Rhode Island May Be The Smallest State in Land Size, but Rhode Island’s Mechanic’s Liens are Mighty
Rhode Island may be the smallest state in land size, but don’t let that fool you when it comes to securing your mechanic’s lien or bond claim rights, because Rhode Island means business!
Rhode Island’s Notice of Possible Mechanic’s Lien
Generally, there is no statutory provision requiring a preliminary notice for private projects, unless you contracted directly with the owner.
If you contract with the owner, you should:
- Obtain a written contract and include notification within the contract, or
- Serve notice upon the owner prior to first furnishing materials or services.
- When contracting directly with a tenant/lessee, also serve the fee owner with the notice.
R. Thomas Dunn recommends including the language within the contract, and serving the notice via certified mail, return receipt requested prior to furnishing, in his article An Easy Way to Preserve Your Mechanic’s Lien Rights in Rhode Island.
“The Notice of Possible Mechanic’s Lien may also be served by certified mail at ‘any time prior to commencing work or delivery of materials for construction, erection, alteration or repair as set forth in this chapter.’ This sounds straightforward but this deadline can be easily missed when construction commence with limited notices to proceed and/or oral agreements to start preliminary aspects of the work as contract amounts and other commercial terms are being negotiated. If the work has begun, but the contract has not been executed, include the Notice of Possible Lien into the written contract with the owner.”
Dunn also notes, if the Notice of Possible Mechanic’s Lien is required and isn’t served, you may lose your lien rights.
“Failure to provide this notice results in the contractor losing its ability to assert a mechanic’s lien for the labor and material supplied to the Project… In addition to losing its mechanic’s lien rights, a contractor who fails to serve the Notice of Possible Mechanic’s Lien is required to indemnify and hold harmless the owner from any costs incurred on account of liens claimed by the contractor’s subcontractors or suppliers unless the owner did not yet pay the general contractor.”
Rhode Island Mechanic’s Lien & Suit
You should serve and file the lien (Notice of Intention) within 200 days from first furnishing materials or services. The lien may be served and filed as late as 200 days after last furnishing materials or services but, it will only be effective for materials or services furnished 200 days prior to serving and filing the lien. (Fun Fact: some states have a trapping notice, Rhode Island has a trapping lien!) Act quickly if you need to enforce your lien; the suit deadline is 40 days from the date of the lien filing.
Rhode Island Bond Claims
Much like Rhode Island private projects, there is no statutory provision requiring a preliminary notice on public projects — regardless of who you contracted with. Typically, payment bonds are required for general contracts exceeding $150,000, and you should always attempt to obtain a copy of the payment bond from the public entity contracting for the work.
Your bond claim notice should be served upon the prime contractor within 90 days from last furnishing and you should file suit after 90 days from last furnishing materials or services, but within 2 years from last furnishing materials or services, or within the terms provided in the payment bond, whichever is later.
Bonus: Rhode Island Has Prompt Pay Statute
You can read the statutory guidelines in full here, but here’s the at-a-glance:
- If the contractor submits its bill(s) correctly, the owner should pay within 30 days of receipt of proper invoice
- The contractor should pay its subcontractors within 10 days of receipt of payment from the state.
There are, of course, caveats such as “This section shall not apply to contractors or subcontractors performing work pursuant to a contract awarded by the department of transportation unless the subcontractor provides a payment and performance bond in an amount equal to the contract between the contractor and subcontractor.” So, if you have questions, I recommend carefully reviewing statute, asking an attorney for guidance, or…
Contact NCS today!