When viewed in a vacuum, it seems odd that the lien rights of subcontractors and suppliers can be negatively impacted by the actions of third parties. It is easy to think that some rule of fair play is violated when actions out of the sub’s control extinguish otherwise valid lien rights. For example, whether or not a sub is able to file a valid lien in some states is directly tied to whether or not the general contractor has kept his license current. The decision of some states to pass that burden onto subcontractors or suppliers is the result of a balancing act – the need to protect property owners is weighed against the need to protect subs and suppliers.

Are lower-tier parties on a residential construction project handcuffed by the general’s non-compliance with the Home Improvement Act? The desire of states to protect property owners is heightened when the projects in question are residential, this is why many states have enacted special rules for improvements to owner-occupied residential properties. Connecticut is such a state, and has enacted the Home Improvement Act in order to set forth certain minimum requirements on residential improvement projects, and to provide some protection to the state’s homeowners.

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Non-Compliance With the Home Improvement Act Can Invalidate Liens

The Home Improvement Act, Conn. Gen. Stat. § 20-429, sets out specific requirements related to contracts for improvements to residential property in Connecticut. Specifically, it holds that:

(a) No home improvement contract shall be valid or enforceable against an owner unless it: (1) Is in writing, (2) is signed by the owner and the contractor, (3) contains the entire agreement between the owner and the contractor, (4) contains the date of the transaction, (5) contains the name and address of the contractor and the contractor’s registration number, (6) contains a notice of the owner’s cancellation rights in accordance with the provisions of chapter 740, (7) contains a starting date and completion date, (8) is entered into by a registered salesman or registered contractor…

as well as other specific requirements. It also sets forth requirements for changes to the contract. It is well-settled that failure to comply with the requirements of the Home Improvement Act will render a general contractor’s mechanics lien invalid, to the extent that compliance with the act was required. What may not be as cut and dry, however, is whether that trickles down to negate the lien rights of subs and suppliers. Are lower-tier parties on a residential construction project handcuffed by the general’s non-compliance with the Home Improvement Act?

Should Subs and Suppliers Worry?

So, the question for subs and suppliers, then, is: Do I need to worry that the general’s contract (a contract over which I have no control) and the general’s conduct (conduct over which I have no control) could potentially invalidate my right to get paid?

Fortunately for the subs and suppliers in Connecticut, it appears that the answer is no.

A recent case, Absolute Plumbing & Heating, LLC v. Edelman, 146 Conn. App. 383 (Conn. App. Ct. 2013), made this clear. While the case had several procedural aspects not applicable to this discussion, the court was distinct in the non-application of the Home Improvement Act to subcontractor’s lien rights in two ways:

1) the act does not apply to subcontractors on it’s face: “Subcontractors do not fall within the statutory definition of home improvement contractor, and they are therefore not required to register nor are they required to enter into valid home improvement contracts.” Meadows v. Higgins, 249 Conn. 155, 166, 733 A.2d 172, 178 (1999); and

2) the act does not apply to subcontractors through the failure of the general: “Assuming without deciding that the defendant [property owner] is correct in his assertion that the [general’s] contract does not meet the requirements of [the act], we do not agree that this is a bar to the plaintiff’s right to recover against him under the mechanic’s lien statute. The defendant has provided no authority to support his proposition that when a general contractor’s lien is unenforceable for a lack of compliance with the act, the subcontractor’s lien also is unenforceable.” Absolute Plumbing & Heating, LLC v. Edelman, 146 Conn. App. 383, 394 (Conn. App. Ct. 2013)

This means that Connecticut subs and suppliers are free to file mechanics liens for their work on residential projects, even if the general would be unable to file a mechanics lien for failure to meet the requirements of the Home Improvement Act.