As a supplier to a sub-sub contractor in Alabama do I have lien rights?

2 weeks ago

Supplier has not been paid.

Chief Legal Officer Levelset

This is a very interesting question. In Alabama suppliers to suppliers are not granted lien rights, but the question requires a bit more inquiry when the contracting party is a sub-sub.

Alabama Code § 35-11-210 states that: “[ev]ery mechanic, person, firm, or corporation who shall . . . furnish any material . . . for any building or improvement on land, or for repairing, altering, or beautifying the same, under or by virtue of any contract with the owner or proprietor thereof, or his or her agent, architect, trustee, contractor, or subcontractor . . .” is entitled to mechanics lien protection. [emphasis added]. Generally when “subcontractor” his used in statutory language, it doesn’t specifically apply to first-tier subs but to all parties that are not “general” or “direct” contractors. It appears that this is may also be the rule in Alabama.

While not part of the mechanics lien portion of the code, Alabama Code § 34-8-1 in the “Business and Professions” section of the law, defines contractors and subcontractors for the purposes of that particular chapter as: “one who constructs, superintends, or engages [construction work] under contract to general contractor as defined in subsection (a) or another subcontractor.” While the mechanics lien law is not part of that chapter, a strong analogy can be made that the definition of a subcontractor would apply in both cases. A previous version of the law did not include the “or another subcontractor” language, so it was a conscious legislative choice to add sub-subs to the list of sub contractors at least in some respects.

Additionally, recorders rarely act as gatekeepers to determine the validity of mechanics liens for recording purposes. While there could potentially be some legal arguments made with respect to the ultimate validity of a mechanics lien, it is unlike that those legal arguments would prevent a lien from being filed, and potentially prompting payment to be made.

Finally, material suppliers in Alabama are limited to an “unpaid balance” lien unless s/he provided a Notice to Owner prior to furnishing materials to the project.

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