor, by a written instrument signed by him, or by any conduct which operates to equitably estop the contractor or subcontractor from filing a claim. Prior lien waivers are permitted with regard to residential property regardless of the total prime contract price between the owner and the contractor. On non-residential buildings, except as stated above with respect to contractor lien waivers on residential property, a waiver by a contractor of lien rights is against public policy, unlawful and void, unless given in consideration for payment for the labor or materials provided and only to the extent that such payment is actually received. Also on non-residential buildings, except as provided above with respect to subcontractor lien waivers, a waiver by a subcontractor of lien rights is against public policy, unlawful and void, unless given in consideration for payment for the labor or materials provided and only to the extent that such payment is actually received, or unless the contractor has posted a payment bond guaranteeing payment for labor and materials provided by contractors. Provided that lien rights may be waived in accordance with the above provisions, the procedure for filing a waiver of liens in the office of the Prothonotary of the Court of Common Pleas of the county or counties where the structure or other improvement is situated, shall remain available.

Additional Information. As a result of the establishment of the State Construction Notices Directory, the following terms have been added to Section 1201 of the Pennsylvania mechanic’s lien statute, which is the definitional section: “Department,” meaning the Department of General Services; “Directory,” meaning the State Construction Notices Directory in new Section 1501.1 of the statute; “Searchable project,” meaning a project consisting of the erection and construction, or alteration or repair, of an improvement costing a minimum of one million five hundred thousand dollars ($1,500,000); “Construction notice,” meaning the following notices related to a searchable project: (i) a Notice of Commencement; (ii) a Notice of Furnishing; (iii) an optional notice of completion; or (iv) an optional notice of nonpayment; and “Searchable project owner,” meaning the owner of record of real property that is a searchable project. The term shall include the owner’s agent.

Statutory Citation: Pennsylvania Consolidated Statutes, Title 49, §§1101 to 1902.

RHODE ISLAND

Who May Claim: Any person who constructs, erects, alters or repairs any building, canal, turnpike, railroad or other improvement with the consent of the owner, tenant or lessee (but not of the state) for all work done and for materials furnished, including architectural and engineering work. Providing materials includes rental or lease of equipment.

A covenant, promise, agreement of understanding in, or in connection with, or collateral to a contract or agreement relative to the construction, alteration, repair or maintenance of a building, structure, appurtenance and appliance, including moving, demolition and excavating connected therewith, purporting to bar the filing of a notice of contract or the taking of any steps to enforce a lien is against public policy and is void and unenforceable.

How Claimed: By serving and filing a notice of intention to claim a lien.

Where Filed: In the records of land evidence in the city or town in which the land is located.

When to File: Within 200 days after the doing of work or furnishing of materials.

Service of Copy of Notice: A copy of the notice must be served not later than 200 days after furnishing work or materials by certified or registered mail with return receipt requested, addressed to the last known address of the owner or lessee or, if not known, to the address of the land. If the notice is returned undelivered, it must be filed with its envelope within 30 days after the return and in no event more than 200 days after the mailing. It is sufficient to describe the realty by metes and bounds and street address, by recitation of the taxing authority’s assessor’s plat and lost designation and street address or by recitation of the book and page of the mortgage and street address.

Practice Tip: Notice should be sent separately to the husband and wife when property is owned jointly.

Practice Tip: A contractor that is contracting directly with the owner or tenant to complete improvements is required to give statutory notice to the owner or tenant within ten (10) days of commencing work pursuant to Rhode Island General Laws §34-28-4.1.

Contents of Notice of Intention: The notice of intention shall contain the name of the owner of record of the land or if the lien is claimed against the interest of the lessee, the name of the lessee, the mailing address of the owner or lessee (name and address to be located in upper left-hand corner), general description of the land, a general description of the work to be done or of the materials to be furnished, the approximate value of the materials and work performed, the name and address of the person for whom directly the work has been done or the materials furnished, the name and address of the person mailing such notice, a statement that the person mailing said notice has not been paid for said work done or materials furnished or both and a statement that the sender may perfect all liens claimed or that could be claimed by filing the notice of intention within 200 days after doing the work or furnishing of the materials. The filing of the notice perfects the lien on work done 200 days before the mailing of the notice, but not for work done before the 200-day period. The statement must be executed under oath and state that the claimant has not been paid. A statutory form is provided.

Duration of Lien: A petition to enforce the lien must be commenced with the Superior Court for the county where the property is located, within 40 days of the date the notice of intention was recorded. A lis pendens must be filed, and the petition must be filed within seven days of the lis pendens. Both the petition and the lis pendens must be recorded/filed within the 40-day time period. Note: This section of the law is a trap for the unwary because a Notice of Lis Pendens is given to let the world know that litigation has been filed yet the Statute requires that the Lis Pendens be recorded prior to the Civil Action being filed.

Filing Fee: $8 for filing notice of intention to claim a lien and renewals.

Priority of Lien: All liens receive distribution pro rata. Liens are senior to any subsequently recorded encumbrances, but junior to prior recorded encumbrances.

Extent of Lien: Lien improvement and land on which situated; when contract with husband of owner consent in writing of both husband and wife required.

Statutory Citation: Rhode Island General Laws, Title 34, Chapter 34-28, §§34-28-1 to 34-28-37.

SOUTH CAROLINA

Who May Claim: Any contractor, subcontractor, laborer or materialman who furnishes labor or materials used in the erection or repair of any structure upon real estate with the consent or at the request of the owner thereof, or of his agent, contractor or subcontractor, doing land surveying, providing private security guard services at the site, preparing plans, preparations, drawings and specifications for improvement to the site, gradings, pruning, well borings, etc. Lien also available to one who rents tools, appliances, machinery or equipment for use in building or structure. Lien for materials includes flooring, floor coverings and wallpaper. Lien claimants must be licensed or registered, as required by law.

How Claimed: By serving upon the owner or the person in possession and filing sworn statement of account describing property covered and naming the owner or owners thereof. If neither the owner nor the person in possession can be located after a diligent search, verified by a sheriff’s affidavit, the statement shall be considered delivered when filed along with the affidavit.

Where Filed: In the office of the Register of Deeds or Clerk of the court of the county where property is situated.

When to Be Filed: At any time after payment is due and within 90 days after the party claiming the lien ceases to labor or to furnish labor or materials for such building or structure.

Notice of Commencement. The owner or contractor in privity with the owner may file a notice of commencement within 30 days of beginning work on the project.

Notice to Contractor. If notice of commencement is filed, no subcontractor or supplier to a subcontractor not in privity with the contractor can file a lien unless it has first filed a notice of furnishing labor or materials; this notice must be given by certified or registered mail not later than 60 days after the last day of work.

Service of Copy of Notice: Copy of notice must be served upon owner or, if owner cannot be found, upon person in possession, or filed with the clerk as specified above in “How Claimed.”

Duration of Lien: Unless a suit for enforcing the lien is commenced and a notice of pendency of the action is filed, within six months after person desiring to avail himself thereof ceases to labor on or to furnish labor or material for such building or structure, the lien shall be dissolved.

Filing Fee: $6; additional page, $1; satisfaction of lien, $5.

Contents of Notice of Lien: A statement of a just and true account of the amount due with all just credits given, together with a description of the property intended to be covered by the lien, sufficiently accurate for identification, with the name of the owner or owners of the property, if known, which certificate shall be subscribed and sworn to by the person claiming the lien, or by someone in his behalf, and proof of mailing to the owner of the copy of the lien. The contractor must also record his contractor license number or registration number on the lien document.

Extent of Lien: The lien shall extend to the building or structure and the interest of the owner thereof and the land or place upon which the same is situated. A subcontractor’s lien shall in no event exceed the amount due by the owner under the contract for construction. The lien covers the value of the lienor’s work and materials. The prevailing party may recover attorneys’ fees.

Priority of Lien: Lien of laborer, mechanic, subcontractor or materialman is subject to existing liens of which he had actual or constructive notice. The liens of laborer, materialman and subcontractor take precedence over the lien of the principal contractor. Mortgage recorded at date of contract is prior to lien, but as to future advances, if the mortgagee has been served with a lien, the lien prevails.

Miscellaneous: Owner is required to pay contractor or subcontractor within 21 days of request for payment of work completed or service provided. Contractor shall pay subcontractor within seven days of receipt of payment from owner.

Statutory Citation: South Carolina Code of Laws, Title 29, Chapter 5, §§29-5-10 to 29-5-430.

SOUTH DAKOTA

Who May Claim: Whoever furnishes skill, labor, services or materials for the improvement, development or operation of any building, fixture, bridge, fence or other structure or public utility or mine or well. Liens also to persons furnishing services, skills, labor, parts, materials, etc., for the alteration, repair, storage, etc., of personal property. (S.D. Codified Laws §44-9-1).

An owner may protect his property against liens for unauthorized improvements by serving upon persons doing the work, within five days after knowledge thereof, written notice that improvement was not made at his instance, or by posting such notice in a conspicuous place on the premises. (S.D. Codified Laws §44-9-4).

How Claimed: By filing verified statement of some person shown by such verification to have knowledge of facts stated. (S.D. Codified Laws §44-9-16). Contractor files a brief statement of the nature of his contract, which statement constitutes his notice of lien. In addition, subcontractor must serve notice of his claim on the owner.

Where Filed: With Register of Deeds in the county or counties where the real property is situated. (S.D. Codified Laws §44-9-18).

When Filed: Subcontractors, materialmen and laborers must file within 120 days after doing the last of such work or furnishing the last item of such skill, material or machinery. (S.D. Codified Laws §44-9-15). Persons other than original contractor may serve upon owner at any time notice of claim subject to S.D. Codified Laws §44-9-1. Owner within 15 days after completion of the contract may require person having such lien to furnish him with an itemized and verified account of the claim, the amount thereof, and his name and address. (S.D. Codified Laws §44-9-14). No action shall be commenced or enforcement of the lien until 10 days after this statement is furnished. (S.D. Codified Laws §44-9-14). Before filing lien with Register of Deeds, claimant must mail to the property owner, at his last known address by registered or certified mail, a copy of the lien statement, and receipt for mailing must be attached to the lien statement and filed in the Office of the Register of Deeds. (S.D. Codified Laws §44-9-17).

Notice of Commencement. A contractor may file a notice of commencement no later than 30 days after beginning work on the project. (S.D. Codified Laws §44-9-50). If a notice of commencement is filed, subcontractors and suppliers must notify the contractor and owner within 60 days of the subcontractor’s or supplier’s last work on the project. (S.D. Codified Laws §44-9-53).

Service of Copy of Notice: Notice must be served by registered or certified mail prior to filing. (S.D. Codified Laws §44-9-17). Filed statement must be accompanied by post office receipt. (S.D. Codified Laws §44-9-17). Owner may demand written itemized account within 15 days after the contract is completed. Owner may then pay claim or claimant may proceed to enforce his lien upon the expiration of 10 days after furnishing such statement. (S.D. Codified Laws §44-9-14).

Duration of Lien: Action to establish the same must be instituted within six years after the date of the last item of the claim as set forth in the filed lien statement; provided that upon written demand of the owner, his agent or contractor served on the person holding the lien, requiring him to commence suit to enforce such lien, suit shall be commenced within 30 days thereafter or the lien shall be forfeited. At the time suit is filed, a notice must be recorded in the deed records. (S.D. Codified Laws §§44-9-24, 44-9-26).

Filing Fee: $30 for the first 50 pages plus $2 for each additional page beginning with page 51. (S.D. Codified Laws §§7-9-15(3), 44-9-19).

Contents of Statement of Lien: (1) Notice of intention to claim and hold a lien and the amount thereof (S.D. Codified Laws §44-9-16); (2) that such amount is due and owing to the claimant for labor performed or for skill, material or machinery furnished and for what improvement the same was done or supplied (§44-9-16); (3) names and addresses of the claimant and of the person for or to whom performed or furnished (§44-9-16); (4) dates when the first and last items of the claimant’s contribution to the improvement were made (§44-9-16); (5) name of the owner thereof at the time of making such statement according to the best information then had (§44-9-16); (6) description of the premises to be charged, identifying same with reasonable certainty (§44-9-16); and (7) itemized statement of account upon which lien is claimed. (S.D. Codified Laws §44-9-16).

Extent of Lien: If work or materials made under contract with owner for an agreed price, lien shall be for the sum agreed on plus cost of any additional material or work agreed on, otherwise for the reasonable value of work done. (S.D. Codified Laws §44-9-6). Lien shall not extend or affect any right in any homestead otherwise except by law. (S.D. Codified Laws §44-9-5).

Priority of Lien: The liens shall, as against the owner of the land, attach and take effect from the time the first item of material or labor is furnished upon the premises by the lien claimant, and shall be preferred to any mortgage or other encumbrance not then of record, unless the lienholder had actual notice thereof. (S.D. Codified Laws §44-9-7). As against a bona fide purchaser, mortgagor or encumbrancer without notice, however, no lien shall be attached prior to the actual and visible beginning of the improvement of the grounds, but a person having a contract for such improvement may file with the Register of Deeds of the county within which the premises are situated, a brief statement of the nature of such contract, which statement shall be notice of his lien for the contract price or value of the contribution of such improvement thereafter made by him or at his instance. (S.D. Codified Laws §44-9-8).

Lien for Improvement of Oil or Gas Well: The mechanic’s lien laws are equally applicable to oil and gas wells. (S.D. Codified Laws §44-9-1(3)).

Statutory Citation: South Dakota Codified Laws, Title 44, Chapter 44-9, §§44-9-1 to 44-9-53.

TENNESSEE

Who May Claim: Every person (to include any legal or commercial entity such as a corporation, limited liability company, partnership, etc.), including land surveyors, architects, engineers and any other person who supervises or performs work or labor or who furnishes material, services, equipment, or machinery in furtherance of any improvement. A contract provision that purports to waive any right of lien is void and unenforceable pursuant to Tenn. Code Ann. §66-11-124(b).

How Claimed: Under Tennessee law, there are two categories of lien claimants: prime contractors and remote contractors. Prime contractors are qualified lien claimants in direct privity of contract with an owner, or the owner’s agent, of the improvement. If the lien claimant is in direct privity of contract with the owner or the owner’s agent, then they qualify as a prime contractor regardless of whether their role on the project is as a general contractor, subcontractor or supplier. Remote contractors are qualified lien claimants who do not have a contract directly with the owner or owner’s agent. These are usually the subcontractors and suppliers. The lien process, including notice requirements and deadlines, are less onerous for prime contractors. A prime contractor has a lien for one year after the date the improvement is complete or is abandoned and until the final decision of any suit properly brought within that time period for its enforcement. In order to preserve the lien as concerns subsequent purchasers or encumbrancers, however, a prime contractor must record a notice of lien with the Register of Deeds within 90 days after the date the improvement is complete or is abandoned. A remote contractor must record a notice of lien with the Register of Deeds and also serve the notice of lien on the owner or the owner’s agent, both within 90 days after the date the improvement is complete or is abandoned. A remote contractor must then enforce the lien by filing suit within 90 days of service of the notice of lien on the owner. In the lawsuit to enforce the lien, prime contractors and remote contractors must seek attachment against the subject real property.

Notice of Non-Payment: A remote contractor may only properly assert a lien for amounts for which the remote contractor has timely served a notice of nonpayment, except a remote contractor is not required to serve a notice of nonpayment to preserve a lien claim for retainage. A notice of nonpayment must be served on the owner and prime contractor in the chain of contractual privity with the remote contractor within 90 days of the last day of each month in which the remote contractor provided services or materials for which it has not been paid. Therefore, multiple notices of nonpayment may be required to be served in order to cover each month in which services or materials were provided. The notice of nonpayment must contain: (a) the name of the remote contractor asserting the claim and the address to which the owner or prime contractor may communicate with the remote contractor; (b) a general description of the work, labor, materials, services, equipment or machinery provided; (c) the amount owed as of the date of the notice; (d) a statement of the last date the claimant performed work or provided materials in connection with the improvement; and (e) a description of the affected real property. A notice of nonpayment is not required for one- to four-family residential units. Remote contractors, however, cannot claim liens against residential real property, which is defined as a one- to four-dwelling unit in which the owner (at the time the work or services were provided) resides or intends to reside as the owner’s principal place of residence. Also, remote contractors cannot claim liens against property consisting of one dwelling unit that is intended to be the principal place of residence of a person or family, when the owner of that property and the general contractor are one and the same person or an entity controlled by that person. Prime contractors are not limited and may assert a lien against all types of private property, including all residential property.

Where Filed: Notices of lien and notices of completion must be recorded with the Register of Deeds in the county where the real property or any affected part thereof is located.

Time of Attachment of Lien: Liens shall relate back to and take effect from the time of the visible commencement of operations, excluding, however, demolition, surveying, excavating, clearing, filling or grading, placement of sewer or drainage lines, or other utility lines or work preparatory therefore, erection of temporary security fencing and the delivery of materials therefore. If there is a cessation of all operations at the site of the improvement for more than 90 days and a subsequent visible resumption of operations, any lien for labor performed or for materials furnished after the visible resumption of operations shall attach and take effect only from the visible resumption of operations.

Filing Fee: For recording a notice of lien or notice of completion, $12, plus $5 per page for each additional page over two.

Contents of Notice of Lien: In order to preserve the priority of the lien, a sworn statement containing: (a) the amount due for the work, labor, materials, services, equipment, or machinery furnished; (b) the name of the lien claimant; (c) the name of the party with whom the lien claimant is in direct privity of contract; (d) the name of the owner of the improved property; (e) the first and last date that work, labor, materials, services, equipment, or machinery were furnished; and (f) a reasonably certain description of the premises, must be recorded with the Register of Deeds.

Lien Amount: Is the contract price. The contract price means the amount agreed upon by the parties or the reasonable value of all work, labor, materials, services, equipment, machinery, overhead and profit. The lien amount cannot include any interest, service charges, late fees, attorneys’ fees or other amounts, which the lienor may otherwise be entitled to by contract.

Priority of Lien: No matter when the work, labor, materials, services, equipment or machinery are furnished, the lien relates back to the visible commencement of operations and takes priority over subsequent purchasers and encumbrancers, so long as the lienor has timely recorded a notice of lien with the Register of Deeds.

Notice of Completion: Upon completion of the project, the owner or purchaser, their agent or attorney or the prime contractor may record a notice of completion with the Register of Deeds. A copy of the notice of completion must be simultaneously served on any prime contractor, except on those projects where the owner or an entity controlled by the owner of the subject property also acts as the general contractor. It is not required that a copy of the notice of completion be served on a remote contractor unless that remote contractor has served a required notice of nonpayment on the owner and prime contractor. Otherwise the remote contractor must learn on its own that a notice of completion has been recorded. Any prime or remote contractor claiming a lien against the project, who has not already recorded and served a notice of lien must serve written notice to the party designated in the notice of completion for receiving notice of claim, stating the amount of the claim, and certifying that the claim does not include any amount owed to the claimant on any other job or under any other contract. For improvements to one- to four-family residential units, the written notice from the lien claimant shall be served on the party designated in the notice of completion within 10 days of the date that the notice of completion was recorded with the Register of Deeds. For all other improvements, the written notice from the lien claimant shall be served on the party designated in the notice of completion within 30 days of the date that the notice of completion was recorded with the Register of Deeds. If the written notice in response to the notice of completion is not served within the required time period, then the lien rights of the lien claimant expire.

Bonds in Lieu of Liens: Owners may protect themselves from liens by recording a payment bond equal to 100 percent of the prime contractor’s contract price in favor of all remote contractors. The payment bond must have sufficient surety. The payment bond must be recorded with the Register of Deeds in every county where the subject property lies before any work, labor, materials, services, equipment or machinery are furnished to the subject property.

Once a lien is recorded, then any person may record with the Register of Deeds a bond to indemnify against the lien. The bond shall be in the amount of the lien, have sufficient surety and be in favor of the person that recorded the lien. The bond operates to discharge the lien.

Miscellaneous: Tennessee’s Truth in Construction and Consumer Protection Act of 1975 requires any contractor who is about to enter into a contract, either written or oral, for improving real property with the owner or owners thereof, prior to commencing the improvement of said real property or making of the contract, to deliver by registered mail or otherwise, to the owner or owners of the real property to be improved, written notice advising the owner or owners that: (a) the contractor has a lien upon the property to be improved for one year after the work is completed or material furnished; (b) remote contractors have liens for 90 days after completion of the improvement; and (c) remote contractors may enforce liens even though the prime contractor has been paid in full if the prime contractor has not paid the remote contractors. Failure to comply with the Act is a misdemeanor, but does not affect the lien rights of the contractor.

Statutory Citation: Tennessee Code, Title 66, Chapter 11, §§66-11-101 to 66-11-150.

TEXAS

Who May Claim: Any person, including architects, engineers, surveyors, contractors, and subcontractors, who performs labor, specially fabricates material, even if not delivered, or furnishes labor or materials for construction or repair of a house, building or improvement, for the construction or repair of levees or embankments, for the reclamation of overflow lands or for the construction or repair of any railroad may claim a lien. The word “improvement” includes: (a) abutting sidewalks and streets and utilities in or on those sidewalks and streets; (b) clearing, grubbing, draining or fencing of land; (c) wells, cisterns, tanks, reservoirs or artificial lakes or pools made for supplying or storing water; (d) pumps, siphons and windmills or other machinery or apparatuses used for raising water for stock, domestic use or irrigation; and (e) planting orchard trees, grubbing out orchards and replacing trees and pruning of orchard trees. Additionally, any person who provides labor, material or other supplies for the installation of landscaping for a house, building or improvement, including construction of a retention pond, retaining wall, berm, irrigation system, fountain or other similar installation, under or by virtue of a written contract with the owner or owner’s agent, has a lien.

How to Claim: If the claimant has a direct contractual relationship with the owner, then the only step required to perfect a lien claim is that claimant must file an affidavit claiming a lien with the county clerk of the county in which the property is located by the 15th day of the fourth calendar month after the day on which the indebtedness accrues. A person who files an affidavit must send a copy of the affidavit by registered or certified mail to the owner or reputed owner not later than the fifth day after the affidavit is filed with the county clerk. If the claimant has a direct contractual relationship with the original contractor, then in addition to filing the lien affidavit, the claimant must also give notice to the owner or reputed owner, with a copy to the original contractor, of the unpaid balance not later than the 15th day of the third month following each month in which all or part of the claimant’s labor was performed or material was delivered. This notice is commonly referred to as a “fund trapping” notice and must state “that if the claim remains unpaid, the owner may be personally liable and the owner’s property may be subjected to a lien unless the owner withholds payments from the contractor for payment of the claim, or the claim is otherwise paid or settled.” If the claimant is a second tier subcontractor or below, i.e., does not have a direct contractual relationship with the original contractor, then in addition to filing the lien affidavit and sending the fund trapping notice, the claimant must also give notice to the original contractor of the unpaid balance not later than the 15th day of the second month following each month in which all or part of the claimant’s labor was performed or material was delivered. This notice is commonly called the “preliminary notice.” All notices must be sent by registered or certified mail.

Where to File: The lien affidavit must be filed with the county clerk of the county in which the property is located.

When to File: The lien affidavit must be filed not later than the 15th day of the fourth calendar month after the day on which the indebtedness accrues. Indebtedness to an original contractor accrues on the last day of the month in which a written declaration by the original contractor or the owner is received by the other party to the contract stating that the original contract has been terminated, or on the last day of the month in which the original contract has been completed, finally settled or abandoned.

Special Procedures: In addition to the procedures outlined in the “How to Claim” section above, the following notices and deadlines may also be necessary.

(a) Contractual Retainage Claim. If an agreement providing for retainage exists, written notice must be given to the owner or reputed owner not later than the earlier of the 30th day after the date the claimant’s agreement providing for retainage is completed, terminated or abandoned; or the 30th day after the date the original contract is terminated or abandoned. If the agreement is with a subcontractor, the claimant must also give notice within that time to the original contractor. The notice must generally state the existence of a requirement for retainage and contain the name and address of the claimant, and if the agreement is with a subcontractor, the name and address of the subcontractor. Notice of the contractual retainage agreement must be sent to the last known business address of the owner or reputed owner and to the original contractor, if applicable. A lien for contractual retainage is valid only for the amount specified to be retained in the contract between the claimant and the original contractor or between the claimant and a subcontractor. If a claimant properly sends its notice of contractual retainage, then the claimant has until the 15th day of the fourth month after labor was performed or material furnished under its contract to file its lien affidavit on contractually retained funds. This period, however, may be cut short. If an owner files an affidavit of completion for the original contract and the owner sends a copy of the affidavit of completion to the claimant in the manner described in the “Affidavit of Completion” section below, the claimant must file its lien affidavit within 40 days after the date of completion stated in the affidavit of completion. If an owner sends notice related to termination or abandonment of the original contract to the claimant in the manner described in the “Notice of Termination or Abandonment” section below, the claimant must file its lien affidavit within 40 days after the date of termination or abandonment stated in the notice. If an owner sends written demand for the claimant to file its lien affidavit, the claimant must file its lien affidavit within 30 days after the owner sends the notice of demand to the claimant.

(b) Statutory Retainage Claim. During the progress of work under an original contract for which a mechanic’s lien may be claimed, and for 30 days after the work is completed, the owner must retain: (1) 10% of the contract price of the work to the owner; or (2) 10% of the value of the work, measured by the proportion that the work done bears to the work to be done, using the contract price or, if there is no contract price, using the reasonable value of the completed work. The retained funds secure the payment of artisans and mechanics who perform labor or service and the payment of other persons who furnish material, labor, or specially fabricated material for any contractor, subcontractor, agent or receiver in the performance of the work. A claimant has a lien on the retained funds if the claimant: (1) sends the notices required by the Texas Property Code in the time and manner required; and (2) files an affidavit claiming a lien generally not later than the 30th day after the work is completed. However, if an owner sends an Affidavit of Completion or Notice of Termination or Abandonment in the manner described below, the claimant must file the lien affidavit not later than the 40th day after the original contract has been completed, terminated, or abandoned.

(c) Notice of Specially Fabricated Items. If a claim is based on specially fabricated items, the claimant must notify the owner not later than the 15th day of the second month after the month in which the claimant receives and accepts the order for the specially fabricated items. The notice must state that the order was received and accepted as well as the price of the order. In cases where indebtedness was incurred by one other than an original contractor, the claimant must also give notice to the original contractor.

Duration of Lien: Suit must be filed within two years after the last day a claimant may file a lien affidavit, or within one year after completion, termination or abandonment of the work under the original contract, whichever is later. For claims arising from a residential construction project, suit must be filed within one year after the last day the lien claimant may file a lien affidavit, or within one year after completion, termination, or abandonment of the work, whichever is later. Where a surety bond is filed indemnifying against liens on a private improvement, the claimant must sue on the bond within one year after the claim is perfected. If the bond is not recorded at the time the lien is filed, the claimant must sue on the bond within two years following perfection of its claim.

Filing Fee: The filing fee depends upon the length of the lien affidavit to be recorded and varies from county to county.

Contents of Statement of Lien: The affidavit claiming a lien must contain the following: (1) a sworn statement of the amount of the claim; (2) the name and last known address of the owner or reputed owner; (3) a general statement of the kind of work done and material furnished by the claimant, and, for a claimant other than an original contractor, a statement of each month in which work was done or material was furnished for which payment is requested; (4) the name and last known address of the person by whom the claimant was employed or to whom the claimant furnished the material or labor; (5) the name and last known address of the original contractor; (6) a description, legally sufficient for identification, of the property sought to be charged with the lien; (7) the claimant’s name, mailing address and, if different, physical address; and (8) for a claimant other than the original contractor, a statement identifying the date each notice of the claim was sent to the owner and the method by which the notice was sent. The form requirements of the affidavit are liberally construed, and the affidavit must “substantially comply” with the statutory requirements to perfect a lien, as well as be signed by the claimant before a notary. To satisfy the requirement of a sworn statement, courts have held that the affidavit must contain a jurat; a mere acknowledgment is insufficient. The instrument must recite that the necessary oath was administered. The affidavit is not required to set forth individual items of work done, or material furnished or specially fabricated, and may use any abbreviations or symbols customary in the trade.

Demand for Payment: If an owner has received proper notice of an unpaid claim, and is therefore authorized to withhold funds, the claimant may then proceed to make a demand for payment. A copy of the demand must be sent to the original contractor, who may give written notice to the owner that it disputes the claim. If the original contractor does not dispute the claim within 30 days after the original contractor receives the demand, the owner must then pay the claim. The demand may accompany the notice of an unpaid claim, but may not be made after the expiration of the time within which a claimant may secure a lien for the claim. This demand for payment has the effect of placing the burden on the original contractor to dispute the claim within 30 days, or the claim is to be paid directly by the owner.

Extent of Lien: The lien secures payment for: (1) the labor done or material furnished for the construction or repair; (2) the specially fabricated material, even if the material has not been delivered or incorporated into the project, less its fair salvage value; or (3) the preparation of a plan or plat by an architect, engineer or surveyor. The amount of a lien claimed by a subcontractor may not exceed:

(1) an amount equal to the proportion of the total subcontract price that the sum of the labor performed, materials furnished, materials specially fabricated, reasonable overhead costs incurred and proportionate profit margin bears to the total subcontract price; minus (2) the sum of previous payments received by the claimant on the subcontract. The lien extends to the house, building, fixtures or improvements, the land reclaimed from overflow, or the railroad and all of its properties, and to each lot of land necessarily connected or reclaimed. The lien does not extend to abutting sidewalks, streets and utilities that are public property.

Priority of Lien: For standard construction work, all mechanic’s liens are on equal footing without reference to date of filing and all mechanic’s liens relate back to the commencement of construction of improvements or delivery of materials to the land on which the improvements are to be located. If the amount of statutory retainage and funds trapped by the owner after receipt of a fund trapping notice letter is insufficient to pay all lien claims in full, the lien claimants share the funds pro rata. However, a lien claim for fixtures or improvements that can be removed without material injury to the land or preexisting improvements, takes priority over all other liens, even if not first in time, and the fixture or improvement may be removed and sold separately. Some examples of items that Texas courts have considered removable without material injury to the property include carpets, appliances, components of air conditioning and heating equipment, smoke detectors, burglar alarms, light fixtures and door locks.

Lien on Money Due Public Works Contractor: To the extent a public works project is not covered by an applicable payment bond as defined in the Texas Government Code, and all notices are otherwise provided, a person who furnishes material or labor on such project has a lien on the money, bonds, or warrants due to the contractor for the improvements.

Liens for Improvement of Oil or Gas Wells: A mineral contractor or subcontractor has a lien to secure payment for labor or services related to the mineral activities. “Mineral contractor” means a person who performs labor or furnishes or hauls material, machinery or supplies used in mineral activities under an express or implied contract with a mineral property owner. “Mineral property owner” means an owner of land, an oil, gas or other mineral leasehold, or an oil or gas pipeline or right-of-way. “Mineral activities” means digging, drilling, torpedoing, operating, completing, maintaining or repairing an oil, gas or water well, an oil or gas pipeline, or a mine or quarry. The lien extends to the material, machinery and supplies furnished, and to the land, leasehold, and oil or gas well for which the labor performed or the material was supplied, and the buildings and appurtenances on this property. However, a lien created by performing labor or furnishing materials for a lease holder does not attach to the fee title in the property. To claim a lien, a claimant must file an affidavit with the county clerk of the county in which the property is located not later than six months after the day the indebtedness accrues. Not later than the 10th day before the day the affidavit is filed, a mineral subcontractor claiming the lien must serve written notice on the property owner that the lien is claimed.

Lien on Homestead: A lien affidavit that relates to a homestead must contain the following notice conspicuously printed, stamped or typed in a size equal to at least 10-point boldface or computer equivalent, at the top of the page:

NOTICE: THIS IS NOT A LIEN, THIS IS ONLY AN AFFIDAVIT CLAIMING A LIEN.

For a lien on a homestead to be valid, the fund trapping notice required to be given to the owner must include or have attached the following statement:

“If a subcontractor or supplier who furnishes materials or performs labor for construction of improvement on your property is not paid, your property may be subject to a lien for the unpaid amount if: (1) after receiving notice of the unpaid claim from the claimant, you fail to withhold payment to your contractor that is sufficient to cover the unpaid claim until the dispute is resolved; or (2) during construction and for 30 days after completion of construction, you fail to retain 10% of the contract price or 10% of the value of the work performed by your contractor.

If you have complied with the law regarding the 10% retainage and you have withheld payment to the contractor sufficient to cover any written notice of claim and have paid that amount, if any, to the claimant, any lien claim filed on your property by a subcontractor or supplier, other than a person who contracted directly with you, will not be a valid lien on your property. In addition, except for the required 10% retainage, you are not liable to a subcontractor before you received written notice of the claim.”

To claim a lien on a residential construction project the lien affidavit must be filed not later than the 15th day of the third calendar month after the day on which the indebtedness accrues.

Affidavit of Completion: An owner may file an affidavit of completion with the county clerk of the county in which the property is located. A copy of this affidavit must be sent by certified or registered mail to the original contractor not later than the date the affidavit is filed and to each claimant who sends a notice of lien liability to the owner not later than the date the affidavit is filed or the 10th day after the date the owner receives the notice of lien liability, whichever is later. A copy must also be sent to each person who provides labor or materials and who furnishes the owner with a written request for a copy.

Notice of Termination or Abandonment: The Texas Property Code requires an owner to provide notice to all subcontractors who have given notice to the owner of an unpaid claim if the original contract is terminated or abandoned after the date the subcontractor’s notice is given. A subcontractor may also request, at any time, notice from the owner of termination or abandonment, by sending a request for notice by certified or registered mail to the owner. If an owner sends notice of termination or abandonment on or before the 10th day after the original contract is terminated or abandoned, it is prima facie evidence of the date the original contract was terminated or abandoned for purposes of filing lien affidavits.

Discharge: A mechanic’s lien may be discharged by recording a release of lien signed by the claimant, failure to initiate suit, or recording a final judgment providing for discharge or filing a bond.

Fraudulent Liens: Section 12.002 of the Texas Civil Practice and Remedies Code provides a civil cause of action against persons who fraudulently file, or attempt to file, documents purporting to create a lien on property. The statute imposes liability in the amount of the greater of $10,000 or actual damages, plus attorney’s fees, court costs and exemplary damages, on persons found to have made, presented or used a fraudulent lien or claim against real or personal property. Importantly, however, a person claiming a lien under Chapter 53 of the Texas Property Code is not liable for the making, presentation or use of a document or other record in connection with the assertion of the claim, unless the person acts with intent to defraud. Thus, a lien claimant that makes an inadvertent or good faith mistake or error in the filing of a mechanic’s lien will not be subject to liability for filing a fraudulent lien.

Waivers and Releases of Lien and Bond Claim Rights: Texas has four statutory forms for releases of lien and bond claim rights. These forms are specifically set out in Texas Property Code §53.284. The parties in the construction chain utilizing these forms are directed to this statute in order to comply with Texas law. A waiver and release releases the owner, the owner’s property, the contractor, and the surety on a payment bond from claims and liens only if (1) the waiver and release substantially complies with one of the forms approved by the Texas legislature; (2) the waiver and release is signed by the claimant or the claimant’s authorized agent and is notarized; and (3) in the case of a conditional release, evidence of payment to the claimant exists.

Forms for Waiver and Release of Lien or Payment Bond Claim: A waiver and release given by a claimant or potential claimant is unenforceable unless it substantially complies with one of the following forms applicable to the particular circumstance:

STATUTORY FORM #1: Conditional Waiver and Release on Progress Payment. This form is used if a claimant or a potential claimant is required to execute a waiver and release in exchange for, or to induce the payment of, a progress payment, and makes the receipt of payment a condition precedent to the enforceability of the waiver and release. The statutory form is as follows:

CONDITIONAL WAIVER AND RELEASE ON PROGRESS PAYMENT

Project __

Job No. ___

On receipt by the signer of this document of a check from __ [maker of check] in the sum of $__ payable to _ [payee or payees of check] and when the check has been properly endorsed and has been paid by the bank on which it is drawn, this document becomes effective to release any mechanic’s lien right, any right arising from a payment bond that complies with a state or federal statute, any common law payment bond right, any claim for payment, and any rights under any similar ordinance, rule, or statute related to claim or payment rights for persons in the signer’s position that the signer has on the property of __ [owner] located at __ [location of property] to the following extent: __ [job description].

This release covers a progress payment for all labor, services, equipment, or materials furnished to the property or to __ [person with whom signer contracted] as indicated in the attached statement(s) or progress payment request(s), except for unpaid retention, pending modifications and changes, or other items furnished.

Before any recipient of this document relies on this document, the recipient should verify evidence of payment to the signer.

The signer warrants that the signer has already paid or will use the funds received from this progress payment to promptly pay in full all of the signer’s laborers, subcontractors, materialmen, and suppliers for all work, materials, equipment, or services provided for or to the above referenced project in regard to the attached statement(s) or progress payment request(s).

Date:   __

__                     (Company Name)

By:     __                     (Signature)

__                     (Job Title)

SUBSCRIBED AND SWORN TO BEFORE ME, the undersigned notary, on the _day of __, 201_.