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Washington is a FULL PRICE lien state for commercial projects, UNPAID BALANCE for residential projects unless direct to owner-occupier.
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Notice to Lender-Withholding of Funds: Applies to any potential lien claimant who has not received payment within five days after the date required by the contract. Unless there is a payment bond of at least 50 percent of the construction financing, the construction lender is subject to a stop notice provision. If notified, the lender must withhold a percentage of the subsequent construction draws, which may not be disbursed accept by agreement or court order. If the lender fails to withhold the funds, the lender's lien will be subordinated to the lien claimant's lien. Lien rights must be maintained to utilize this tool.
- Contractors and Subcontractors must be registered in order to have lien rights in Washington. If a supplier sells to an unregistered contractor or subcontractor the supplier also loses its lien rights.
Is your customer registered: https://fortress.wa.gov/lni/bbip/Search.aspx.
Notice Speed Bumps
- When contracting directly with the owner serve the Information Notice To Owner when:
- Residential Jobs (4 or fewer units) over $1,000.
- Commercial Jobs between $1,000 and $60,000.
- Every person furnishing professional services, materials, or equipment must 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 then notice must also be given to the prime contractor unless the potential claimant has contracted directly with the prime contractor. Therefore MLBS recommends always serving a copy of the notice on the prime contractor.
- A late Notice of Right to Claim of Lien may be served but only traps back 60 (commercial or multi-family projects) of 10 days (single-family residence) from serving of the notice
Mechanic’s Lien Speed Bumps
- After the lien is filed it must be served within 14 days. If the lien is not served the claimant loses his/her right to attorney fees and costs in a subsequent foreclosure action.
Foreclosure Speed Bumps
- In every case in which different construction liens are claimed against the same property, the court shall declare the rank of such lien or class of liens, which liens shall be in the following order:
(a) Liens for the performance of labor;
(b) Liens for contributions owed to employee benefit plans;
(c) Liens for furnishing material, supplies, or equipment;
(d) Liens for subcontractors, including but not limited to their labor and materials; and
(e) Liens for prime contractors, or for professional services.
- The proceeds of the sale of property must be applied to each lien or class of liens in order of its rank and, in an action brought to foreclose a lien, pro rata among each claimant in each separate priority class. A personal judgment may be rendered against any party personally liable for any debt for which the lien is claimed. If the lien is established, the judgment shall provide for the enforcement thereof upon the property liable as in the case of foreclosure of judgment liens. The amount realized by such enforcement of the lien shall be credited upon the proper personal judgment. The deficiency, if any, remaining unsatisfied, shall stand as a personal judgment, and may be collected by execution against any party liable therefor.
- The court may allow the prevailing party in the action, whether plaintiff or defendant, as part of the costs of the action, the moneys paid for recording the claim of lien, costs of title report, bond costs, and attorneys' fees and necessary expenses incurred by the attorney in the superior court, court of appeals, supreme court, or arbitration, as the court or arbitrator deems reasonable. Such costs shall have the priority of the class of lien to which they are related, as established by subsection (1) of this section.
- Real property against which a lien under this chapter is enforced may be ordered sold by the court and the proceeds deposited into the registry of the clerk of the court, pending further determination respecting distribution of the proceeds of the sale.
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