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What is the Code provision that states equipment supply co's only have lien rights if in direct contact with the owner?

North DakotaMechanics LienRight to Lien

I see in your online material that you have indicated that Equipment Supply co's only have mechanics lien rights if in direct contact with the property owner. Which section of the North Dakota Code is this for reference? Also, does this same principle apply in the case of an oil and gas lien? If so, is there a different Code provision for that? Thanks.

1 reply

Oct 14, 2019
§ 35-27-06 of North Dakota's mechanics lien statute creates limitations on what amounts can be liened. This section limits the extent of a mechanics lien for those hired by someone other than the owner to "the reasonable value of the work done and of the skill and material furnished." However, note that § 35-27-01(4) of the state's lien statute limits what falls under the definition of "material". That definition seems to include rental equipment, but it puts limitations on what amounts can be claimed by those renting it. The section reads, in relevant part: "The rental value shall not be determinable by the contract for rental unless the owner is a party thereto." So, in a situation where material or equipment is rented by someone other than the owner of the project property, that rental might not be considered "material" for the strict purposes of the North Dakota mechanics lien statute - and thus, a mechanics lien may not be available since the amount of the purported lien would be undeterminable. Note, though, that I'm not aware that this issue has been brought up in a North Dakota court. So, it's possible that courts would have a different interpretation of those provisions. For the most clarity, it might be helpful to consult with a local construction attorney. Oil and gas liens Unfortunately, I'm not very familiar with the topic of oil and gas liens. However, it seems like there are some good resources on that front online. I've linked a few promising resources below: (1) Protections for Oil and Gas Operators and Working Interest Owners in a Bust Cycle (2) North Dakota Oil and Gas Well or Pipeline Construction Lien Law Summary
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