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If we release a lien and add a new change order to the project, will we have lien rights if not paid by new deadlines?

We placed a lien on a property in Washington. After we placed the lien on the property, the customer did request additional work. We originally planned to just add the change order and have the customer pay in full. But let's say we release the lien and add the change order, which will change deadlines. Will we still have the ability to lien the project if payment is NOT made by the new deadline?

1 reply

Jul 6, 2020

Let's look at two separate issues here: (1) Will additional work move a Washington lien deadline back?; and (2) Does it make sense to release a lien when additional work will be done? As I'll explain below, releasing a mechanics lien without being paid generally isn't a great idea. But, if a claimant is dead set on taking that course, it should be possible as long as special care is taken with the language of the release.

Washington's mechanics lien deadline and change orders

Washington's mechanics lien deadline is based on the last date when labor or materials were furnished to the project. Generally, returning to the job for simple tasks like punch list work or minor repairs won't extend the time for filing a lien claim - but, additional work undertaken at the request of the owner, via change order, should push that last furnishing date back. Levelset discusses that idea in further detail here: I Returned to a Job – Does that Change the Lien Deadlines? As discussed in that article, another solution for the situation above could be to file a second mechanics lien. Generally, there's no prohibition on filing more than one lien on the same project. So, if the additional work isn't paid for, filing a second, separate lien claim might make sense. What's more, amending a Washington lien may be an option, too: Mechanics Liens: Can a Lien be Amended? Still, filing a second lien claim might be the safer move there.

Does it make sense to release a lien when more work will be done?

Performing additional work won't render a lien claim invalid, and claimants should have little problem filing a second lien on a project, if necessary. So, I'm not sure that it'd be wise to release a lien simply because additional will be performed and additional amounts will be owed. Mechanics liens are extremely powerful. So, when a lien has been secured against the project property, it's generally a bad time to release that lien unless it's been paid, unless some other payment security has been given, or unless the lien has expired. Still: As long as the terms on a mechanics lien release don't prohibit a future lien filing, it's possible to release a Washington lien, perform additional work, and file a second lien, as necessary. Levelset actually discusses a Washington case directly on that issue here: Washington Court: Contractor Can File Claim After Lien Release. As mentioned in that article, it's be crucial to get the verbiage right on the lien release. It's common for a lien release to state that the lien has been paid or satisfied, plus it's also common for them to release all future claims against the project. Instead, claimants should file a lien release that doesn't state payment has been made and doesn't state the lien is satisfied. That way, a second lien might be filed later on - if need be.

A filed mechanics lien can be leveraged into alternative payment security

Finally, keep in mind that mechanics liens are a great source of leverage. So, with a mechanics lien in hand, it may be possible to convince an owner to enter into a payment security agreement - such as one of these mechanics lien alternatives - in order to secure payment without having to worry about the lien. That can relieve the tension created by the lien filing and enforcement deadline, while also maintaining payment security.

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