Construction Claims and Liens: Notice, Documentation, and Protection of Rights of Subcontractors and Suppliers

Recording of a 90-minute CLE webinar with Q&A


Conducted on Wednesday, December 2, 2020

Recorded event now available

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Program Materials

This CLE webinar will guide construction counsel in the best methods of securing claims and liens for subcontractors and suppliers and what defenses an owner or general contractor may have. Lien rights and remedies vary greatly between states, and these distinctions are often difficult for owners, contractors, and subcontractors to navigate. Most states apply lien laws strictly--meaning technical noncompliance can result in forfeiture of lien rights or defenses. Our panel will provide the relevant information on how to comply with lien requirements and comprehend potential issues that may arise if lien rights are asserted on your project.

Description

Construction claims hinge on the delicate balance between the parties' contractual terms and the applicable state or federal laws and statutes. Parties must examine both matters to determine whether there is a claim and methods to provide timely notice of a claim. Parties must further consider how courts or arbitrators may interpret the agreement when parties operate outside of the contract's provisions and boundaries regarding notice.

AIA and other standard construction contracts set forth the procedures for proper notice of claims, including the timing and manner of delivery, who must receive notice, and what must be explicit in the notice. A party potentially impacted by a claim must consider preserving that claim and maintaining good contractual relations with other contractors and suppliers. Counsel must advise parties against relying on verbal communications and correctly documenting the elements for proving a claim at the time of its occurrence during the progress of the work on the project.

Liens arise from statutes in all 50 states. These laws vary greatly and in some states may require strict compliance to avoid inadvertent loss of lien rights. Counsel for all participants must be aware of who has lien rights and what types of work qualify under state law as improvements. Counsel must also be aware of the nuances of these statutes, which can require notice at the beginning of a project or periodically through the progress of the project to preserve lien rights. Learning the applicable lien law after it becomes apparent that a lien should be filed is oftentimes too late. Provisions with specific requirements to maintain rights include timing, notice, service of a claim of lien, and how foreclosure of the lien is accomplished. Loss of lien rights may leave subcontractors and suppliers with limited ability to collect on performed work, particularly in cases of insolvent or general contractors.

Parties must be wary of lien waivers and releases that include language which may limit claims or collection of damages. General counsel and subcontractors should be aware of the possible need to pursue a claim against a payment bond that would present an alternate right to recovery on a defaulted construction contract.

Listen as our authoritative panel discusses the nuances of filing notices of claim or liens to preserve the legal rights of subcontractors and suppliers. The panel will provide practical advice on preserving these claims while working on complex projects with potentially ongoing claims and subsequent lien issues.

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Outline

  1. Claims: notice
    1. What's included
    2. How delivered
    3. Who receives
    4. Timely
    5. Defenses
    6. Exceptions
  2. Liens
    1. How to separate yourself from the pack with a mechanic’s lien
    2. Lien preservation and filing requirements
    3. Enforcing (or defending against) mechanic’s liens
    4. Traps for the unwary
      1. Waivers (Contract and Payment)
      2. Differing deadlines/State requirements
      3. Last date of wor
  3. Waivers
    1. Conditional vs. unconditional
    2. Forms
    3. Prospective waivers
  4. Bonds
  5. Damages

Benefits

The panel will review these and other key topics:

  • What constitutes a claim under a standard construction contract (such as AIA)?
  • How must notice be delivered? What is considered timely? Who must be provided notice?
  • Who has lien rights under the law? What rights does the subcontractor or supplier have outside of lien rights?
  • What state requirements exist for filing a valid lien?
  • How can a lien be contested and how is a lien foreclosed upon?
  • How is recovery of damages, including attorney's fees, limited in lien claims?

Faculty

Cahalan, Scott
Scott D. Cahalan

Partner
Smith Gambrell & Russell

Mr. Cahalan has substantial experience representing owners, contractors, subcontractors, engineers, architects,...  |  Read More

Travers, Eric
Eric Travers

Director
Kegler Brown Hill + Ritter

Mr. Travers practices primarily in the firm’s Construction Law area, representing subcontractors, general...  |  Read More

Other Formats
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Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

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