Service Area: Collection Services

Changes to Iowa Mechanic’s Lien Law in Effect January 2022

Posted on May 17, 2021 by wpengine - Legislative Updates & News Alerts, Mechanic's Liens & Bond Claims, Preliminary Notices & Construction Credit

What are the Changes?

Iowa Governor, Kim Reynolds, has signed HF 561 into law. The bill contains two key changes to Iowa’s mechanic’s lien law. Though the new statute won’t take effect until January 1, 2022, here’s a quick look at what’s changing.

First Change: Liens Covering Multiple Counties Can be Posted Once to Registry

Iowa is upping its efficiency game. Under the current law, if a mechanic’s lien is filed against parcels that cover multiple counties, the claimant is required to post a lien to the registry for each county. Under the new statute, claimants can file one lien.

This is the amended statute text; the changes are underlined:

Section 1. Section 572.8, subsection 3, Code 2021, is amended to read as follows:

3.A lien perfected under this section shall be limited to the county or counties in which the building, land, or improvement to be charged with the lien is situated. The county or counties identified on the mechanics’ notice and lien registry internet site at the time of posting the required notices pursuant to sections 572.13A and 572.13B shall be the only county or counties in which the building, land, or improvement may be charged with a mechanic’s lien.

Second Change: Can Recover Attorney Fees if Lien is Bonded Off

If you file a mechanic’s lien, the lien is bonded off, and you are the prevailing party, you will be entitled to recovery of attorney fees. Some sources indicated this has been a contested issue among district courts. Fortunately, the new statute clears up any question.

This is the amended statute text; the changes are underlined:

Sec. 2. Section 572.32, Code 2021, is amended to read as follows:

572.32 Attorney fees — remedies.

1.In a court action to enforce a mechanic’s lien, or an action brought upon any bond given in lieu thereof, a prevailing plaintiff may be awarded reasonable attorney fees.

2.In a court action to challenge a mechanic’s lien posted on a residential construction property, or any bond given in lieu thereof, if the person challenging the lien or defending against any action on the bond prevails, the court may award reasonable attorney fees and actual damages. If the court determines that the mechanic’s lien was posted in bad faith or the supporting affidavit was materially false, the court shall award the owner reasonable attorney fees plus an amount not less than five hundred dollars or the amount of the lien, whichever is less.

For Now, Follow Current Statutory Guidelines

Remember, these changes do not go into effect until January 2022. Until then, if you need to file a lien on parcels that cover multiple counties, you should continue to post a lien to the registry for each county where the property is located.

Bonus: Securing Lien Rights in Iowa

For commercial projects, you should serve the preliminary notice upon the prime contractor within 30 days after first furnishing. The mechanic’s lien should be posted to the Mechanics’ Notice and Lien Registry within 90 days from last furnishing and suit should be posted to the registry within 2 years from the 90-day lien filing period or within 30 days from the receipt of a demand to commence suit.

For residential projects, the mechanic’s lien and suit deadlines are the same as commercial projects. However, the preliminary notice requirements are different. Residential projects are considered single- or two-family dwellings occupied/used primarily for residential purposes. For prime contractors, the notice should be served upon the owner, and a Notice of Commencement should be posted to the registry no later than 10 days after commencement of the project. For subcontractors or suppliers, post a preliminary notice on the registry as soon as possible to trap funds and serve a copy of the notice upon the owner. A lien, when later filed, may only include labor or materials provided after the preliminary notice is posted and served. If not posted by the prime contractor or owner-builder, a subcontractor or supplier may post a Notice of Commencement on the registry, after which they may post their preliminary notice.

New York Tolling the Lien Line

Posted on May 10, 2021 by wpengine - In Other Commercial Credit News, Mechanic's Liens & Bond Claims

For Whom the Mechanic’s Lien Deadline Tolls; New York Mechanic’s Lien Extended

Did the March 20, 2020 Executive Order issued by Governor Andrew Cuomo toll the mechanic’s lien clock for lien claimants? In a recent New York Supreme Court decision, the answer is yes. The lien claimant’s lien remained valid, because the extension of lien and/or suit deadline was “extended” to account for time courts were closed/reduced due to the pandemic.

New York Lien Law

The general guidelines for mechanic’s lien rights on private commercial projects in New York are reasonably straightforward. There is no required preliminary notice, the mechanic’s lien on commercial property should be filed within 8 months from last furnishing, the lien can be extended if an extension is filed within 1 year from the date of the lien filing, and suit should be filed within 1 year from the date of the lien filing.

The hitch? Well, amid the COVID-19 pandemic, Governor Cuomo issued an Executive Order (EO):

“I hereby temporarily suspend or modify, for the period from the date of this [EO] through April 19, 2020 the following: . . . to limit court operations to essential matters during the pendency of the COVID-19 health crisis, any specific time limit for the commencement, filing, or service of any legal action, notice, motion, or other process or proceeding . . . is hereby tolled from the date of this executive order until April 19, 2020…”

I should note, this EO was extended beyond the April 2020 date as the pandemic progressed, which is addressed below. But, before we go further, what exactly does “toll” mean? Precisely what the court had to determine.

Did the Claimant’s Lien Lapse?

KPM Restoration (KPM) provided construction work for project owner 701 River Street Associates, LLC (Owner). Owner failed to pay KPM for materials/services provided, and KPM filed a mechanic’s lien December 9, 2019, for $229,105.25. According to the court opinion, in June 2020, a partial release of lien was filed, leaving the mechanic’s lien balance of $155,791.73.

Under normal circumstances, KPM should have filed an extension of lien or proceeded with suit to enforce its lien by December 9, 2020; it did not. Based on statute, Owner filed a motion to have KPM’s lien discharged stating KPM did not comply with the deadlines set forth in Lien Law § 17.

KPM argued the deadline was extended based on the Governor’s EO. Here’s KPM’s argument per the court opinion:

“[KPM] contends that the one-year statutory timetable for its compliance with the Lien Law requirements was tolled by Governor Andrew Cuomo’s Executive Order (“EO”) 202.8, issued on March 20, 2020, in response to the COVID-19 pandemic and which tolled commencement, filing or service deadlines of legal actions during the pandemic. Respondent notes that EO 202.8 was subsequently extended up to and until November 3, 2020, by a series of subsequent EOs… Pursuant to EO 202.72, tolling was no longer in effect as of November 4, 2020. [KPM] argues that between March 20, 2020 and November 3, 2020, 228 days passed and therefore, the tolling period extended [KPM’s] deadline to commence an action to foreclose its Lien or to further extend the Lien until July 25, 2021.”

OK, so really, what does “tolled” mean? Did the Governor’s EO actually extend KPM’s extension or suit deadline?

The court relied on a definition from an earlier legal decision “[a] toll suspends the running of the applicable period of limitation for a finite time period, in this instance, 30 days, and `[t]he period of the toll is excluded from the calculation of the time in which the [claimant] can commence an action.'”

Based on this definition, the extension deadline was not suspended, it was tolled. Because the time is tolled, it doesn’t count against the calculated deadline. This means KPM’s lien is valid.

Court Opinion: MATTER OF 701 RIV. ST. ASSOC. LLC, 2021 NY Slip Op 21116 – NY: Supreme Court, Rensselaer 2021

Tolling the Lien Line

2020 was… well, it was a year of challenges and questions. As we move through 2021, we are likely to see more questions about the validity of claims, because EOs were issued throughout the country and the EOs certainly weren’t uniform. Though this claimant lucked out, I wouldn’t bank on all states following suit. Review your deadlines, review your filed documents, make sure you have all documentation in order, and consult an attorney if you have questions about the validity of your claims.

Minnesota Prelien Deadline is 45 Days, Not 72 Days

Posted on April 5, 2021 by wpengine - Mechanic's Liens & Bond Claims, Preliminary Notices & Construction Credit

Minnesota’s Prelien Notice Deadline is 45 Days, Not 72

What happens when your preliminary notice is late? In Minnesota, you may lose your mechanic’s lien rights. One lien claimant served its Minnesota prelien notice 27 days too late and the court invalidated its mechanic’s lien.

Preserving Mechanic’s Lien Rights in Minnesota Starts with a Prelien

If you are a subcontractor or material supplier furnishing to a private project in Minnesota, you should serve the prelien notice upon the owner as soon as possible to trap funds, but within 45 days from first furnishing materials or services.

If you are a contractor who contracts with subcontractors or material suppliers to provide labor or materials, you should include the notice within the written contract with the owner and serve a copy of the contract upon the owner. If no written contract exists, you should serve notice upon the owner within 10 days of agreeing to work on the project.

It’s possible a notice may not be required in Minnesota. For example, the notice may not be required if the project is on non-agricultural land and the project is not wholly residential and is more than 5,000 usable square feet or is to provide or add more than 5,000 total usable square feet of floor space, or a wholly residential project has more than four family units.

The lien deadline in Minnesota is within 120 days from your last furnishing and if you need to proceed with suit, you should need to do so within 1 year from your last furnishing. Did you know Minnesota can be a full paid balance lien state or an unpaid balance lien state? If the 45-day notice is not required, the lien is enforceable for the full amount owed, regardless of payments made by the owner. If the 45-day notice is required, the lien is enforceable for the unpaid portion of the contract at the time the 45-day notice is served.

You can review Minnesota’s statute in full here.

Timberwall Landscape & Masonry Products, Inc. v. DRMP Concrete Limited Liability Co.

Timberwall Landscape & Masonry Products, Inc. (Timberwall) was hired by DRMP Concrete LLC (DRMP) to provide materials for a retaining wall at the Klochkos’ residence. Timberwall began furnishing April 26, 2018. Between March 2018 & May 2018, the Klochkos issued payments to DRMP, and DRMP issued payments to Timberwall; unfortunately, the DRMP payments to Timberwall were returned for insufficient funds.

On July 7, 2018, Timberwall served a prelien notice upon the Klochkos and within the notice, Timberwall stated “[t]o the best of [Timberwall’s] knowledge, [Timberwall] estimate[s] our charges will be $1 plus other good and valuable consideration.” Then, on July 17, 2018, Timberwall filed a mechanic’s lien for $26,161.30 and by September 2018, Timberwall had proceeded with its foreclosure action.

Raise your hand if you know where Timberwall went wrong.

To be fair, if you read the first paragraph, you know what Timberwall did wrong, but for the sake of the story: Timberwall served a prelien notice 72 days from first furnishing, which was untimely in accordance with statute.

The Klochkos argued Timberwall’s lien was invalid because Timberwall failed to timely serve its notice. Timberwall then argued its lien was valid because it made a “good faith effort” to comply with Minnesota’s statute. The court sided with Klochkos.

“Timberwall provided its notice 72 days after its first delivery of materials, and Timberwall does not claim that it tried to provide pre-lien notice within the statutorily mandated 45-day period. Nor does the record reflect any effort on the part of Timberwall to comply with this mandate. The lack of any record evidence reflecting that Timberwall sought to provide pre-lien notice within the statutorily mandated 45-day period supports the district court’s determination that Timberwall failed to make a good-faith effort to comply with the statutory pre-lien notice requirements.”

Because Timberwall failed to serve its notice timely, it lost rights to the mechanic’s lien and was unable to recover payment through the lien process.

The lesson here? Serve your preliminary notices on time, every time.

Warranty Work Doesn’t Extend Washington Lien Deadline

Posted on March 22, 2021 by wpengine - Mechanic's Liens & Bond Claims, Preliminary Notices & Construction Credit

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.

Construction Project Liens: Federal, Public, or Private

Posted on March 15, 2021 by wpengine - Mechanic's Liens & Bond Claims, Preliminary Notices & Construction Credit

It’s Important to Know the Project Type: whether a Project is Private, Public, or Federal

Construction projects generally fall into one of three categories: private, public, or federal. These categories identify the project type and help determine whether you would secure mechanic’s lien or bond claim rights. Project type is dictated by property ownership.

First There’s Private or Public Projects

A private project is a private improvement contracted by a private entity, a public project is an improvement of public works or building under formal contract made by any government authority (the state, county, city, or political subdivision), and a federal project is a contract for the construction, alteration or repair of any public building or public work of the United States.

Private projects may include office buildings, restaurants, stores/retail, or churches, whereas public projects could include public schools, city hall, or the Department of Transportation. Be careful not to confuse public projects with establishments that are open to the public. For example, just because a church is open to the public does not mean the property is publicly owned; similarly, restaurants are open to the public, but the entities that own the property are private entities.

Then There’s Federal Projects

Typically, federal projects may include construction at a United States Post Office, an improvement to a United States Airforce base, or repairs to a Federal Reserve building. However, there may be situations where a federal project is actually a private project or leasehold situation. Frequently, the government will lease building space from another entity, which could change the project type.

In fact, I mentioned the Federal Reserve as being a federal project, but the Federal Reserve Bank is a quasi-public (government entity with private components) banking system. Because of the “quasi” nature, it’s important to carefully review the contract and obtain a copy of any payment bond that may have been issued for the project. While you review the project documentation, I recommend you also review the statutory guidelines for both public and federal projects. If it’s a state where the public bond claim deadline is sooner than a federal bond claim deadline, you may want to track the project as though it is public, this way you are less likely to miss any deadlines.

Quasi Could Also Apply to Private and Public Projects

This notion of quasi projects isn’t limited to federal projects. Another common example is professional sports facilities. Typically, professional sports facilities are quasi-public-private projects, with a public entity owning the property and the sports team leasing the property.

Of Course, Remember Lien on Leasehold

When property is leased, whether it’s publicly or privately owned, you may encounter a lien on leasehold interest. A lien on leasehold interest is real property held by a lessee under lease. When liening a tenant improvement, the statutes vary by state as to whether a mechanic’s lien would be available against the property, the leasehold interest of the tenant, or both.

Projects on Sovereign Territory

If a project is owned by a tribal authority and/or on an Indian Reservation, the mechanic’s lien and bond claim statutes would not apply, as the land would be considered sovereign territory. In some instances, the tribal authority may require a payment bond. Always attempt to confirm whether a payment bond was required and obtain a copy.

Can I Lien a Riverboat?

This question is more common than you may think. Your rights to a mechanic’s lien may be questionable when furnishing materials or services to a riverboat casino. If the materials or services are provided to a “floating” riverboat, Maritime law may apply. If the materials or services are provided to the land at which site the riverboat is docked, mechanic’s lien rights may be available. Like riverboats, construction on oil rigs may fall under Admiralty and Maritime Law.

I Have No Idea the Project Type

Determining whether a project is private, public, or federal can sometimes be difficult. If you are unable to confirm property ownership and the project doesn’t seem to fit nicely in a designated category, you may want to consider additional investigation and review of information. If you need help, we are here for you!

Loves Furniture Bankruptcy & Mechanic’s Liens

Posted on February 15, 2021 by wpengine - Mechanic's Liens & Bond Claims, Preliminary Notices & Construction Credit

Loves Furniture, Taking Mechanic’s Liens to the Mattresses

In January 2021, Loves Furniture, Inc. (Loves) filed for Chapter 11 bankruptcy protection. The bankruptcy petition indicates Loves has between 100-199 creditors, estimated assets between $10,000,001-$50M, estimated liabilities between $10,000,001-$50M, and it believes funds will be available for distribution to unsecured creditors once secured creditors and administrative expenses are paid.

Loves cited warehousing and delivery issues as a major factor in its financial demise. One report indicated the business was “under financial pressure since almost the day it opened.” According to court documents, in April of 2020, without stores, offices, phones, or equipment, not to mention it was the onset of a pandemic shutdown, “Loves was created at the kitchen table of its first employees.”

You may recall, Loves was a successor-of-sorts for Art Van Furniture (Art) which had filed bankruptcy in early 2020. To clarify, I use the term “successor” loosely – the Loves entity was not formed as a result of the Art bankruptcy, rather Loves stepped into the retail holes Art left behind. When Art filed for bankruptcy, it liquidated and vacated its stores, leaving millions in inventory.

In May 2020, Loves entered into an Asset Purchase Agreement for the inventory Art had left behind, which Loves sold for about $7M. Loves moved into many of the vacated Art stores. Unfortunately, several of the vacated stores were dated and required significant work to comply with building code and occupancy regulations.

Contractors, subcontractors, and material suppliers were hired to refurbish these stores. Refurbishments and renovations included everything from repair to buildings where fixtures had been torn out to the tear down and replacement of external store signage. The court document states the total cost of renovation and repair was $4,084,780, some of which remained unpaid at the time of Loves bankruptcy filing.

The Mechanic’s Liens & Getting Paid

Nearly a dozen mechanic’s liens were filed against Loves’ properties in Michigan in December 2020, according to LienFinder™, with claims in excess of $500,000. The top lien claimant was SFV LLGC LLC, a construction management firm. Now that Loves has filed for bankruptcy, how will the claimants recover the funds due to them?

Like many retailers, Loves is involved in tenant or lessee situations. When contracting with the fee simple owner of the real property, the mechanic’s lien attaches to the property itself. When a lessee/tenant contracts for an improvement on real property, the mechanic’s lien may be available against the property, the leasehold interest of the lessee/tenant, or both.

The debtor, Loves, has filed for bankruptcy protection, which means automatic stay orders are in place. The automatic stay prevents creditors, such as the lien claimants, from calling in debts owed.

If the bankrupt party is the tenant, like Loves frequently is, then, where allowed, suit can still be pursued against the fee simple aka the actual property owner. If the bankrupt party is the fee simple owner, not a tenant or lessee, then claimants may not be able to enforce the lien on the real property unless the automatic stay is lifted.

Michigan Mechanic’s Lien Rights

Generally, to secure mechanic’s lien rights on a Michigan private project, a Notice of Furnishing should be served upon the owner, lessee, designee, and prime contractor within 20 days from first furnishing. A late notice may be served, but the lien, when later filed, will be limited to the unpaid portion of the contract at the time the notice is served.

In the event you aren’t paid, you should file your lien with 90 days from last furnishing, then if necessary, and where allowed, proceed with suit to enforce the lien within 1 year from filing the lien.

If you have furnished to an improvement and haven’t been paid, don’t wait – file your mechanic’s lien as soon as possible.

Mechanic’s Liens & New Jersey’s American Dream

Posted on February 1, 2021 by wpengine - Mechanic's Liens & Bond Claims

Are Mechanic’s Liens New Jersey’s American Dream?

Some construction projects can take weeks, months, or years to complete, others like the American Dream in New Jersey, can take decades. American Dream is a Nickelodeon branded mega-mall and entertainment complex in New Jersey. It is reportedly 3 million square feet, with a combined 450+ restaurants and stores, and over a dozen acres of entertainment space, all on state owned land. It has been decades in the making and with millions in mechanic’s liens, it’s not done yet.

Underwhelming Crowds, Staggered Schedules, and a Good Old-Fashioned Curse

Forbes reported the pandemic isn’t the sole factor in the distress of NJ’s American Dream, citing problems with getting various retailers to commit to opening stores within the complex, lower than anticipated crowds, and an odd, staggered opening schedule.

“The amusement park opened when some of the rides still didn’t have approval to operate, and the food and beverage operations were limited to airport kiosk-style refrigerated cases. Visitors couldn’t get a cup of coffee at the complex until a food cart was set up near the entrance to the amusement park. Sections of the parking decks still were under construction and roped off on opening day.

The haste to open piecemeal could have been the result of pressure from lenders, or from retailers who wanted to see concrete signs that the project was moving forward before committing, or financing or construction problems.”

One source commented this project has been cursed from the beginning. “This place has been jinxed since day one, but then again it’s the curse of New Jersey” and “In the 22-23 years I’ve been dealing with the different machinations of this mall, every time there’s a problem we throw more public money in it and it gets bigger.”

Oh, and to circle back to the pandemic a moment. Part of the funding for this project came from a $2.8B Mall of America (in MN) mortgage. As we know, malls have virtually no traffic due to the pandemic – tenants aren’t paying their rents, rents pay the mortgage bills, mortgage bills aren’t paid… you see where I’m going here, right? It’s been reported that Triple Five (American Dream & Mall of America Owner) is now back on track with its mortgage, but who knows what will happen as the pandemic lingers and retailers continue to struggle.

The Lien Ride

Construction Dive reported there had been a revolving door of general contractors on this project. GC’s included Whiting-Turner, Skanska, and the current GC is PCL Construction. This massive project was broken out into 9 smaller projects. “It was a little like eating an elephant one bite at a time,” said PCL General Superintendent Tim Davenport. “It was nine separate $300 million projects.” Which means there were a LOT of (over 150) subcontractors and material suppliers on the project.

Earlier in this post I mentioned this project has been built on state land, begging the question: is the project private or public? The leaseholder is Ameream LLC and New Jersey Sports and Exposition Authority is the reputed property owner. The Authority holds the land lease for the property, which means mechanic’s liens are the appropriate security, and are likely lien on leasehold.

Unlike the fun amusement rides the facility boasts, there has been no shortage of liens on this project. LienFinder™ reports 85 liens have been filed since 2019, with a dozen in the last few months, and over $5M in claims in January 2021 alone. January’s lien claimants include Dant Clayton Corporation which furnished materials & equipment for installation of glass and metal railings.

Other parties who filed liens in January: Bonland Industries, Inc. which furnished ductwork and mechanical work, Construction Resources Corp. which furnished elevator & forklift services, Meadowlands Fire Protection Corp. which furnished fire protection systems, and Johnson Controls Fire Protection LP which furnished life safety and labor.

In New Jersey, lien claimants have an opportunity to file a Notice of Unpaid Balance and Right to File Lien prior to recording the lien. If this notice is filed, the lien would have priority over conveyances subsequent to the filing of the notice. Further, (not that I want any project to go belly up but…) serving a Notice of Unpaid Balance may greatly improve the chance of successfully filing a valid lien after a project owner or other party files a petition in bankruptcy, allowing the lien to relate back to the Notice of Unpaid Balance. The mechanic’s lien should be filed within 90 days from last furnishing, and suit should be enforced within 1 year from last furnishing or within 30 days from receipt of a notice to commence suit.

Will It Be Completed, Or Is there Really a Curse?

It’s unknown when the facility will officially be completed and unknown whether it will survive the tumultuous economic times we are in, but one thing is for sure: don’t wait on payment, file your mechanic’s lien asap.

Notices of Commencement: Top 7 Questions Answered

Posted on January 25, 2021 by wpengine - Mechanic's Liens & Bond Claims, Preliminary Notices & Construction Credit

7 of Your Notices of Commencement Questions Answered

What is a Notice of Commencement? Do all states have Notices of Commencement? Why are these documents important? In today’s post we’ll review 7 of your Notice of Commencement questions.

What Is a Notice of Commencement?

A Notice of Commencement is a notice typically recorded by the owner of a construction project, in the county where the project is located, prior to materials or services being provided to the project. The information provided in the notice of commencement assists in the preparation and service of the preliminary notice.

What Information Is Included within Notices of Commencement?

The Notice of Commencement generally provides the property description, the name and address of the owner, the name and address of the prime contractor, any parties that need to be served with a preliminary notice (i.e., designee), and surety information if the project is bonded.

Do All States Have Notices of Commencement?

No, not all states have a Notice of Commencement. In the states of Florida, Georgia, Ohio, and South Carolina, Notices of Commencement may be issued on public or private projects. In the states of Michigan, Nebraska, Pennsylvania, and South Dakota, Notices of Commencement may be issued on private projects, and in the state of Utah, a Notice of Commencement may be issued on public projects.

The requirements for the Notice of Commencement vary by state, and the recording of the document sometimes triggers the requirement for those working on the project to serve a preliminary notice.

How Can I Find Notices of Commencement?

You can contact parties within the ladder of supply, review county records (if document is recorded), search state specific registries or directories, search LienFinder and/or send a formal request when you serve your preliminary notice.

As a best practice, request a copy of the Notice of Commencement as soon as possible. A copy of the Notice of Commencement is to be made available upon request or a copy may be posted at the jobsite.

Can a Project Have More than One Notice of Commencement?

Yes, it is quite possible for a project to have multiple notices and even amended notices. For example, some projects work in phases, so a Notice of Commencement may be issued for each phase of the construction. Or, there may be different general contractors for different portions of the project, in which case there would be multiple notices.

Can Notices of Commencement Be Terminated?

Yes, it’s possible. For example, in the state of Florida, a Notice of Termination of Notice of Commencement can be filed. The Notice of Termination of Notice of Commencement is a recorded affidavit that terminates/extinguishes an existing Notice of Commencement.

Any Tips on Traps?

You should always look at the date the notice was recorded to ensure it matches up to the time frame the project began, confirm it isn’t expired, and make sure it is for the scope of work you are performing. You should also confirm whether an amended Notice of Commencement has been recorded. Lastly, if the Notice of Commencement indicates the project is bonded, save yourself the struggle & request a copy of the payment bond right away – it’s much easier to get copies at the beginning of a project.