Courts around the country are constantly construing the mechanic or construction lien laws, making compliance with these statutes sometimes feel like a moving target. A recent case out of the Washington Court of Appeals confirms this theory, which overturned a previous decision three years after-the-fact, to completely change the way liens must be signed by corporations in Washington state.
But it isn’t just the courts that change mechanic lien laws. State legislatures are constantly proposing bills that will alter the lien statutes completely. Currently, two such bills are pending in New Jersey and Michigan.
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The Michigan Mechanic Lien Legislation
The Michigan legislation is actually getting a great deal of coverage on Twitter (yes, twitter). See twitter posts from the legislature, and a legislator, here and here. This particular bill’s summary provides that it “would amend the Construction Lien Act to repeal provisions concerning the Homeowner Construction Lien Recovery Fund (HCLRF), which is essentially insolvent, and cannot meet the demand for claims from the fund.” Read about House Bill 5830 at the Legislative Website here.
We actually wrote about the problems with the Lien Recovery Fund back in January (Michigan Lien Recovery Fund Raises White Flag).
While a good idea on paper, the Lien Recovery Fund just couldn’t make ends meet. This legislation in Michigan is almost a foregone conclusion, as the fund itself is insolvent. The bill is just formally closing the book on it.
The New Jersey Mechanic Lien Legislation
The legislation pending in New Jersey, in comparison to the Michigan legislation, may have a bit more of an effect on that state’s mechanic lien statutes if passed. The bill doesn’t aim to make substantial change to the mechanic lien requirements, but many contractors and suppliers in New Jersey may be effected by the suggested changes. Read about NJ Assembly Bill 410 at the Legislative website here.
Here is a quote of the bill’s summary:
This bill revises the “Construction Lien Law,” which was enacted in 1993, by:
(1) clarifying and adding certain defined terms, to conform to actual construction industry usage;
(2) clarifying procedures for the filing and amending of the lien claim and for the calculation, distribution and enforcement of the lien fund;
(3) providing more specific provisions for discharging a satisfied lien claim;
(4) further defining the arbitrator’s role;
(5) modifying time limits for filing and perfecting residential construction contract lien claims;
(6) specifying the application of lien claims to community association property; and
(7) addressing certain ambiguities as to mortgage priorities with respect to lien claims.
We’ll monitor these bills and keep you update.