BILL REQ. #: Z-0310.2
_____________________________________________
SENATE BILL 5504
_____________________________________________| State of Washington | 58th Legislature | 2003 Regular Session |
By Senators Fraser, Prentice, Winsley, Franklin, Keiser, Deccio, Horn and Kohl-Welles; by request of Department of Labor & IndustriesRead first time 01/28/2003. Referred to Committee on Commerce & Trade.
AN ACT Relating to limiting lien authority against a residential
homeowner; and amending RCW 60.04.031.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 60.04.031 and 1992 c 126 s 2 are each amended to read
as follows:
(1) Except as otherwise provided in this section, every person
furnishing professional services, materials, or equipment for the
improvement of real property shall give the owner or reputed owner
notice in writing of the right to claim a lien. If the prime
contractor is in compliance with the requirements of RCW 19.27.095,
60.04.230, and 60.04.261, this notice shall also be given to the prime
contractor as described in this subsection unless the potential lien
claimant has contracted directly with the prime contractor. The notice
may be given at any time but only protects the right to claim a lien
for professional services, materials, or equipment supplied after the
date which is sixty days before:
(a) Mailing the notice by certified or registered mail to the owner
or reputed owner; or
(b) Delivering or serving the notice personally upon the owner or
reputed owner and obtaining evidence of delivery in the form of a
receipt or other ((acknowledgement)) acknowledgment signed by the owner
or reputed owner or an affidavit of service.
In the case of new construction, repair, alteration, or remodel of
a single-family residence or appurtenant garage for a residential
homeowner, the notice of a right to claim a lien may be given at any
time but only protects the right to claim a lien for professional
services, materials, or equipment supplied after ((a date which is ten
days before)) the notice is given as described in this subsection.
(2) Notices of a right to claim a lien shall not be required of:
(a) Persons who contract directly with the owner or the owner's
common law agent;
(b) Laborers whose claim of lien is based solely on performing
labor; or
(c) Subcontractors who contract for the improvement of real
property directly with the prime contractor, except as provided in
subsection (3)(b) of this section.
(3)(a) Persons who furnish professional services, materials, or
equipment in connection with the new construction, repair, alteration,
or remodel of ((an existing owner-occupied)) a single-family residence
or appurtenant garage for a residential homeowner:
(((a))) (i) Who contract directly with the ((owner-occupier or
their)) owner or the owner's common law agent shall not be required to
send a written notice of the right to claim a lien and shall have a
lien for the full amount due under their contract, as provided in RCW
60.04.021; or
(((b))) (ii) Who do not contract directly with the ((owner-occupier
or their)) owner or the owner's common law agent shall give notice of
the right to claim a lien to the ((owner-occupier)) owner. Liens of
persons furnishing professional services, materials, or equipment who
do not contract directly with the ((owner-occupier or their)) owner or
the owner's common law agent may only be satisfied from actual amounts
designated in the contract for the professional services, materials, or
equipment supplied upon which the lien claim is based and not yet paid
to the prime contractor by the owner at the time the notice described
in this section is received, regardless of whether amounts not yet paid
to the prime contractor are due. For lien claims under this subsection
based on new construction, repair, alteration, or remodel of a single-family residence or appurtenant garage for a residential homeowner,
recovery is limited to the lesser of the full amount of the claim or
ten percent of the actual amounts designated in the construction
contract for the professional services, materials, or equipment
supplied.
((For the purposes of this subsection)) (b) The definitions in this
subsection apply throughout (a)(ii) of this subsection unless the
context clearly requires otherwise.
(i) "Received" means actual receipt of notice by personal service,
or registered or certified mail, or three days after mailing by
registered or certified mail, excluding Saturdays, Sundays, or legal
holidays.
(ii) "Professional services, materials, or equipment supplied" do
not include any professional services, materials, or equipment supplied
by a subcontractor performing the new construction, repair, alteration,
or remodel of a single-family residence or appurtenant garage for a
residential homeowner.
(4) The notice of right to claim a lien described in subsection (1)
of this section, shall include but not be limited to the following
information and shall substantially be in the following form, using
lower-case and upper-case ten-point type where appropriate.
NOTICE TO OWNER
IMPORTANT: READ BOTH SIDES OF THIS NOTICE CAREFULLY.
PROTECT YOURSELF FROM PAYING TWICE
Re: (description of property: Street address or general location.)
From: . . . . . . . . . . . .
AT THE REQUEST OF: (Name of person ordering the professional
services, materials, or equipment)
THIS IS NOT A LIEN--THIS NOTICE IS MEANT TO PROVIDE YOU WITH
INFORMATION NECESSARY TO PROPERLY MANAGE YOUR CONSTRUCTION PROJECT:
This notice is sent to you to tell you who is providing professional
services, materials, or equipment for the improvement of your property
and to advise you of the rights of these persons and your
responsibilities. Also take note that laborers on your project may
claim a lien without sending you a notice.
OWNER/OCCUPIER OF EXISTING RESIDENTIAL PROPERTY AND/OR NEW RESIDENTIAL PROPERTY
Under Washington law, those who furnish labor, professional services,
materials, or equipment for the repair, remodel, or alteration of your
owner-occupied principal residence and who are not paid, have a right
to enforce their claim for payment against your property. This claim
is known as a construction lien.
The law limits the amount that a lien claimant can claim against your
property. If the improvement to your property is the new construction,
repair, alteration, or remodel of a single-family residence or
appurtenant garage for a residential homeowner, a lien may be claimed
for all professional services, materials, or equipment furnished after
the date this notice was given to you or mailed to you. Claims may
only be made against that portion of the contract price you have not
yet paid to your prime contractor as of the time this notice was given
to you or three days after this notice was mailed to you. Review the
back of this notice for more information and ways to avoid lien claims.
COMMERCIAL ((AND/OR NEW RESIDENTIAL)) PROPERTY
We have or will be providing professional services, materials, or
equipment for the improvement of your commercial ((or new residential))
project. In the event you or your contractor fail to pay us, we may
file a lien against your property. A lien may be claimed for all
professional services, materials, or equipment furnished after a date
that is sixty days before this notice was given to you or mailed to
you((, unless the improvement to your property is the construction of
a new single-family residence, then ten days before this notice was
given to you or mailed to you)).
Sender: . . . . . . . . . . . .
Address: . . . . . . . . . . . .
Telephone: . . . . . . . . . . . .
Brief description of professional services, materials, or equipment
provided or to be provided: . . . . . . . . . . . .
IMPORTANT INFORMATION ON REVERSE SIDE
IMPORTANT INFORMATION FOR YOUR PROTECTION
This notice is sent to inform you that we have or will provide
professional services, materials, or equipment for the improvement of
your property. We expect to be paid by the person who ordered our
services, but if we are not paid, we have the right to enforce our
claim by filing a construction lien against your property.
LEARN more about the lien laws and the meaning of this notice by
discussing them with your contractor, suppliers, Department of Labor
and Industries, the firm sending you this notice, your lender, or your
attorney.
COMMON METHODS TO AVOID CONSTRUCTION LIENS: There are several methods
available to protect your property from construction liens. The
following are two of the more commonly used methods.
DUAL PAYCHECKS (Joint Checks): When paying your contractor for
services or materials, you may make checks payable jointly to
the contractor and the firms furnishing you this notice.
LIEN RELEASES: You may require your contractor to provide lien
releases signed by all the suppliers and subcontractors from
whom you have received this notice. If they cannot obtain lien
releases because you have not paid them, you may use the dual
payee check method to protect yourself.
YOU SHOULD TAKE APPROPRIATE STEPS TO PROTECT YOUR PROPERTY FROM LIENS.
YOUR PRIME CONTRACTOR AND YOUR CONSTRUCTION LENDER ARE REQUIRED BY LAW
TO GIVE YOU WRITTEN INFORMATION ABOUT LIEN CLAIMS. IF YOU HAVE NOT
RECEIVED IT, ASK THEM FOR IT.
* * * * * * * * * * * * *
(5) Every potential lien claimant providing professional services
where no improvement as defined in RCW 60.04.011(5) (a) or (b) has been
commenced, and the professional services provided are not visible from
an inspection of the real property may record in the real property
records of the county where the property is located a notice which
shall contain the professional service provider's name, address,
telephone number, legal description of the property, the owner or
reputed owner's name, and the general nature of the professional
services provided. If such notice is not recorded, the lien claimed
shall be subordinate to the interest of any subsequent mortgagee and
invalid as to the interest of any subsequent purchaser if the mortgagee
or purchaser acts in good faith and for a valuable consideration
acquires an interest in the property prior to the commencement of an
improvement as defined in RCW 60.04.011(5) (a) or (b) without notice of
the professional services being provided. The notice described in this
subsection shall be substantially in the following form:
NOTICE OF FURNISHING PROFESSIONAL SERVICES
That on the (day) day of (month and year) , (name of
provider) began providing professional services upon or for the
improvement of real property legally described as follows:
[Legal Description is mandatory]
The general nature of the professional services provided is . . . . . . . . . . . . . . . . . . . . . . . .
The owner or reputed owner of the real property is . . . . . . . . . . . .
. . . . . . . . . . . .
(6) A lien authorized by this chapter shall not be enforced unless
the lien claimant has complied with the applicable provisions of this
section.
(7) The definitions in this subsection apply throughout this
section unless the context clearly requires otherwise.
(a) "Commercial property" includes residential property that is not
owned by a residential homeowner.
(b) "Residential homeowner" means the owner or potential owner that
occupies or will occupy a single-family residence at the completion of
the new construction, repair, alteration, or remodel of the single-family residence or appurtenant garage as his or her residence.
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