People who supply materials or labor ordered by
your contractor are permitted by law to le a lien
only if they do so within 90 days of cessation of
performance or delivery of materials. The time
frame is spelled out in RCW 60.04.091.
If you enter into a contract to buy a newly built
home, you may not receive a notice of a lien based
on a claim by a contractor or material handler. Be
aware that a lien may be claimed even though you
have not received a notice.
Before making nal payment on the project, request
a completed lien release form from each contractor
and material supplier. A sample of this “Release of
Lien” form is available at www.Lni.wa.go v/FormPub/
Detai l.asp?DocID=1877 or from any L&I ofce.
You have nal responsibility for seeing that all bills
are paid even if you have paid your contractor in full.
If you receive a notice to enforce a lien, take the
notice seriously. Let your contractor know you have
received the notice. Find out what arrangements are
being made to pay the sender of the notice.
When in doubt, or if you need more details, consult
your attorney. When and how to pay your contractor
is a decision that requires serious consideration.
What you should know about contracts
If your contractor fails to pay subcontractors,
suppliers or laborers or neglects to make other
legally required payments, those who are owed
money can look to your property for payment, even
if you have paid your contractor in full. This is true
if you have hired a contractor to build a new home
or are buying a newly built home.
It is also true when you remodel or improve your
property, although the amount of your liability
may be limited to the amount you owe the prime
contractor at the time a lien is led.
Under Washington laws, those who work on your
property or provide materials and
are not paid have a right to enforce
their claim for payment against
your property. This claim
is known as a
construction
lien.
Facts About Construction Liens
Reminder: Washington laws
require contractors to give
you a disclosure statement if
your contract exceeds $1,000
[RCW 18.27.114(A) or (B)].
How to protect your investment
If you are dealing with a lending institution, ask
your loan ofcer what precautions the lending
institution takes to verify that subcontractors and
material suppliers are being paid when mortgage
money is paid to your contractor.
Request lender supervision when dealing with
a lending institution that provides interim or
construction nancing.
Ask the prime contractor to disclose all potential lien
claimants as a condition of payment. A lien claimant
must mail (by certied or registered mail or by
personal service) a copy of the claim of lien to the
owner within 14 days of the time the lien is recorded
[RCW 60.04.091(2)]. While an action is ongoing, an
owner may withhold from this prime contractor the
amount of money for which a claim is recorded by a
subcontractor, supplier or laborer [RCW 60.04.151].
It is recommended that your check be made payable
jointly, naming the contractor and the subcontractor
or supplier as payees.
Upon payment and acceptance of the amount due,
the owner has the right to an executed release of all
lien rights by lien claimants [RCW 60.04.071].
Consider using an escrow agent to protect your interests.
Find out whether your escrow agent will protect you
against liens when disbursing payments. If you are
interested in this alternative, consult your attorney.
Request that your contractor post a performance
bond in the amount of the project cost. That will
give you recourse in the event the contractor fails to
complete the building agreement.
PUBLICATION F625-017-000 [10-2008]
Upon request, foreign language support and formats for persons
with disabilities are available. Call 1-800-547-8367. TDD users,
call 360-902-5797. L&I is an equal opportunity employer.
How to avoid lien problems
Ask for the disclosure statement that advises you
of your rights and responsibilities.
For greater protection, you may withhold a
percentage of your contract until you are satised
with the project.
Before making nal payment for your project,
require a signed lien release from all major
contractors and suppliers.
Make your checks payable jointly to both the
contractor and the subcontractor or supplier
as payees.
For more information
Online: www.Lni.wa.gov/TradesLicensing/
Contractors/HireCon
Contractor Registration Hotline: 1-800-647-0982
You may also call your local L&I ofce. See
listings under “Washington State of” in the
government section or the white pages of the
telephone book.
Please note:
This notice was prepared by the Department of
Labor & Industries, Specialty Compliance Services
Division, for reproduction by lending institutions and
contractors for distribution to their clients. It explains
the basics of the construction lien law to help you
protect yourself. This information is not a reflection
upon the abilities or credit of your contractor.
