Lien rights if a property is sold

2 weeks ago

We are an aggregate and ready mix supplier in Washington state. If we deliver material to a property and the property is sold within our 90 day lien window, do we still retain lien rights to the property?

Senior Legal Associate Levelset

Generally, a claimant will still be entitled to file their mechanics lien claim, even when the property is sold prior to the filing of their lien claim. This is because mechanics lien rights arise against the property where work is performed, not against any particular individual or business. More on that here: What Happens If I Filed My Mechanics Lien After the Property Was Sold?

This seems to be reinforced by the fact that certain Washington mechanics lien claimants – namely, those who provide professional services – are required to file certain notice, under RCW § 60.04.031(5), in order to preserve their right to lien against a purchaser. And, because there’s no discussion of how other mechanics lien claimants can preserve their right to lien against purchasers, it seems natural that their right to lien would carry over without needing to take any additional steps.

Taking additional steps before pursuing a mechanics lien filing

Note that there are other tools available that can help recover payment without having to ultimately file a lien claim. So, if there’s time before the lien deadline, it might be helpful to attempt recovery without actually pursuing a lien claim.

For one, sending a customer a simple, friendly invoice reminder is often enough to do the trick. Often, a little nudge is enough to move things in the right direction.

Taking things a step further, payment demand letters can show a customer that the issue of nonpayment is being taken seriously, and that formal recovery options will be  explored if payment isn’t made. More on that here: Demand Letters for Contractors – How To Write One That Gets You Paid.

Finally, escalating matters with the threat of a lien claim – like a Notice of Intent to Lien – can show the customer and the property owner (the notice is typically sent to both) that the payment dispute will result in a mechanics lien if payment isn’t made soon. It acts as a final warning shot. And, in a situation where a prior owner contracted for work but didn’t pay for it, sending a Notice of Intent to Lien to both the seller and the purchaser can be particularly effective if the buyer is unaware of the debt. Typically, that buyer will put pressure on their seller to resolve the issue. More on Notices of Intent to Lien here: What Is a Notice of Intent to Lien and Should You Send One?

Bottom line

Generally, lien rights should be available – even when the project property is sold before the lien is actually filed. And, it seems that Washington follows this general rule. However, other options can be helpful to recover payment, too – and if there’s time, it makes sense for a claimant to try and resolve the issue without having to pursue a lien claim. And, when there’s a buyer-seller relationship, it’s often possible to put presser on the seller to pay their debts so that they won’t affect the buyer (and there could even be legal liability for the seller if the buyer’s title is put in jeopardy).

For more background on Washington mechanics liens: Washington Mechanics Lien Guide and FAQs.

 

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