Take Care When Filing Claims to Protect Your Lien Rights
If you are filing a mechanic’s lien claim you may need to do so in a new way in order to avoid having it declared invalid. Specifically talk to your attorney and/or lien service because in addition to filing the statutory “safe harbor” form that is commonly used in the industry you should attach a separate “acknowledgment” filing or incorporate those provisions into the statutory form.
Right now simply relying on the statutory form alone as contractors have routinely done in the past may expose a contractor to the risk of a judge finding that the claim of lien is insufficient. That is because of a lower court’s ruling in the Williams v. Athletics Fields case. In the Williams case a lower court invalidated a lien filed by a lien service on behalf of a contractor Athletic Fields Inc. Although the lien service used the exact lien form which the statute says “shall be sufficient” to state a valid claim of lien the Court of Appeals held that the lien was not properly “acknowledged” pursuant to another section of the lien law statutes and was therefore invalid.
This case is currently before the State Supreme Court on appeal and AGC is working to have the decision overturned. On behalf of AGC and its Legal Affairs Committee Mike Grace of Groff Murphy submitted a friend-of-the-court brief and presented oral arguments before the Supreme Court.
AGC is concerned that hundreds of pending liens could potentially be ruled invalid even though the contractors have in good faith been using the statutory form for years. AGC believes contractors should continue to be able to rely on the “safe harbor” form but until the Williams case is final the prudent thing to do is to add an additional “acknowledgment” filing to the lien claim form.
Attorneys representing contractors are generally aware of this new quirk but contractors may not be and they should check with their attorneys should the filing of a lien claim become necessary.
For more information contact AGC’s Director of Government Affairs Rick Slunaker 360-352-5000.