December 2017 will be remembered as one of the snowiest months ever in the United States. It wasn’t just because of the staggering amounts of snow that fell, but because the snowfall blanketed parts of the country (from Texas through the Deep South states and all the way up the Eastern Seaboard) that weren’t used to seeing it. And the snow wasn’t just a one-time event — because the month was so cold, the snow that fell did not melt away, but stayed around for weeks on end.
That got us to thinking: what happens if a person or company that performs snow removal work has trouble getting paid? Does snow removal work qualify for lien rights or bond claim protection?
Issue #1: Private vs. Public Property
The first question that must be answered is whether the snow removal took place on private property (like a residential driveway, an office complex, or even the grounds of a school) or on public property (such as a city street, road, or for government-owned building or land). Generally speaking, a mechanics lien is the remedy for non-payment that occurs on a private project (meaning, a project taking place on private land), while a bond claim is the remedy for a public project. But that part of the equation is not the deciding factor, however.
Issue #2: Incorporation
Even though the work of removing snow requires the use of specialized equipment and lots of labor, it’s actually not very similar to traditional construction work where immovable structures are built on a piece of real property.
And this gets to the heart of what incorporation means — generally speaking, work or materials only qualify for lien rights if they are incorporated into the property itself. The labor used to build a building is incorporated into that building, just like the concrete, steel, and other materials are also incorporated into the building.
However, snow removal more closely resembles maintenance work, or maybe even an activity like mowing the lawn. The lawn clippings aren’t incorporated into the property. They’re actually refuse that typically gets thrown away. For most states, the same thing is probably true for snow removal — that is, it probably would not qualify for lien rights protection.
Issue #3: Does Snow Removal Work Qualify for Protection in General?
The main reason why this question is do difficult to answer is because every state’s mechanics lien and bond claim laws are different. That means that the rules and regulations that govern how mechanics liens work in, say, Texas, are going to be completely different than how they work in Georgia for example. (Worth noting that Texas and Georgia were both hit hard by the December 2017 snowstorm.)
What this means is that, even though we made a strong case why snow removal may not qualify for lien rights protection in #2 above, there may be some states where snow removal does qualify. The only way to know that is to check the lien law and other requirements for the state where the snow removal took place.
Bond Claims Are Available, If There Is a Bond
Things are a bit clearer for those furnishing snow removal services under a state contract. When dealing with work for a state, county or municipality, bond claim protection may be available when and if there is a bond issued for the work. In other words, you can’t file a bond claim if there is no bond present to file a claim against.
And so, how often do the cities and states that typically get a lot of snow fall require a bond to be in place? The answer is probably not that often.
Snow removal is kind of like street sweeping or picking up the trash — while there is no rule that will hold true in every case and for every state, in most states, a bond is probably not going to be required for that type of work. What’s more, on public projects, bonds don’t just “appear” out of thin air. No, they’re posted by the prime contractor for the benefit of subcontractors, material suppliers, and the other companies that work on a typical construction project. For a snow clearing project, such a payment chain is very unlikely to exist.
Even though the deck is probably stacked against the possibility of snow removal qualifying for lien rights protection in most states, that doesn’t mean it doesn’t exist. Also, snow removal is kind of similar to a job that usually does qualify for lien rights protection — the work of removing trash and debris from a construction project. You can find out much more about lien rights, bond claims, notices, and other important topics around construction payment by visiting the Levelset’s collection of free resources.