District of Columbia Mechanic’s Lien Law Revised
June 25, 2002
Bryan R. Phillips- Washington
Andrew Stephenson - Washington
Effective March 19, 2002, the District of Columbia Mechanic's Lien Law was revised. D.C. Act 14-204 (the "Mechanic's Lien Amendment Act of 2001" D.C. Register Vol. 49, No. 2, pp. 198-200.), D.C. Code Ann. § 40-301.1, et seq.
The District's lien law previously afforded lien claimants a simple method of filing a mechanic's lien. A claimant filing a Notice of Lien with the District of Columbia's Recorder of Deeds previously provided simply the identity of the property to be liened, the amount of the lien and the name of the party against whose interest the lien is claimed. D.C. Code Section 40-301.02, "Notice," now requires the following additional items to be included with the Notice of Lien:
- a copy of the "work agreement" (i.e., the contract, purchase order, letter of intent, etc.) signed by all parties
- a valid residential home improvement contractor's license issued by the District of Columbia Department of Consumer and Regulatory Affairs, if applicable
- a certificate of good standing issued by the District of Columbia's Department of Consumer and Regulatory Affairs within the past two years, if applicable, and
- a certificate or statement of good standing from the District of Columbia Office of Tax and Revenue including the contractor's local and federal tax identification numbers
The new requirements can be particularly treacherous for the contractor filing a notice of lien in the "eleventh hour" before the statutory period expires (i.e., 90 days after the completion of the building, improvements or repairs). (The time allowed under the former statute for filing the notice of lien was three months; it is now 90 days.) Securing the certificate of good standing from the Office of Tax and Revenue takes at least five business days. Under the new law, a contractor who intends to file a Notice of Lien should begin assembling the necessary documentation well in advance of the statutory deadline.
If a contractor constructing only commercial, and not residential projects intends to file a Notice of Lien, then it should include a copy of its general business license in lieu of the "home improvement contractor's license" required by the amended statute.
Another notable amendment to the Mechanic's Lien Law is a new sunset provision. If a contractor fails to file its Notice of Lien within the 90-day statutory period, or if a contractor fails to commence its suit on the lien within 180 days of having filed its Notice of Lien or from the completion of the building, improvement or repairs, the lien "shall be deemed to have been paid and satisfied without any action on the part of the owner." D.C. Code Ann. §§ 40-303.13 & 40-303.16a.
For more information, contact Andrew W. Stephenson or Bryan R. Phillips by e-mail, or call 888-688-8500.
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