Construction managers used to be rare finds on construction projects. In today’s market, however, construction managers are commonplace. Construction management degrees are popular in colleges and technical colleges, and more state legislatures are passing legislation paving the way to construction manager-managed state construction projects. But, do construction managers have mechanics lien rights?
Why Construction Managers May Not Have Lien Rights
I’ve consulted with a bunch of construction managers in the past, and they are always perplexed as to why this is even a question. Of course they have mechanic’s lien rights, they think. Just because you’re involved with a construction project doesn’t mean you have the right to file a mechanic’s lien. To the contrary, only those parties who are specifically given a mechanics lien right can file a lien. A party must look at their role in the project, look at the work they furnished, and inquire: does this fit into the state’s mechanics lien framework?
A common example of someone involved with a construction project who does not have lien rights are the material suppliers to other material suppliers. Suppliers to suppliers very, very rarely have any mechanics lien or bond claim rights.
But why not construction managers?
Construction managers frequently run into problems with mechanics lien laws for two primary reasons:
- They are not specifically named in the statutes, largely because the statutes were written before the profession got popular; and
- They do not actually furnish labor or materials to the job site.
Why Construction Managers May Have Lien Rights
The above section dealt with some of the reasons why construction managers may not have a right to file a mechanics lien. While these challenges do exist and may prohibit the construction manager from filing a mechanics lien in some states, there are a lot of reasons why construction managers may actually have mechanics lien rights.
First, there are a lot of mechanics lien statutes drafted to broadly allow lien rights to almost anyone connected to a construction project. Some states are strict and specifically list who can file a lien. Other states, however, just say something along the lines of “anyone who furnishes materials, labor, equipment, or services to a real property improvement.” Whenever vague terms like this are used, construction managers are in good shape.
Second, construction managers are actually furnishing services to a construction project, and for this reason, many states actually list them as the types of parties who do have the right to file a lien.
So…Should Construction Managers File a Mechanics Lien?
Oh, if it were only that easy. A few years ago, I actually was representing a construction management company as an attorney in a case in Washington state. I argued that construction managers could file a mechanics lien in the state, and the appeals court didn’t agree with me. In Washington, therefore, the law currently stands that construction managers cannot file mechanic liens, although last year I think the law was pretty ambiguous and the argument was worth a run.
The outcome would likely be very different in California, and in a number of other states. Unfortunately, since the case law on this question isn’t fully developed, it leaves construction managers in a legal gray area. If the law doesn’t clearly spell out their mechanics lien rights, they have to make a decision whether they want to push the issue.
Levelset files mechanics lien claims all across the nation, and we’ve filed mechanics lien claims for construction managers and construction management companies. If you are a construction manager and think you have the right to file a mechanics lien, you can file a mechanics lien with Levelset .