Mechanic’s (Construction) Lien Claim
A mechanic’s lien is a powerful tool for collecting money because it allows for a claim directly against the property where you furnished your labor and materials. This means that an owner may be required to pay twice.
To mitigate this situation, Wyoming law requires that you, as a potential lien claimant, provide the owner with certain notices (described below) so that the owner has an opportunity to obtain lien waivers, issue joint checks, or take other action to avoid lien claims. (I have found that these notices carry much weight on my law firm letterhead. In fact, oftentimes my notices result in payment without having to actually file a Lien Statement or foreclosure action.)
Liens are complex and complicated. Please pay attention to the notice requirements and deadlines and let me know if you have questions. You need to get this right….
Persons entitled to lien
- Every contractor (which also includes architects, professional engineers, and surveyors contracting with the owner), subcontractor or materialman performing any work on or furnishing (which includes selling and renting) any materials for any building or any improvement upon real property of an owner has for work done or plans or materials furnished a lien upon the building or improvements, and upon the real property of the owner on which they are situated.
Contact me for help determining whether you are entitled to a lien.
Preliminary Notice
- Contractors must send their Preliminary Notice to the owner before receiving any payment from the owner, including advances.
- Where appropriate, I recommend that contractors include their Preliminary Notice in their prime contract with the owner.
- Subcontractors and materialmen must send their Preliminary Notice to the owner (and provide a copy to the contractor) within thirty (30) days after first providing services or materials to the project.
- If you fail to send a Preliminary Notice, you will have no lien rights.
- Your Preliminary Notice must be in substantially the same format and contain the same information as that prescribed by statute. Here is Wyoming’s statutory Preliminary Notice form.
Contact me for help with your Preliminary Notice.
Notice of Intention to File Lien
- Contractors, subcontractors, and materialman must send a Notice of Intention to File Lien to the property owner no later than twenty (20) days before filing their Lien Statement.
- If you fail to send a Notice of Intention to File Lien, your lien will most likely be invalid.
- There are certain circumstances under which failing to send a Notice of Intention to File Lien may not be a fatal to your lien rights. We can discuss…
- Your Notice of Intention to File Lien must be in substantially the same format and contain the same information as that prescribed by statute. Here is Wyoming’s statutory Notice of Intention to File Lien form.
Contact me for help with your Notice of Intention to File Lien.
Lien Statement
- Contractors must file their Lien Statement within hundred fifty (150) days of the earlier of
- the last day work was performed or materials furnished under contract; or
- the date of “substantial completion” of the project.
- Subcontractors and materialmen must file their Lien Statement within one hundred twenty (120) days of the earlier of
- the last day when work was performed or materials furnished under contract;
- the date of “substantial completion” of the project; or
- the last day the subcontractor performed work at the direction of the contractor or other person authorized to provide direction.
- The date of “substantial completion” is presumed to be the the date the owner records a Notice of Substantial Completion for the project.
- The Notice of Substantial Completion only applies to contractors, subcontractors, and materialmen to whom the owner sends a copy of the Notice of Substantial Completion within five (5) days of recording the same.
- If you fail to file your Lien Statement in accordance with deadlines set forth above, your Lien Statement will be invalid and unenforceable.
- Your Lien Statement (or if you’re an owner, your Notice of Substantial Completion) must be in substantially the same format and contain the same information as that prescribed by statute. Here are Wyoming’s statutory Lien Statement and Notice of Substantial Completion forms.
Contact me for help with your Lien Statement or Notice of Substantial Completion.
Notice of Filing Lien
- Within thirty (30) days after filing your Lien Statement, you must send a Notice of Filing Lien to the property owner, informing the owner of your lien.
- Failing to send a Notice of Filing Lien would not affect the validity of your lien, but you should still send one as it may be what gets you paid.
- Your Notice of Filing Lien must be in substantially the same format and contain the same information as that prescribed by statute. Here is Wyoming’s statutory Notice of Filing Lien form.
Contact me for help with your Notice of Filing Lien.
Enforcement of Lien
- A foreclosure action (a lawsuit) must be commenced within one hundred eighty (180) days after your Lien Statement was filed (i.e., recorded).
- If you fail to commence a foreclosure action in accordance with deadline set forth above, your Lien Statement will be invalid and unenforceable.
- Attorney fees are awardable to the prevailing party. You’ll want to retain an experience construction lawyer to maximize your chances for prevailing.
Contact me for help enforcing your lien rights? (I have a proven track record of success: see Representative Cases.)
Lien Waivers
- Wyoming is one of only around twelve states with a statutory lien waiver.
- With an unconditional lien wavier, make sure you have received payment before executing waiver.
- You might avoid unconditional lien waiver with language like the following (maybe on a stamp): “THIS DOCUMENT BECOMES EFFECTIVE UPON THE UNDERSIGNED’S RECEIPT OF PAYMENT.”
- With an unconditional lien wavier, make sure you have received payment before executing waiver.
- Here is Wyoming’s statutory Lien Waiver form.
Contact me for help with your Lien Waiver.
Notice of Satisfaction of Lien
- Within thirty (30) days after receiving payment, you must
- release your lien by filing a Notice of Satisfaction of Lien; and
- send a copy of the Notice of Satisfaction of Lien to the property owner.
- If you fail to file a Notice of Satisfaction as set forth above, you may be liable for actual damages, plus damages of up to $100 per day until your Notice of Satisfaction of Lien is filed.
- Your Notice of Satisfaction of Lien must be in substantially the same format and contain the same information as that prescribed by statute. Here is Wyoming’s statutory Notice of Satisfaction of Lien form.
Contact me for help with your Notice of Satisfaction of Lien.
Frequently Asked Questions (FAQ)
Mechanics’ liens are a great tools for collecting money. But they are complicated and complex. I have provided you with the basic steps necessary to preserve your lien rights so that we can use a mechanic’s lien as a tool to collect your money. But there is much more you will want to take into consideration. For example:
- What is the extent of your lien, what property does it cover?
- Your lien is limited to on acre, unless your improvements cover more than one acre in which case your lien extends to the additional property covered thereby.
- If the real property subject to your lien is located in any city, town or subdivision your lien extends to the entire lot upon which the building or improvement is located.
- Your lien is limited to on acre, unless your improvements cover more than one acre in which case your lien extends to the additional property covered thereby.
- Can you remove–i.e., repossess–your improvement from the project property?
- A court may allow you, as a lien claimant, to remove your improvement to the project property if you can establish that the project property will be in the same or similar condition as prior to the performance of your work. (You may also be entitled to reasonable costs for removing your improvement or for restoring the project property to its previous condition.)
- What does your lien attach to if the project owner is a tenant, and is it possible to get to the landlord’s interest in the project property?
- If the project owner is a tenant, your lien will be limited to the the tenant’s leasehold interest in the project property unless you can show that (1) the landlord agreed to pay the costs of the improvement; or (2) the improvements were specifically authorized by the landlord, in which case your lien would attach to landlord’s and the tenant’s interest in the project property.
- How do you extend the deadline for filing your Lien Statement?
- Any party to a contract for which a lien may be filed may agree to an extension of the time within which the lien may be filed. The time agreed upon may not exceed twice the time within which the lien would have to be filed. The agreement must be acknowledged before a notarial officer, and signed by the owner, the contractor and any other parties to the contract before it is valid. The agreement must be filed with and recorded by the county clerk. (The lien rights of persons not signing the agreement are not affected by it.)
- How do you determine the priority of your lien in relation to other liens and encumbrances?
- Mechanics’ liens are on equal footing.
- If the proceeds from a foreclosure sale are insufficient cover all the mechanics’ liens, the proceeds are prorated among the lien claimants according to the amounts of their respective claims.
- As to other liens and encumbrances, mechanics’ liens relate back to commencement of any construction work or repair of the premises or property.
- Mechanics’ liens are on equal footing.
- How do you bond off a lien?
- The owner of the property, contractor, or subcontractor deposits with the court having jurisdiction over the lien claim a corporate surety bond, letter of credit, cash or cash equivalent of established value approved by the court having jurisdiction over the lien claim in the county where the lien was filed in an amount equal to one and one-half (1 ½ ) times the amount of the lien.
- How do you pursue alternate security if the your lien is bonded off?
- How and where are documents filed and sent?
- Rather than filing a mechanic’s lien, should you be filing a lien that covers mines, quarries, oil, gas or other wells, or maybe a hybrid that covers both?
Questions?
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