Construction Lien Act Flashcards
(34 cards)
Construction Lien Act
An ACT to establish, protect, and enforce by lien the rights of persons
performing labor or providing material or equipment for the
improvement of real property; to provide for defenses to construction
liens; to provide remedies and prescribe penalties; and to repeal acts
and parts of acts
Is there a construction lien fund?
No
A Construction lien can be placed on…
residential and commercial property
Who can place liens on properties?
General Contractors, Sub-Contractors, Laborers, and Suppliers can place Liens on properties.
What must be in place for a project to be lienable?
There must be a written contract in place by a Contractor for the lienable project.
Is a contractor required to be licensed for a lien?
The Contractor must be licensed if required to be so by the state licensing laws. Some trades, Laborers & Suppliers are not required to be licensed.
What is the maximum amount a lien can be?
Liens cannot exceed the allowed contract dollar amount or limitations.
State approved lien documents that must be used during the lien process:
i. Notice of Commencement
ii. Notice of furnishing
iii. Proof of notice of furnishing
iv. Sworn statement
v. Waivers
vi. Claim of lien
vii. Proof of service for claim of lien
viii. Discharge of claim of lien
Notice of Commencement must be supplied when?
Supplied by owner, General Contractor, Sub-Contractor, or Supplier within 10 days of being asked for a copy by anyone entitled to a copy.
What must be attached to notice of commencement?
A blank notice of furnishing must be attached to the notice of commencement.
What format must notice of commencement follow?
c. Must follow printed format as shown in the construction lien act.
What does notice of commencement indicate?
A. Indicates legal property description.
B. Indicates owners name & address.
C. Indicates General Contractors name & address.
Notice of Furnishing:
Provides proof that a Contractor, Sub-Contractor, Laborer or Supplier has provided labor and or materials to a project.
What does Notice of Furnishing indicate?
A. Indicates owners name and information.
B. Indicates General Contractors name and information
C. Indicates the name and information of the Contractor, Laborer or Supplier who has provided labor and or materials for a project.
D. Indicates what was provided for the project
What does a Notice of Furnishing provide?
Provides the project site legal description
When must Notice of Furnishing be submitted?
A. Contractors and Suppliers summit form within 20 days of
providing goods and services.
B. Laborers summit form within 30 days after wages are due.
Proof of Service of Notice of Furnishing:
Indicates a notarized form that verifies that a notice of furnishing was mailed or hand delivered to the responsible party.
What does proof of Service of Furnishing help?
to establish lien rights
What must a copy of Proof of Service of Notice of Furnishing be attached to?
A copy must be attached to a claim of lien
Sworn Statement:
An official notarized list of individuals who have provided labor and or materials to a project who are owed money.
When shall Sworn Statement be provided and to whom?
A copy must be given to a party who has a right to a copy within 10 days of request.
Usually provided with a payment request
False statements on Sworn Statement:
False statements are subject to fines & penalties including imprisonment.
What does a waiver do?
Becomes a receipt for payment in reference to labor and or materials
Types of waiver:
A. Full unconditional waiver: indicates full payment received and there is no claim of lien.
B. Full conditional waiver: indicates that as soon as full payment or some condition is met, there will be no claim of lien.
C. Partial unconditional waiver: indicates a receipt for partial payment of a stated contract in which the work is on-going.
