It’s a disappointing fact that construction companies routinely wait too long for payment. What’s more frustrating is that all too often, problems somewhere in the payment chain can result in construction participants not getting paid what they have earned at all. Fortunately, there are tools provided through the laws of every state to help parties on construction projects get paid what they deserve.
Mechanics liens can work in many ways to get you paid, but the most important thing to remember is that they work. Mechanics liens give the property owner (and other parties up the contracting chain from the claimant) a strong incentive to pay because a mechanics lien gives a lien claimant an interest in the improved property itself. This property right promotes far payment, and empowers construction participants to go get work and not worry about eventual payment of what they have earned and deserve.
If you need to get paid for work construction work in Hawaii, filing a mechanics lien may be the way to go. This step-by-step guide (starting in the next paragraph, below) will tell you how to go about it. It can be complicated and time consuming to file a mechanics lien by yourself, and in Hawaii, a mechanics lien must be filed with the Hawaii circuit court of the circuit in which the property is located, so there can be restrictions regarding whether a claimant must hire an attorney to filed the document.
In most cases, a corporation or LLC can not represent itself in court, and would need an attorney to make filings for it. But, if you’re an individual that has decided a mechanics lien is the way to go to get paid, and want to undertake the complicated filing pro se, just follow the steps below to start the lien process.
Make Sure Your Hawaii Mechanics Lien Has the Required Information
The first crucial step in filing a valid lien (after determining that you are a party protected by Hawaii’s mechanics lien laws) is to make sure that your Hawaii mechanics lien contains all of the information required by statute. The failure to include the proper information can invalidate your lien claim.
Note that, since Hawaii mechanics liens must be filed in the circuit court of the circuit where the property is situated, it requires both an “Application for Lien” , and a “Notice of Lien” which sets “forth the alleged facts by virtue of which the person claims a lien.” However, the Application and Notice both must be filed with the court and both must be served on multiple parties.
The information required to be included on an Hawaii mechanics lien is set forth by Hawaii statute §507 – 44, as follows:
1. The amount of the claim;
2. The labor or material furnished;
3. A description of the property sufficient to identify the same;
4. Any other matter necessary to a clear understanding of the claim;
5. The name of the assignor if the claim has been assigned;
6. The names of the parties who contracted for the improvement;
7. The name of the general contractor;
8. The names of the owners of the property and any person with an interest therein;
Further, the application may (but need not) contain;
9. The names of the mortgagees or other encumbrancers of the property, if any; and
10. The name of the GC’s surety, if any
As previously stated, it is important to make sure all of the required information is contained within the application, and further, that the facts giving rise to the application are included on the notice of lien attached with the application.
How To File a Hawaii Mechanics Lien
Now that both the application and supporting notice have been drafted, it’s time to file your Hawaii mechanics lien. As noted above, Hawaii requires mechanics liens to be filed in the circuit court of the circuit in which the improved property is located. Since it is a court filing, there may be rules governing the ability of a company to file without representation by an attorney licensed to practice in Hawaii. For individuals, the process can be found below.
- Prepare both the application and supporting notice, taking care to include the necessary information as set forth above.
- Present the lien to the court for filing – this can be done by physically taking the lien to the courthouse for filing, or by sending the documents to the court by FedEx or courier.
– Make sure you have the appropriate margins on the lien document – this can change by court, so it helps to either look up recording requirements online via the court’s website, or through calling the applicable office to ask.
– Include the appropriate fees. In Hawaii, the filing fee for a mechanics lien is $345 – but it may be worth checking to make sure there are no additional fees required. Your lien can be rejected if the proper fees are not included or paid.
- Note that, since Hawaii liens are recorded in court, there may be rules of court specific to the court in which the lien is being filed (for example, a particular cover sheet may be required, there may be particular margins, etc.). It is best practice to call ahead to make sure everything is compliant rather than getting a rejection letter back with an unrecorded lien and needing to start over.
- Once the document is recorded, you should be provided a copy of the filing for your records. If a copy is not automatically provided, one can be requested from the court, usually for a small fee.
- Hawaii has strict laws regarding service – so pay attention to the next section.
Getting the lien filed in court is only the first step in the mechanics lien process in Hawaii – so read on, there is much more to come.
Serve Your Hawaii Mechanics Lien
As noted above, service of the application and notice of lien is a critical part of the Hawaii mechanics lien process. Failure to comply with the service requirements will result in the lien not attaching to the property, and the waste of you (at least) $345 filing fee. Hawaii law requires that the lien claimant serve a copy of the application for a lien and the notice of lien on:
- The owner of the property;
- Any other person with an interest in the property;
- The party who contracted for the improvements (if other than the owner or a person with an interest)
This is an essential part of a Hawaii mechanics lien, and the application and notice should be served “in the manner prescribed by law for service of summons” (personal service).
Special Note – Hearing and Court Approval Required for Lien to Attach
Even after the above steps have been taken, a Hawaii lien claimant is still not done. Between 3 and 10 days from service of the application and notice the court will hold a hearing to determine whether probable cause exists to permit the lien to attach to the property.
Any person that was required to get notice of lien will be permitted to offer testimony and documentary evidence related to whether there is probable cause for the lien to attach. This is not necessarily an “all or nothing” determination. The court is allowed to only permit the attachment of a lien in the net amount determined probable if there is a “set-off” or other dispute. If it’s impossible to hear all evidence presented during the hearing, the court can continue the hearing to another date – there is no need for the court’s determination regarding the lien’s attachment to take place on the original hiring day.
The lien shall not attach to the property until the court finds probable cause exists and so orders, and no such order shall be entered before the application and notice have been served on every required party such that they had a chance to appear at a hearing.
More Information: Hawaii Mechanics Lien and Preliminary Notice FAQs | Levelset
Whew. Congratulations! Once the court has determined that your lien can attach to the property your Hawaii mechanics is lien ready to get you paid what you’ve earned.
Finally, remember an Hawaii mechanics lien must be enforced within 3 months from the date on which it attached – NOTE that failure to meet this deadline for enforcement will result in the expiration of the lien claim.
Recording a mechanics lien can be a powerful tool in making sure you are paid what you earned. The Hawaii How-To guide above can empower you to take that step when and if it becomes necessary, and make sure you are treated fairly.