TABLE OF CONTENTS. A. Introduction: The Nature of a Lien B. The Advantages of a Lien C. Only One Set of Lien Laws... 9

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1 TABLE OF CONTENTS Preparing and Filing a Lien... 1 A. Introduction: The Nature of a Lien... 1 B. The Advantages of a Lien... 5 C. Only One Set of Lien Laws... 9 D. Establishing Your Right to Lien Deal with a Registered General Contractor a. Telephone Labor and Industries b. Go to the L & I website You Must be Registered Work Must be Ordered by the Owner a. When Work is Ordered by a Tenant b. When Extra Work is Ordered by the General Contractor without Knowledge or Approval From the Owner c. When Work is Ordered by a Prospective Purchaser of the Property Special Consideration for Indian Land Maritime Liens E. Preliminary Notices Provide the Disclosure Statement to Customer Notice of Right to Claim Lien i -

2 a. The Form Which Must be Used b. To Whom Do You Send the Notice c. How to Send Notice d. When to Send Notice e. Special Rules for Remodeling Projects f. Unclaimed Notices g. Consequences of Failure to Give Notice h. When Notice is Not Required i. Condominiums j. Owner s Actual Knowledge not Enough k. Coercion l. Agency Special Notice Requirements for Architects/Engineers F. Claim of Lien The Form Which Must be Used Preparing the Lien a. Correctly completing the lien form b. Additional Information Required by County Recording Offices c. The cost of recording a Claim of Lien d. Obtaining a copy of the recorded lien Amending the Claim of Lien a. Ownership b. Party who orders work c. Property description d. Amount due e. Dates of performance Recording and Mailing the Claim of Lien Copy of Claim of Lien to the Owner When to Record the Claim of Lien Eight Month Life of Lien ii -

3 8. Extending the 90 Days Within Which to Record the Claim of Lien Separate Residential Units Time for Filing Recording a Single Lien Against Two or More Properties The Work Must be Performed on Owner s Property Off-Site Fabrication Work Calculating the Amount of Lienable Labor and Materials Apportionment of Labor and Materials When a Project is Temporarily Abandoned Materialman to Materialman May Not Record a Lien Claimant Completes Work under Contractor Directly with Owner Liability for Recording Lien in Excessive Amount Effect of General Contractor s or Subcontractor s Bankruptcy Effect of Owner Filing Bankruptcy a. If Owner Files Bankruptcy Before Lien is Recorded b. If Owner Files Bankruptcy After Lien is Recorded c. Can Bankruptcy Trustee Avoid Mechanic s Lien in Bankruptcy Removal of Improvements from Property Release of Lien Rights Removal of Frivolous Liens Rights of Owner Bonding Around a Lien Rank and Payment of Lien Non-Exclusivity of Lien Claim Material Exempt from Attachment Lien Binds Community Interest Second Tier Materialmen and Subcontractors Work Performed on Fixtures Sale and Delivery on Open Account Delivery of Materials Sufficient to Form Basis of Lien Loss of Lien Rights a. The Inadvertent Loss of Lien Rights iii -

4 b. Loss by Operation of Contract c. Loss by Execution of Check d. Loss by Execution of Waiver Subordination Agreements Joint-Payee Checks Liens for Construction Management G. Foreclosure of the Lien Introduction Rules of Foreclosure Priority of Lien and Application of Foreclosure Proceeds Recovery of Attorneys fees and Costs Recovery of Interest Homesteads H. Notice to Lender Introduction Who are the Players and Pieces a. Real Property Lender b. Interim or Construction Financing c. Draws d. Potential Lien Claimant Rules for Sending the Notice to Lender Duties of Lender Liabilities for Improper Notice iv -

5 Claims on State Public Works A. No Lien on Public Works Projects Payment Bond Retainage Fund B. Definition of Public Work C. Collecting Against the Prime Contractor s Bond Bond is Required by State Law Preliminary Ten Day Notice Requirement How to File a Claim Against the Bond Following up on Bond Claim Filing Suit Against the Payment Bond a. Where Suit is Brought b. Who Are Parties in Lawsuit c. When Suit Must be Filed d. Arbitration What You Can Collect Rank and Priority D. Claims Against Prime Contractor s Retainage Retainage is 5% Claim of Department of Revenue and Labor and Industries Sixty Day Materialman s Notice (Retainage Claim) Claim Against the Retainage Filing Lawsuit to Foreclose Your Retainage Claim E. Amount of Recovery From Retainage F. Attorney Fees RCW and RCW Offers of Settlement RCW v -

6 4. Contract/Subcontract G. Wrongful Withholding of Payment H. Interest I. Priorities of Claims Against Retainage Federal Bond Claims A. Introduction to the Miller Act B. Definitions of Public Work C. Persons Covered Under the Miller Act Off-site Work: Architects and Engineers D. Assignment of Rights E. Preliminary Step to Perfecting a Claim (Miller Act) Multiple Contracts Your Subcontractors Work May Extend the Deadline The Correction-or-Repair vs. Original Contract Test F. Time to Sue on Bond G. Amounts Recoverable Under Miller Act H. Waiver of Miller Act Rights I. Interest J. Attorney Fees K. Priority of Claims vi -

7 Contractor s Registration Bond Claims A. Bonding Requirements for Contractors B. Who May File a Claim Against the Bond C. How to File a Claim Time Limits and Procedures for Filing a Claim Attorney Fees and Costs D. Priorities of Payment from the Bond Claims Against the Bond The Amount Paid from a Bond E. Collecting from a Cash Security Deposit F. Collecting from an Electrical Contractor s Bond Bonding Requirements for Electrical Contractors Filing a Claim Against an Electrical Contractor s Bond vii -

8 APPENDICES Notice to Customer (Disclosure Notice)... 1 Disclosure Notice Cheat Sheet Claim of Lien... 2 Claim of Lien Cheat Sheet Letter to Owner Notice to Real Property Lender... 3 Notice to Real Property Lender Cheat Sheet Notice of Right to Claim Lien... 4 Notice of Right to Claim Lien Cheat Sheet Notice of Furnishing Professional Services... 5 Notice of Furnishing Professional Services Cheat Sheet Letter to Landlord/Tenant... 6 Release of Lien... 7 Conditional Waiver of Lien Rights... 8 Unconditional Waiver of Lien Rights... 9 Conditional Release of Lien Notice to be Placed on Property Set-aside Letter to Project Lender The Complete Washington Lien Laws Notice to Prime Contractor Notice to Prime Contractor Cheat Sheet Notice of Claim Against Contractor s Bond & Retainage Fund Claim Against Bond & Retainage Cheat Sheet Letter to Bonding Company Release of Claim Against Contractor s Bond & Retainage Fund Assignment of Lien Rights Notice to Contractor (Federal) Miller Act Parties Protected/Unprotected by Miller Act Payment Bond Letter to Federal Agency for Info viii -