[WSBARP] Priority of mechanics lien recorded post conveyance

[John McLaughlin]

My understanding is that an owner’s title policy would provide coverage for mechanics liens only by endorsement (that would need to be specifically requested) but that a lender will always require such coverage as part of the lender policy, thus triggering the title insurer’s inquiries and requirements to document that there has been no construction activity in the last XX days, obtain lien releases, etc.  Would love to have one of the title insurer attorneys help clarify—always very helpful.

John P. McLaughlin
Direct | 206.905.3231
Email | jpmclaughlin at bmjlaw.com<mailto:jpmclaughlin at bmjlaw.com>

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From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Kary Krismer
Sent: Wednesday, August 30, 2017 3:16 PM
To: WSBA Real Property Listserv
Subject: Re: [WSBARP] Priority of mechanics lien recorded post conveyance

Carrying this out further, I believe the buyer’s title insurance should cover this type of a claim, and that the title company will have a claim against the seller.  I’d need to check the policy language, but I think that’s why the title company asks certain questions of the seller regarding recent events.

Kary L. Krismer
206 723-2148

From: Rick Hoss<mailto:rhoss at hctc.com>
Sent: Wednesday, August 30, 2017 2:27 PM
To: 'WSBA Real Property Listserv'<mailto:wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Priority of mechanics lien recorded post conveyance

You might be missing that the lien relates back in time to the date of first work or material delivery. The form in RCW 60.04.091 asks at Section 2 the Date Claimant began to perform labor or supply materials. They have 90 days after finishing work to file the lien.

If you look closely you might find a smart title insurer who got lien releases from the general before closing, or a sleepy title insurer who did not disclose the possibility of a later lien. Contractors are often asked to release lien rights by title companies, usually generals though.

Lawyers who represent material suppliers advise their clients as soon as they get a large order to make very early delivery of a 2x4 and bag of nails to the site, and carefully document the delivery. (Date Claimant began to supply materials….)

Contractors who claim a lien must prove they provided a RCW 18.27.114 Notice to Customers in order to claim a lien, and they have to keep copy of the customer’s signature documenting receipt of the Notice for 3 years. But this might not apply to subs, who usually still have to send the Notice of Intent to Claim a Lien – see RCW 60.04.031 for Notice requirements and exceptions.


From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Craig Blackmon
Sent: Wednesday, August 30, 2017 2:00 PM
To: WSBA Real Property List Serve
Subject: [WSBARP] Priority of mechanics lien recorded post conveyance

'Mates, your input is appreciated following my ineffective legal research (which was then curtailed by error messages on CaseMaker).

Facts: Owner contracts with GC to build house; Owner pays GC in full without sufficient lien release assurances; Owner sells house, title is conveyed to Buyer by recorded warranty deed; Subcontractor thereafter records an otherwise valid mechanic's lien.

I assumed the lien was invalid on its face since it is subsequent to conveyance. How can Subcontractor foreclose Buyer's superior-in-time interest? I know a mechanics lien can defeat an existing but unrecorded DOT. But superior to a prior recorded conveyance?

Is it as simple as I think? Is this lien invalid on its face? Or am I missing something?

Thanks in advance!!

Craig


Craig Blackmon, Attorney at Law
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