We’re happy to announce the launch of our new website, and the introduction to a number of new services that helps your company Lien Smarter…and Get Paid.

Express Lien’s list of improvements makes our company the clear industry leader in providing web-based solutions for contractors and others in the construction industry who manage and file preliminary notices, mechanics liens and other lien documents.

The improvements and new features include:

Free Deadline Calculation & Management

Lien rights are valuable to our clients, and so it’s important to protect these rights by meeting statutory deadlines.   Managing these deadlines has proved difficult, since they are complicated, and change depending on where you’re working, the type of work performed, and more.

Express Lien offers lien deadline calculation and management for free.   You input the details about your project, and Express Lien will calculate your project’s deadlines.   When you login to the Lien Pilot, you’ll see all upcoming deadlines, ensuring that your company timely sends notices and liens…and protects its most powerful collection tools.

Improved Lien Pilot to Manage Orders, Projects and Lien Documents

When logging into Express Lien’s new Lien Pilot, clients will be met with a cleaner and more intuitive interface.   Users are able to manage project details, quickly check on the status of orders, input information to calculate and manage lien deadlines, and more.

The Lien Pilot is an asset to your collections department.   From here, you can organize the delivery of notices and liens, prevent lien rights from expiring, and cleanly keep track of your collection efforts on a non-paying construction project.

A Smarter Lien Wizard

The new Wizard is smart.    As you input information about your construction project, the Lien Wizard reduces the types of documents available to you to order.   By the time you’re ready to select your document, you’ll only see documents applicable to your project’s state, your role in the project, and the stage of the work.    The Wizard will also display the notice requirements applicable to your project, so you can review these before deciding which type of document you’d like to file.    If you are still unsure, the Lien Wizard will make suggestions to you.

Our service is completely web-based, meaning you don’t have to install, service or upgrade any software.  Everything is right where you need it, when you need it.

Plus, there’s no pressure to spend anything with our company.  You can mange you project data and deadlines without joining any memberships, without paying a monthly fee and without spending a nickel.   The nation’s most intuitive and efficient web-based lien management system is yours absolutely free.

When you’re ready to file a lien with us, you can painlessly make the order using our new Lien Wizard.   Express Lien is a revolutionary service that makes filing liens easy and intuitive.  You give us the project details, and we’ll have the lien form filled-in, filed, sent to interested parties and uploaded to your account.   It’s easy and reliable, and all done for one low flat fee.

Speak with someone today if you have any questions.  We’re glad to help your company Lien Smarter.

See their article here and how these clauses work.  As a contractor you need to be aware of your right to payment and potential roadblocks on the way to getting paid.

One of the most important defenses to the “Pay When Paid” clause is your right to lien a project, and consequently the owner. Since the owner’s failure to pay the general contractor has caused your inability to recover payment, a lien will allow you to proceed against that party in  a legal action for payment.

Read the article to better understand your rights and the tools you can use to ensure payment. Remember that owners and surety bonds can be reached with a properly filed lien.

Contact ExpressLien.Com in order to protect your right to payment.

One of the most difficult things to do as a construction attorney is to try and educate your supplier clients about the types of information they need to be collecting when selling materials. Suffice it to say that in the event that you, as a supplier, want to file a lien, you need to be prepared with the requisite information.

What Do You Need to Know?

Here are the necessaries:

(A) The Property Address/Tax Assessor Number - obtaining the legal description is required, but your attorney can generally assist you here. But, you need to make sure you have the right address. Addresses change during remodel and reconditioning of property. So, if you can get the tax assessor parcel number – you are in the best shape.

(B) The Owner Name & Address - Louisiana law provides you with a claim against the property owner (See below) under La. R.S. 9:4802(A)(3). Though your attorney may be able to rescue this information from the property records, its always a good idea to have the information readily available, for purposes of sending pre-lien notices (See below).

(C) The Contractor’s Name & Address - We don’t necessarily mean your contractor client. La. R.S. 9:4802 also provides you with a legal cause of action agains the project’s general contractor. So, please be certain to obtain that contractor’s name in order to send pre-lien notices.

(D) The Dates of Delivery – Keep those bills of lading! Oftentimes lien disputes with suppliers come down to a matter of days in calculating whether or not a lien is timely  (see below). It is good practice to keep a log of all material deliveries and keep signed bills of lading to prove delivery.

What Notice is Required?

Suppliers are required to send a Notice of Non-Payment at least 10 days prior to filing any lien. There is a caveat – this notice is only required on residential projects. However, it is good practice to send this notice out on all projects, for purposes of good collection tactics and pre-lien settlement of amounts due.

A notice should include:

(A) the name and address of the seller of movables;

(B)  a general description of the materials provided;

(C) a description sufficient to identify the immovable property against which a lien may be claimed, and

(D) a written statement of the seller’s lien rights for the total amount owed, plus interest and recordation fees.

The notice must be sent to the contractor and to the owner via certified mail return receipt.

NOTE: Be advised that in projects where a notice of contract has been filed, there is a cut off date for providing notice. Notice of Non-Payment must be sent out 75 days from the last date of the month in which materials were delivered, and in no event longer than the statutory period for filing the lien.

How and When Do I File My Lien?

A supplier’s lien is filed just like a contractor lien, but there are some additional time obligations.

If a general contractor files a notice of contract and subsequently files a notice of termination then the supplier must file its lien within 30 days from the date of the filing of a notice of termination.

If no notice of contract has been filed, then the supplier has a longer period. In that event, the supplier has until 70 days from the date of substantial completion or from the date of filing a notice of termination.

A lawsuit must be intiated within one year from the date of filing in order to extend the lien and make it enforceable.

How Can I Best Protect Myself?

Under La. R.S. 9:4822(K), a supplier may send the owner and contractor a request for notice, demanding that the owner provide them with the a copy of any notice of termination filed, or otherwise the date of substantial completion, at least three days from filing or declaring substantial completion.

If an owner fails to to provide this information, then they are responsible for your attorneys fees.

It is good practice to put together a notice that goes out to all project owners on projects that you ship materials to.

Being careful and following the rules will ensure that your lien is safe.

But if a homeowner (or other interested party) files a bond in response to the lien, does that defeat the purposes of the lien itself?

Quite simply, no.

What is a lien bond?

Most mechanic liens statutes give property owners and other interested parties in a construction project the ability to file a bond in response to a party’s filing of a mechanic’s lien.   Most states require the amount of the bond to equal more than 100% the lien claim.

In Louisiana, for example, a lien bond must be 125% the amount of a claim.   In Washington, the bond must be 150% the claim amount.

The bond itself is deposited with the recorder or clerk’s office and theoretically “takes the place” of the lien. A filed bond, therefore, usually has the effect of eliminating any barriers to the sale or transfer of property and nullifying any rights to sue parties without contractual privity.

So, if a lien can be bonded and all of the lien’s benefits nullified…what’s the point of the lien?

The Bond’s Benefits

While the lien bond acts to nullify some positive aspects of a party’s claim of lien, it does not defeat the purpose of the lien statutes.   The claimant loses some benefits of the lien itself, but it gains the benefits of the bond.

Here are some benefits of the bond:

• The entire amount in dispute (plus an additional amount – 25%, 50%, etc.) is filed with the court, and is securely awaiting determination of ownership.   This means that upon a court award, you won’t have to spend any money “collecting” the judgment.   The money is there.
• The lawsuit to foreclose or enforce your lien becomes a lot less complicated.   Sometimes, a subcontractor’s lien claim can include a handful of parties (owners, GCs, suppliers, etc.).   The more parties in litigation, the more expense and procedural hurdles.   When a lien is bonded, it reduces the litigation to a one-on-one dispute and narrows the scope (and expense) of the action.

In short, while a bonded lien does not prevent the sale or transfer of property and may reduce the number of parties a claimant can sue….the bond also eliminates the need for those remedies.  It places the entire amount in dispute (plus sum) into the reach of the claimant, and the claimant can move forward in a clean and uncomplicated procedural action to recover the funds.

If your lien is bonded, it has already succeeded to some degree (it has produced the cash).  Now, it’s only a matter of proving that the cash is yours.

Today Betsey Rue, and her best friend Sam (office neighbor Wolfe Law Group’s 3 year old Bichon Frise) were featured on WomansDay.com as the Cutest Pets of the Day. Check it out.

We invite our employees to bring their own pets to the office. Betsey Rue and Sam are supervised in the New Orleans office by Oscar (the 3 year old French Bulldog of WLG founder Scott Wolfe).

While liens act a lot like mortgages, they certainly are not identical to mortgage instruments.

First, in most states, mechanics liens themselves expire.    Most states require that the contractor file a lawsuit to “enforce” or “foreclose” on the lien within a certain time period (sometimes short), to extend the life and effectiveness of a lien.   Here are some example timeframes:

In Louisiana, liens must be enforced within 1 year from filing.  In Washington, lien foreclosure is due within 8 months of filing.  In California, you must foreclose within just 90 days of filing!

Second, depending on the state, liens are given more or less “priority.”    Lien priority effects the order the instruments are paid in the event of a property sale or foreclosure.   In other words, if a property is foreclosed upon but sold for an amount less then the sum of all liens, and there are two mortgages and a mechanics lien on record, who gets paid and who doesn’t?

The answer to this question depends on your state.   In Louisiana and Washington, liens take a junior priority to mortgages and similar instruments.  In other states, however, the rules are or, depending on circumstances, can be different.    In Virginia, mechanics liens have priority over construction loan mortgages.   In Minnesota, depending on when the respective instruments are filed, a mechanics lien can take priority over mortgage-type instruments.

Maryland is one such state where a contractor could truly run into problems. The State of Maryland, differs vastly from its nearby Virginia and District of Columbia. Though VA and DC follow the nationwide rule of record first and file second, Maryland requires a file first and record second procedure.

We want to go through some of these mechanics so that you can become better acquainted with your obligations in the State of Maryland.

Why Lien?

Similar with most states, Maryland’s lien action enables the claimant to obtain a right and action against uphill general contractors and property owners, when they do not ensure that lower level parties are paid for services or materials delivered at a job.

Even in situations where a subcontractor, or other low level party, enters into a contract with a contractor, which conditions payment upon payment to the contractor from the owner, a claimant who remains unpaid may utilize the lien law at any time to preserve its right to payment.

In Architectural Systems, Inc. v. Gilbane Building Co., 760 F. Supp. 79 (D. Md. 1991), a Maryland Court interpreted § 9-113(b) of the Maryland Real Property Code to state that liens are not barred by “payment if paid” or “payment when paid” clauses. Thus, a claimant is free to file as long as they meet other procedural guidelines.

Who Can Lien?

Like most other states, all persons providing labor and materials for buildings erected or for repairs and improvements to existing buildings have lien rights.

However, in the case of “repairs of improvements,” only if such improvements and repairs equal 25% of the value of the improved building does one acquire lien rights. Md. Real Prop. Code Ann. § 9-102(a).

Further, architects and union trustees have also been entitled to claims.

How Do I Protect My Lien Rights? Are There Notices?

Maryland is tough on notice. Under the seminal case, Tyson v. Masten Lumber & Supply, Inc.,
44 Md. App. 293, 408 A.2d 1051 (Md. Ct. Spec. App. 1979), the Court expressly stated that improper notice will void a lien. Thus, care must be afforded when preparing to secure your lien.

(A) General Contractors

If you contract directly with the owner – you are not required to provide notice prior to filing your lien. This includes all general contractors under the statute, as well as those subcontractors or suppliers who have an agreement with the owner to provide services or materials.

(B) Subcontractors/Suppliers

A subcontractor, or other 2nd tier claimant, who does not directly contract with the owner, will lose its lien rights unless within 90 days after doing work or furnishing materials, the owner is given written notice of the intention to claim a lien.

Md. Real Prop. Code Ann. § 9-104 provides the form for this lien. The law explicitly states the mailing of the notice within 90 days, by registered or certified mail, will constitute effective notice.

(C) Exceptions to the Notice Rule?

There are some minor exceptions to the notice rules. Actual notice to an owner of a claimant’s intention to file has been successful, meaning that as long as a claimant can prove that the owner knew about the impending lien claim, it cannot defend on the basis of lack of written notice.

How Do I File My Lien?

This is the tricky part. Unfortunately, Maryland has elected to make liening a property a substantial investment. This makes it more difficult for Express Lien to assist you in filing your lien, but not impossible.

Lien actions MUST be initiated by way of a prior legal action. Yep, that’s right, you must file a lawsuit first in order to obtain an order from a court of competent jurisdiction that entitles you to file a lien.

A petition to claim lien must be filed in the court for the county where the work was completed within 180 days from the completion of work or last date of delivery of materials.

Work has been interpreted to mean the last date of work being provide by the claimant, which can extend past the date of substantial completion.

In order to file this action, you should consult with a Maryland attorney or contact the courts to inquire about a form.

At a minimum, the petition will require you to submit a verified account of all material facts and copies of all material papers, including contracts, orders, invoices and payment receipts. Also, the claimant must illustrate that the notice was properly served, if required by law.

The petition must be served upon the owner, who will be ordered to show cause why the lien should not be ordered within 15 days. An owner may answer and defend the petition, but otherwise, if it fails to answer, the petition shall be deemed admitted and the lien valid.

Once your action is filed and you obtain an order from the court, you may contact Express Lien to get your lien filed!

What Can I Recover in My Lien?

Unlike other states, a Maryland subcontractor can make a claim for the full extent of contractual amounts that are due under its contract with a contractor. Thus, the owner cannot defend that it has already paid the contractor for amounts due to the contractor, as long as notice was properly delivered.

The contract will determine what you can claim on your lien. Any additional charges over the costs of the original work may be claimed, as long as they are spelled out in the contract.

What Pitfalls Might I Encounter?

Maryland has bond laws which provide a manner in which the owner, or general contractor, can have the lien released before payment to a subcontractor. This will result in your lien claim becoming a lawsuit for recovery.

But, Maryland does not have a slander or improper lien law which would subject a claimant to liability. As long as the  lien is not proven to have been made (1) falsely and (2) spitefully, the lien will simply be dismissed without further damage to the claimant.

Can I Waive My Lien Rights?

The short answer is NO!

Section § 9-113 of the Maryland Real Property Code was revised in 1981 to expressly prohibit lien waivers prior to beginning of the work at the property. Of course, during the work, and upon payment, contractors may obligate you to provide them with a lien waiver for work completed, but they cannot abridge your rights to claim a lien during the contracting stage.

A copy of pertinent Maryland lien laws can be found here. Let Express Lien help now by providing notice of your claim or by filing your lien (after being ordered by the court)!

While the general availability of filing a lien is a simple rule in North Carolina, it is more complex to determine how a party can file in the state.   The manner of filing a lien in North Carolina depends on the claimant’s role in the project.    We take a shot at explaining the North Carolina lien scheme in this post, and compare it to how liens are filed in other states like Washington and Louisiana.

Those Who Contract With The Owner:

Those who contract with the “owner” on a North Carolina construction project, and who are not paid for labor or materials, may file a “traditional” mechanics lien with the county recorder.

The lien must be filed within 120 days from the last date labor or materials are furnished to the project, and must follow other formalities required by statute.   These formalities are set forth in N.C. Gen. Stat. § 44A-12, which also provides a form to be used when filing.

This lien actually attaches to the property at controversy, affecting the property’s title.

Those Who Do Not Contract With The Owner:

The rules are a bit different for those parties to a construction project who do not contract with the owner.  Who are these parties?  Subcontractors, Second-Tier contractors and suppliers, Third-Tier contractors and suppliers, etc.

Unlike parties who contract with the owner (i.e. generals), lower tier contractors cannot file a ‘traditional’ lien.   Instead, these contractors protect their right to payment by serving a “Notice of Claim of Lien Upon Funds.”   The requirements for this notice is set forth in N.C. Gen. Stat. § 44A-19.

This notice does not affect a property’s title, and it is not filed with the county records.  Instead, it is served upon every party “up the chain” from the claimant.

So, for example, a first tier subcontractor would deliver notice of claim to the owner and the general contractor.

While a traditional lien provides a claimant a lien on the property, this type of lien provides the claimant only with a lien on the funds at controversy.   After receipt of the notice, if the owner or other party makes payments down the construction chain with funds that are liened (i.e. eventually belong to the claimant), the party who improperly made the payment will be personally liable to the claimant for payment.

If the party is the owner, the claimant may then file its notice with the country recorder.

Comparing with Other States:  Louisiana and Washington

One of the problems with lien statutes across the country is balancing the rights of laborers and materialmen to get paid with the interests in protecting a property owner from being required to pay for the services twice, and to have its property title illegiatemly affected.

Different states balance these issues differently.

In Washington, lower-tiered contractors are required to provide the owner with notices prior to filing a lien.

In Louisiana, there is a focus on the public records, allowing owners to file notices in the public records that affect the interests of lien claimants.

North Carolina balances these issues differently, essentially allowing only those who contract with the owner to immediately affect a property owner’s title.  If the contract is not with the owner, the lien at first only affects the funds.  If the parties continue to refuse the claimant payment, the problem grows, and more parties become personally liable for the debt and the property’s title is at stake.

Express Lien’s Services:

Express Lien prepares, files and serves both “Liens’ and “Notice of Claim of Lien Upon Funds” in North Carolina.

With regard to “Liens,” filed by those who contract with the property owner, there is a $295.00 flat charge which includes the document preparation, filing and service upon interested parties.

With regard to “Notice of Claim of Lien Upon Funds,” this too has a flat lien charge of $295.00.   Since most of these notices require multiple documents and multiple services (one on each party up the chain), Express Lien discounts the additional liens required.   The first “Notice of Claim of Lien Upon Funds” is $295.00, each additional lien for the same project is $105.00.

Get Started Now.

A new law blog on Mechanic Lien Law in Illinois just posted on this subject as the law applies to its state.   The bottom-line:  it’s tough for lien waivers to pass legal muster in Illinois.

Here’s a quote from the post:

Under Illinois law, courts regularly will not enforce a lien waiver because it is contrary to public policy and the Illinois Mechanics Lien Act. The Mechanics Lien Act provides that no contract for construction services shall include a lien waiver provision. The law’s intention is to protect contractors and sub-contractors who perform work on a property and are not paid for their labor and materials.

So contractors and suppliers in Illinois may not be restricted by “no lien” clauses in their contracts.  If you’re ready to file a lien in that state, Express Lien can help.

This is a good reminder that liens can be as small or as big as the project’s debt to a company, from $1 to $3.1 million.

Just be sure to avoid making common mistakes, send your notices and file on time.

Express Lien has experience filing liens that are more than $1,000,000, and can help get your company’s lien on country or parish records.   Use the Construction Lien Blog and the online lien filing tools that comes free with your account to help understand the lien laws and requirements in your state.

Click here, and learn more about how we can help you Lien Smarter…and Get Paid.