Colorado Court Strikes Mechanics Lien with an Overstated Amount

 

Colorado, like many states, allows mechanics liens to be placed on property where a prime contractor, subcontractor, supplier, and laborer performed work. In Colorado, as in all states, mechanics liens are filed on construction projects. But the mechanics lien laws are a double edged sword, and the lienor must be sure that he is properly liening the construction project.  A recent decision by the Colorado Court of Appeals in Byerly v. Bank of Colorado puts lienors on notice that improperly filed liens will be declared invalid.

The case is unique because it relates to a contract between a developer and a contractor where the fee was not just monetary: the developer was to give the contractor 5 acres of land as compensation in addition to certain monthly monetary compensation.  However, the contract states that the contractor would only receive the land as compensation if the developer was released from the construction loan the bank had issued.  This arrangement appeared to make the payment of the land contingent on certain circumstances: the release of the construction loan by the bank.

Instead, the developer was unable to sell the lots it was developing, and then failed to pay the contractor's fees. The contractor filed a Colorado mechanics liens in the amount of the unpaid monthly fees and for the value of the land it was supposed to receive under the contract. When the bank foreclosed, it attempted to get rid of the contractor mechanics lien by arguing that the amount of the lien was excessive and that a contractor cannot file a lien for an amount over and above the contract price.
The Colorado Court of Appeals held that the maximum amount for which a prime contractor can file a lien is the contract price.  The Court also found that the "conditions precedent" had not been established in order to file a lien for the value of the land, so the filing of a mechanics lien was not valid to the extent that these amounts were included therein.

Note that the court indicated that its holding does not necessarily apply to all circumstances. If the contract has not been recorded as required by statute, then subcontractors, suppliers, and laborers may file a mechanic's lien for the full value of the services and labor provided, regardless of the contract price.

Jet Star Removal

Workers have begun demolition on New Jersey’s Jet Star Roller Coaster. The coaster was hit off of the pier and into the ocean by Hurricane Sandy last October. The picture of this coaster sitting in the sea served as a representation of the devastation that Sandy caused. Construction, or rather destruction, was delayed for months as contractors needed to decide the best way to remove the coaster. They eventually chose to remove it by bringing in a barge with very large crane. Removal began on Tuesday, and was set to be finished within 48 to 72 hours. The rest of Casino Pier, the amusement park where the Jet Star was located, is being rebuilt. They will have 18 rides, including a new pendulum ride, and are set to open this summer.

 

 

Modern Construction Progress Website

 

The Dulles Town Center, in Dulles, Virginia, has begun construction on the new Regal Cinema. This theater is to be 45,000 square-feet, with 10 stadium style theaters, and 1 Regal Premium Experience theater. The theater is set to open next summer, but citizens are able to view the building progress on this construction website. This website is special in that it allows viewers to track the daily progress by clicking on calendar dates, and the website also features things such as a time lapse button, and at the bottom left of the viewing screen is a weather icon, showing the weather for the specific date the viewer has chosen. This website has been around for over a decade, but with its new technology OxBlue is gaining a larger client base, and with good reason. This website is easy to use, and gives everyone easy access to progress on construction, with its modern camera technology.

US Increase in Home Construction, but Decrease in Workers

The demand in the construction industry for the building of new homes is steadily rising. However, it is becoming increasingly difficult for builders and subcontractors to find workers. The home building market is moving forward quickly. In March, the industry reached the 1 million mark, which has not happened since 2008. With this jump in the numbers, it would seem that the home building industry is going well. Unfortunately, laborers are hard to find because when the housing market crashed, the workers left those jobs and found others, which were often times higher paying jobs such as mining or gas drilling. And many of the immigrant workers have also left the industry, either finding different work, or moving back to their home country. Because the workers have found new jobs, they are reluctant if not unwilling to return to the construction industry. Builders are only hiring 75 to 80 percent of laborers needed because that is all they are able to find. And laborers and suppliers are able to raise prices because demand is high. Although it is a slow process, the laborers are increasing, which will aid in meeting the demand in the home construction industry.

Connecticut Mechanic's Liens

Liens filed on private property including the land and buildings of charitable organizations are known as mechanics' liens . In Connecticut, when a construction lien is filed with regard to work performed on privately owned property, it attaches to and encumbers the fee simple ownership of property.
Contractors who have a contract with an owner as well as subcontractors and suppliers who have a contract with a contractor can file a lien. Connecticut also allows design professionals to file liens. 
In Connecticut, the lien claim must arise out of an agreement with, or the consent of, the owner, or of some person having authority to act on behalf of the owner.

Connecticut requires that a Notice of Intent to Claim Mechanic's Lien be served for those who do not have a direct agreement with the owner for the work or materials/services provided. A Notice of intent to lien must be served after work has commenced but no later than 90 days after work has ceased.  A notice of intent to lien does not need to be given prior to recording a mechanics lien, and service of the construction lien certificate itself meets the statutory notice of lien requirements.
Connecticut mechanics' liens on private property must be filed with the town clerk of the town in which the project is located within 90 days of the last date the lienor provided materials or services to the Project.

Service of the lien must be served upon the owner by a process server if the owner residse in the same town as the liened property.  Otherwise, service can be made by certified mail within 30 days after filing the mechanic's lien.  Be sure to serve each property owner separately.

Keep in mind that your lien is not valid forever.  You have one year after filing the mechanic's lien to enforce your lien by filing a lawsuit to foreclose.

Colorado Mechanic's Liens

In Colorado, liens filed on private property or on funds relating to a public project are known as Mechanic's Liens. When a Colorado mechanic's lien is filed with regard to work performed on privately owned property, it attaches to and encumbers the fee simple ownership of property. Colorado mechanic's liens filed with regard to public projects attach to the funds held by the public owner.
Contractors, as well as subcontractors, design professionals, sub-subcontractors and material suppliers can file a Colorado mechanic's lien. If a company supplies material to a material supplier, they are not eligible to file a Colorado mechanics lien claim.
At least 10 days prior to filing a Colorado mechanic's lien statement, the claimant must provide a notice of intent to the owner and the prime contractor.  The filing of a Colorado lien statement must be completed within four months after the day on which the lien claimant last performed labor or furnished materials.  Once the mechanic's lien has been filed, be sure to serve it on the owner via certified, return receipt mail.

Filing Califonia Mechanic's Liens

In California, liens filed on private property are known as Mechanic's Liens. When a California mechanic's lien is filed with regard to work performed on privately owned property, it attaches to and encumbers the fee simple ownership of property.

In most circumstances, California does not allow mechanic's liens to be filed on government owned property. However, nearly every project on government owned project is required to have a payment bond in place to protect subcontractors and suppliers. Filing a claim against the payment bond secures your claim for money in a way that is similar to filing a lien claim. In addition to the payment bond, stop notices may also be filed. 

Contractors, as well as subcontractors, design professionals, sub-subcontractors and material suppliers can file a California mechanic's lien. If a company supplies material to a material supplier, they are not eligible to file a California mechanic's lien claim.

Within 20 days of the commencement of work on the property, subcontractors and suppliers should provide written notice to the owner, the general contractor and the construction lender that they are performing work on the property. If the notice is served late, then the claimant can claim a California mechanic's lien for the value of the labor or materials provided in the 20 days preceding the service of the notice and thereafter.

Prime contractors must file a California mechanic's lien within 60 days after a notice of completion or notice of cessation is recorded, or if no recording of completion or cessation is accomplished, within 90 days after the completion of the work of improvement. Subcontractors and materialmen must file a California mechanic's lien within 30 days after a notice of completion or notice of cessation is recorded, or if no recording of completion or cessation is accomplished, within 90 days after the completion of the work of improvement.
LienItNow.com provides you with a simple mechanic's lien questionnaire form to complete, which provides us with all of the information needed for us to process your document. With that information, LienItNow.com prepares the appropriate lien claims.

Thanks For Your Patience During Hurricane Sandy Outage

To all our valued clients, 

First and foremost, for anyone who was impacted by Hurricane Sandy, we hope that you and your family are safe and on the road to recovery. If there is anything that we at LienItNow can do for you, your firm or business, please let us know. It has been a trying time, but we continue to be so impressed by the way everyone has pulled together.

As a New Jersey based business, we experienced the full force of this historic storm. While our headquarters were unreachable for some time, we were able to continue servicing all our customers through our backup location and were always fully operational. We are now back in our main offices in New Jersey and it's business as usual at LienItNow. Try as she did, Sandy has not affected our proven national network, secure data locations and the ability to provide quick and effective lien filing and other services to our clients.

We are very proud of the team at LienItNow as they continue to go above and beyond the call to help each other as well as our clients during this event. We remain committed to providing the highest quality services and responsiveness, and are ready to assist with any need.

Please feel free to contact us at 1-888-543-6765, and feel free to reach out to your LienItNow client services representative with any questions you may have. We truly do appreciate the opportunity to serve you and again, please let us know if we can be of any assistance to you, your firm or your business. 

ALL DOCUMENTS SHOULD BE SENT TO THE LIENITNOW OFFICE INDICATED BY YOUR CUSTOMER SERVICE REPRESENTATIVE: Now that business is back to normal in all of our locations, please resume sending documents to the locations provided to you in the email instructions sent to you with the draft document. 

DISRUPTIONS IN CONNECTICUT, NEW JERSEY, NEW YORK AND PENNSYLVANIA: Due to widespread power outages and the closing of government offices, filings in some parts of CT, NJ, NY, and PA may experience delays. Please be assured that as soon as each clerk's office reopens, we will have your document ready to be filed. Most states will extend deadlines due to government office closures resulting from natural disasters.

 

If you have any questions about your order, please call us at 1-888-543-6765, or click here to start the lien filing process now.

Minnesota Permits Service of a Lien By an Officer of a Lienor's Company

The Minnesota Supreme Court recently ruled that an officer of a party may personally serve a mechanics’ lien statement. In Eclipse Architectural Group v. Lam, 814 N.W.2d 692 (Minn. 2012), the officer of a Minnesota mechanics’ lien claimant personally served a mechanics’ lien statement on the owner of the property. The property owner claimed that the lien should be invalidated because a rule of civil procedure prohibits a party or officer of a party from serving “a summons or other process.” The purpose of the rule is to require a disinterested person, typically a sheriff or private process server, to effectuate service. Because a disinterested person did not serve the mechanics’ lien statement, the property owner claimed that the lien should be invalidated. The Minnesota Supreme Court rejected this argument, holding that a mechanics’ lien statement is not a “summons or other process.” As a result, a party or an officer of a party may serve a mechanics’ lien statement.

Massachusetts Does Not Permit Waiver of Statutory Payment Protection

The Massachusetts Supreme Judicial Court has held that a subcontractor’s rights to pursue a payment bond required by law on a public project can’t be nullified by contract. The payment bond law does not expressly prohibit waiver by contract, and the court had to decide whether public policy concerns preclude enforcement of a contractual waiver. The case is Costa v. Brait Builders, decided on August 1, 2012.
The surety had argued successfully at the trial court level that a subcontract clause waiving the sub’s payment bond rights was enforceable, and the trial judge agreed. The surety had contrasted the payment bond law with a provision in the Massachusetts mechanic’s lien law that expressly prohibits any attempt to require advance waiver of lien rights. On appeal, the SJC reviewed the purpose behind the payment bond law, which – according to its title – was “for expediting payment to general contractors and subcontractors and improving the flow of funds in the construction industry.” The court also noted that payment bonds are required by three different construction procurement laws in the state. Thus, “the strong public policy behind the §29 bond requirement renders unenforceable a provision purporting to waive claims against such a bond.”
The court acknowledged that there are competing views on the general topic of private contracts waiving statutorily-granted rights, but concluded: “We think the better view is that [the payment bond law] embraces a substantial public policy, precluding waiver. Accordingly, we conclude that article 7 of the subcontract [waiving such rights] is unenforceable.” The case has been remanded, and the surety will find itself on the hook for a judgment in favor of the sub issued after the original trial.