Does Warranty Work Extend the Mechanic’s Lien Deadline? Not in Washington
We are frequently asked whether punch list or warranty work will extend the mechanic’s lien deadline. Generally, punch list items and warranty work aren’t considered substantial last furnishings which could extend a mechanic’s lien deadline. However, it is a state-by-state determination, and in some cases, it’s a court determination. Recently, a lien claimant in Washington discovered warranty work did not extend its mechanic’s lien deadline.
Short on Time? Here’s Word from the Court
“The question we answer today is whether the 90 days to record a claim of lien is extended by a contractor performing warranty work—that is, work performed after substantial completion to correct nonconforming work. We strictly construe “repairing” to exclude a contractor’s correction of its own work and conclude that performing warranty work does not extend the 90 days to record a claim of lien.”
BRASHEAR ELEC., INC. v. NORCAL PROPS., LLC, Wash: Court of Appeals, 3rd Div. 2021
Backstory: Brashear Electric, Inc. (Brashear) is a subcontractor hired by general contractor, Vandervert Construction, Inc. (Vandervert) for two commercial retail construction projects on adjacent properties: the Norcal and Blue Ridge projects.
According to the Court of Appeals opinion and based on Vandervert’s contract with the project owners, Vandervert’s contract with Brashear required Brashear to “assume all warranty obligations applicable to its works under Vandervert’s contracts with the owners.” Vandervert’s contract with the owners included the provision “for a period of one year after substantial completion, to promptly correct work not conforming to the contract requirements.” In other words, Vandervert agreed to warranty work for one year after completion of the project.
Now, here are some key dates:
- June 28, 2017: Brashear completed work on Norcal project
- September 29, 2017: Brashear completed work on Blue Bridge project
- January 17, 2018: Brashear was called back to fix a leak at Norcal project
- January 30, 2018: Brashear filed mechanic’s liens for $12,830.81 on Norcal project and $36, 278.50 for Blue Ridge project
- February 2, 2018: Vandervert filed for receivership
- June 2018: Brashear proceed with suit to enforce its liens
Washington’s mechanic’s lien statute states the lien should be filed within 90 days from last furnishing materials or services. Brashear’s last furnishing date on the Norcal project was 6/28/2017 and its last furnishing date on the Blue Bridge project was 9/29/2017. This means the mechanic’s lien deadlines were 9/26/2017 and 12/28/2017 respectively. Brashear didn’t file its liens until 01/30/2018 – way beyond the statutory deadlines.
On appeal, Brashear argued its lien deadlines should be calculated from the last date it was on the project for warranty and repair work, which was 01/17/2018. Calculating from this date, of course, would mean Brashear’s mechanic’s liens were filed timely. According to Brashear, the statute was incorrectly interpreted.
The plain language of statute is:
“Every person claiming a lien under RCW 60.04.021 shall file for recording… a notice of claim of lien not later than ninety days after the person has ceased to furnish labor, professional services, materials, or equipment…”
Further, under RCW 60.04.011(5)
“Constructing, altering, repairing, remodeling, demolishing, clearing, grading, or filling in, of, to, or upon any real property or street or road in front of or adjoining the same…”
I bolded two words: labor and repairing. Technically, when Brashear returned to the job site, it did provide labor to repair the leak. OK, so what does the Court of Appeals have to say?
First the Appeals Court reviewed the standard definition of “repair”, then stated it cannot interpret one word, it has to interpret the series of words (i.e. constructing, altering, repairing, remodeling…), and finally determined:
“With respect to repairing, contractors are hired and paid to restore something that is broken. They are not hired and paid to correct their own nonconforming work. Rather, their own work is warrantied, and they are contractually obligated to correct it at no cost to the owner… A lien is intended to secure payment for money owed. A contractor is not paid to correct its own nonconforming work. Warranty work, therefore, is not lienable.”
Warranty Work ≠ Lienable Work
Yes, unfortunately for Brashear, warranty work is not lienable work under Washington statute. Take time to carefully review your contract and as a best practice, conservatively track your lien and bond claim deadlines – it’s better to be too early than too late.