Oklahoma Registry Pre-Lien Statute

April 10, 2014

A state bill is expected to drop in Oklahoma this month that could set up a registration system for contractors and suppliers and call for drastic changes to the pre-lien notice statutes in the state, according to Paula Black, credit manager with Dolese Brothers Co., and James Vogt, Esq., managing partner at Reynolds, Ridings, Vogt & McCart PLLC.

Black, a member of NACM MidAmerica, said the coming proposal in its earliest form was an attempt to change lien laws to be more favorable to general contractors (GCs). At present, suppliers have 75 days from last delivery to file a lien, which GCs believe is a long time for them to be exposed. GCs also oppose Oklahoma's rare "double jeopardy" status, where subcontractors or suppliers can put a lien on the owner or the GC if money paid to either doesn't make it downstream, said Black.

Now, a task force consisting mostly of GCs that consulted with Dolese Brothers about wording is releasing a legislative proposal that would create a registration system for all GCs, subcontractors and suppliers. It would be similar to an existing system in Utah. Black called the first version cumbersome and difficult for subcontractors and suppliers and said she hopes the proposed changes will make it into the version presented to the Oklahoma legislature. "It's somewhere we've never gone before," she said. "It depends on how the registry takes shape. If it doesn't put all the weight on the subcontractor and supplier and they give us a reasonable amount of time [for notices], it could be a good thing for everyone, but it all depends on the structure."

Black noted that the idea of a registry, though brand new in Oklahoma isn't one that necessarily has to be bad for subcontractors and suppliers. She said Dolese was "more than happy to share information" on tradeline data about whether subcontractors and such are paying their creditors in a timely fashion. Vogt, however, was critical of the potential changes to pre-lien notice statutes, noting "everyone was comfortable with what we had and set it up in their systems."

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