A recent visitor to Levelset posed an interesting question: What rights does a party have after performing work on (or furnishing materials to) a project on an embassy?
This got me thinking – do special rules govern projects of this type, or do they just fit in to the existing structure already set out? And, do the rules change related to where the embassy is located, or which country’s embassy it is? At first glance it appears that this situation might be pretty tricky – after all, if we’re talking about an American embassy the property would be located in a foreign country, and if we’re talking about a foreign embassy in the U.S., the foreign county’s rules apply – as if it was located in a foreign country, as well. Since foreign countries have different lien and notice requirements, if mechanic’s liens are even an available remedy, what is an unpaid party to do?
The first situation we will look at is unpaid work on an American embassy located in a foreign country. Despite the apparent complexity of the situation, this is a fairly straightforward case. U.S. embassies are (U.S.) federal government property – whether they are are located in Azerbaijan or Zimbabwe. Because of this, any right to recover for unpaid construction work would be governed by the Miller Act – just as it would be for federal property located in the U.S. proper. This means that the unpaid party’s claim would be against the required bond – it’s not a mechanic’s lien against the property itself. So, it appears that there is protection for furnishers or labor/material on an American embassy located in a foreign country through making a Miller Act claim on the required payment bond.
Now, let’s look at the flip-side. What happens if the work is performed on, or materials supplied to, a construction project on a foreign embassy located in the U.S.? This situation may not provide as neat an outcome as the situation examined briefly, above. Just as an American embassy in a foreign country is owned by the U.S. government, the embassies of foreign countries in the U.S. are the property of the foreign country they represent. This, unfortunately, means that U.S. mechanics lien laws, or bonding requirements, do not apply. So, is there any recourse for an unpaid party on this type of project?
It depends. It doesn’t look good, unfortunately. The easiest, and most straightforward path to recovery in this situation is if the general contractor secured a payment bond for the project. In that case, the unpaid party can make a claim on the bond as they would in any other situation. However, if there is no bond on the project, the claimant may be out of luck. The application of mechanics lien rights would be problematic for the same reason it is problematic for projects on Native American land. Foreign governments have sovereign immunity, and unless they waive that protection, are not subject to state mechanics lien laws. In the case where there is no bond, the country on whose embassy the work was performed does not provide for mechanics lien protection, and has not waived sovereign immunity, the claimant may be entirely without remedy (other than a suit against the general contractor).