For this week’s Guest Post Friday here at Construction Law Musings, we welcome Kavita Knowles. Kavita is a named partner in the firm Fullerton & Knowles. Her firm is well known in the Virginia area for its Construction Law Survival Manual and, like me, performs work for construction professionals.
The District of Columbia will generally come in line with its neighboring states with a new mechanic’s lien statute signed on March 27, 2012 and which became effective on June 4, 2012. The three main changes are as follows:
It allows a contractor to file a lien during construction but no later than within 90 days of completion or termination of the project. D.C. Code §40-301.02(a)(1). Prior to this change, a contractor could only file a lien within 90 days after a project was completed or terminated but not while a project was ongoing. D.C. Code §40-301.02(a)(1).- It reduces the number of sureties from two to one for an owner to bond off a lien. D.C. Code §40-303.16. Before this change, an owner was required to provide 2 or more sureties and for this reason, owners tended to avoid the use of the court procedure for judicial bonds and used a private bond to bond off a lien.
- It increases the number of days from two to five for notice to a lienclaimant of the owner’s intent to bond off the lien, so that the claimant can object or comment. D.C. Code §40-303.16. Before this amendment, the contractor did not have a real opportunity to object. Now the contractor has some time to consider the options and decide on a course of action.
The Recorder of Deeds also has a new form on its website. The name has been changed from Notice of Intent to Notice of Mechanic’s Lien. Generally it requires the same information as before but has added a few new items:
- Date of Notice
- The name and address of the contractor or the contractor’s registered agent
- The name and address of the owner or the owner’s registered agent
- Property description and address
- Lien Claim Amount, with a credit for payments received
- Whether Claimant’s contract was with the Owner or with a General Contractor.
- Description of work performed, including first and last dates of work supplied
- Certification of whether contractor is individual or entity organized under District of Columbia or another state; Certification that Notice will be served on the Owner or the Owner’s Agent by certified mail return receipt requested within 5 days of filing of the Notice, or will be posted on the property, if unable to serve; Certification that Notice is being filed within 90 days of last work and that suit will be filed within 180 days from recordation of the Notice, and Notice of Lis Pendens will be recorded.
- Verification or an Affidavit by Contractor, Contractor’s Authorized Representative or Counsel that the contents of the Notice are based on personal knowledge, are true and correct to the Contractor’s belief that Contractor has the right to recover the Notice Amount and that the Claimant is the Contractor. If the Notice is being filed by Contractor’s Authorized Representative or Counsel, a Letter of Authorization from the Contractor is also required.
In addition at the time of recording the claimant has to provide certain documents to the Recorder of Deeds along with the Notice. These documents are not actually recorded with the Notice but must be presented to the Recorder of Deeds in order to record the Notice of Lien.
For an individual or entity organized under the laws of the District of Columbia or is doing business in the District:
(a) A copy of the contractor’s current license to do business in the District issued by the Department of Consumer and Regulatory Affairs; and
(b) A certificate of good standing from the Department of Consumer and Regulatory Affairs issued within 180 days prior to the date of the filing of the Notice; or
(c) If the project is provided under a home improvement contract, a copy of the home improvement contract.
For an individual or entity organized under laws OTHER than the District of Columbia and is not doing business in the District:
(a) A copy of the contractor’s current license to do business issued by the government of the other jurisdiction; and
(b) A certificate evidencing the contractor’s good standing in its place of business or state of incorporation issued by the other jurisdiction; or
(c) If the project is provided under a home improvement contract, a copy of the home improvement contract.
As stated above, a Letter of Authorization from the Contractor will be required if the Contractor’s Representative or Counsel will be filing the Notice. The New Notice of Mechanic’s Lien form and Sample Letter and a number of other helpful forms can be found on our website in the Appendices at www.fullertonlaw.com. They can also be found at the Forms Center at the office of the Recorder of Deeds at http://otr.cfo.dc.gov/otr/frames.asp?doc=/otr/lib/otr/january_2012/2011_notice_of_mechanics_lien_form.pdf
As always Kavita and I welcome your comments below. Please subscribe to keep up with this and other Guest Post Fridays at Construction Law Musings.
