We provide heavy equipment rentals to other industries outside of just construction. Could you expand on whether or not mechanic's liens would be applicable in Ag, Mining, or Logging industries? Are they also state specific?
1 reply
Apr 15, 2020
When you provide equipment rental to improve real property (i.e. real estate), then you will very often be qualified to file a mechanics lien to get paid. Therefore, it is not important as to whether the equipment was provided to the "construction industry" or any other industry. The more important factor is whether the equipment was provided to "improve property." This can be tricky to answer...and yes, unfortunately, it does depend state-by-state. Let me walk you through a few issues you'll want to keep in mind.
Equipment Rental Lien Rights In General
In general...it is very clear in every state that you can file a mechanics lien for supplying materials that are incorporated into the property (i.e. wood becomes part of a building). And for labor put into the property. The question of whether rented equipment qualifies for lien protection at all is more interesting and varies a bit more -- although, overwhelmingly, most states allow equipment rental companies to file liens. This question is explored in this article, "Can Equipment Rental Companies File Mechanics Liens?"
Liens in Ag, Mining, Logging, Etc.
Now we're getting into some nitty-gritty details of what is "lienable" and what is not. This is a state-by-state and situation-by-situation matter. I will try to teach you how to think about it, and then show you where you can find more resources. And, if you have a specific situation, you can reply in thread here, and/or post a new question. Please make sure you indicate the STATE and give some understanding about the nature of the project.
Part 1: How to Think About It -- Is The Property Being Improved?
Almost every state's law has some version of this. The lien law across the country provides, (1) a list of people who qualify, such as "laborers, contractors, suppliers, equipment providers;" and (2) when they do certain work, such as "provides any labor or material to improve real property." Sometimes the word "improve" is defined. Sometimes it is not....
This is explored in more detail here: Does my work qualify for a mechanics lien?
Although this is not true everywhere, this post does have a good "popular" way to think about it:
A popular way to judge whether the property has been improved is to look at the permanence of the work performed. This is not to say that every lien claimant must have their thumbprint on the project – a lot of work that goes into a job goes unseen. However, if work cannot be tied to a lasting improvement on the property, it becomes less clear whether or not lien rights will be available.
The term "Improvement" can be tricky, of course. In California, the Lien Law defines a "Work of Improvement" like this:
§ 8050. (a) “Work of improvement” includes, but is not limited to: (1) Construction, alteration, repair, demolition, or removal, in whole or in part, of, or addition to, a building, wharf, bridge, ditch, flume, aqueduct, well, tunnel, fence, machinery, railroad, or road. (2) Seeding, sodding, or planting of real property for landscaping purposes. (3) Filling, leveling, or grading of real property. (b) Except as otherwise provided in this part, “work of improvement” means the entire structure or scheme of improvement as a whole, and includes site improvement.
As you can see, pretty broad.
This creates all sorts of interesting questions, like:
Part 2: Where to look to figure it out for your state
Levelset has state-by-state resources that give the 411 on mechanics lien laws for each state. Go to this page. Select your state, and scroll down to the FAQs.
The first FAQ on each page is "Who can file a mechanics lien?" This is where you'll want to start to figure out if these types of liens are available in your state.
You selected Idaho for this question. Here is the FAQ for Idaho -- that is, "Who can file a mechanics lien in Idaho?"
In that answer you'll find this:
According to Idaho statute, “every person performing labor upon, or furnishing materials to be used in the construction, alteration or repair” of virtually any kind of real property or improvement is granted mechanics lien rights. Materials or equipment lessors are also explicitly allowed to file a lien.
So, logging, mineral work, ag work...it may all qualify based on such a broad rule that allows liens for any "construction, alteration or repair!"
Good luck!