Contractors & suppliers have strong lien rights in Hawaii. If a contractor or supplier isn’t paid on an Hawaii job, they can turn to filing a lien to speed up payment and protect themselves. However, there are specific requirements and rules that must be followed. Here are 5 essential things you need to know about Hawaii’s mechanics lien law.
1) A Project Participant Must be Licensed In Order to have Hawaii Mechanics Lien Rights
Most project participants are entitled to file a Hawaii mechanics lien. General contractors, subcontractors, sub-subcontractors, suppliers, and laborers all have mechanics lien rights. Architects, design professionals, and engineers also have lien rights if their work was incorporated into the project. It is important to remember that in Hawaii, an unlicensed party does not have mechanics lien rights if state law requires that party to be licensed. Further, even if a subcontractor or supplier would otherwise have mechanics lien rights, they will lose those rights if the general contractor on the project is not licensed.
2) The Deadline to File a Hawaii Mechanics Lien is a Fixed 45 Days for All Parties
The deadline to file a mechanics lien in Hawaii is 45 days from the last date labor or materials were furnished to the project. Once the lien is filed, the project participant must serve a copy of the Application for a Lien and the Notice of Lien on the owner of the property or any other persons with interest in the property. The general practice in Hawaii is to combine all necessary components of the lien into one court filing, filed by the claimant’s attorney in the proper Hawaii circuit court.
3) There Is No Preliminary Notice Requirement in Hawaii
Unlike most states, there are no preliminary notice requirements in Hawaii. However, project participants can still file an Intent to Lien in order to initiate the process of getting paid.
4) Filing a Mechanics Lien in Hawaii Requires Legal Action
An interesting fact about Hawaii is that filing a mechanics lien entails initiating a legal proceeding. This means that the process is a little bit more involved then what is typical. The mechanics lien requires a court hearing (within 3-10 days) with a judge to determine if there is probable cause for the lien claim. Failure to adhere to this deadline will result in the forfeit of lien rights.
5) Hawaii Mechanics Liens Do Not Take Priority Over Pre-existing Encumbrances
Mechanics liens in Hawaii do not take priority over pre-existing construction loans and mortgages. Generally, all mechanics liens in Hawaii are equal in priority and only have priority over other liens or encumbrances arising after the visible commencement of the improvement. Liens in favor of the government, mortgages, and liens previously recorded all have priority over Hawaii mechanics liens.