Construction parties must always be proactive when it comes to protecting their lien rights. In Washington, as in most places, protecting your right to file a mechanics lien begins by your serving the required preliminary notice.
Washington requires certain construction parties to serve what is known as the Notice to Owner (also called the Notice of Right to Claim a Lien). The Notice to Owner essentially allows a lower-tier party to warn a property owner about the risk of having to pay twice in the event that a general contractor bails on paying their subcontractors and material suppliers.
In effect, serving the Notice to Owner is necessary for certain parties before they can file a valid mechanics lien. This guide will answer your questions about the Washington Notice to Owner, from which parties are required to serve this notice all the way to how you must prepare a valid Notice to Owner form.
Who must serve a Washington Notice to Owner?
All construction parties working in Washington must serve a Notice to Owner except for the following:
- Parties with a direct contractual relationship with a property owner
- Parties who only perform labor on a project
- Parties with a direct contract with a general contractor, unless they are working on an owner-occupied single-family residence
Keep in mind that even if you have a direct contract with the general contractor of an owner-occupied single-family residential project, you will still have to serve a Notice to Owner on the owner-occupier of said property to ensure full protection of your lien rights.
When to serve a Washington Notice to Owner
In general, it is best practice to serve the Notice to Owner in Washington within the following deadlines to ensure full protection of your lien rights:
The Washington Notice to Owner may be served at any time after you begin working on a project. However, if the notice is not sent promptly, your mechanics lien will cover only the work that you performed within the 60 days prior to the day that you serve the Notice to Owner.
In the case of new construction of a single-family residential property, a Notice to Owner, when not sent promptly, will protect your lien rights only within the 10 days prior to the date you deliver the notice.
For owner-occupied single-family properties, you must serve the Notice to Owner as early as possible. This is because your mechanics lien for this type of project will be enforceable only over the amount that is yet to be paid by the owner to the general contractor.
If, for example, the owner-occupier receives your Notice to Owner after they pay the general contractor $15,000 of a total of $20,000, you will be allowed to make a mechanics lien claim only on the remaining $5,000.
Note that the Notice to Owner is considered “received” by the owner-occupier when they have actually received the notice by personal delivery or in three days after the date of mailing.
What happens if you do not serve a Notice to Owner in Washington?
Failing to serve the Washington Notice to Owner revokes your right to file a valid mechanics lien. Failing to serve this notice within the prescribed deadlines, meanwhile, will limit the coverage of your lien rights. This implies that you may not be able to recover the full payment that you rightfully earned.
How to serve a Washington Notice to Owner
- Prepare the Washington Notice to Owner form
The following information must be in your Washington Notice to Owner form:
- Name of the property owner
- Name of the party that hired you
- Your name, address, and telephone number
- Description of the property where the project is located (street address or general location sufficient for identification will be enough)
- Brief description of the service that you provide for the project
Washington requires the Notice to Owner to be in substantially the following form:
NOTICE TO OWNER
IMPORTANT: READ BOTH SIDES OF THIS NOTICE CAREFULLY.
PROTECT YOURSELF FROM PAYING TWICE
Re: ……………….. (description of property: Street address or general location.)
AT THE REQUEST OF: ……………….. (Name of person ordering the professional services, materials, or equipment)
THIS IS NOT A LIEN: This notice is sent to you to tell you who is providing professional services, materials, or equipment for the improvement of your property and to advise you of the rights of these persons and your responsibilities. Also take note that laborers on your project may claim a lien without sending you a notice.
OWNER/OCCUPIER OF EXISTING RESIDENTIAL PROPERTY
Under Washington law, those who furnish labor, professional services, materials, or equipment for the repair, remodel, or alteration of your owner-occupied principal residence and who are not paid, have a right to enforce their claim for payment against your property. This claim is known as a construction lien.
The law limits the amount that a lien claimant can claim against your property. Claims may only be made against that portion of the contract price you have not yet paid to your prime contractor as of the time this notice was given to you or three days after this notice was mailed to you. Review the back of this notice for more information and ways to avoid lien claims.
COMMERCIAL AND/OR NEW RESIDENTIAL PROPERTY
We have or will be providing professional services, materials, or equipment for the improvement of your commercial or new residential project. In the event you or your contractor fail to pay us, we may file a lien against your property. A lien may be claimed for all professional services, materials, or equipment furnished after a date that is sixty days before this notice was given to you or mailed to you, unless the improvement to your property is the construction of a new single-family residence, then ten days before this notice was given to you or mailed to you.
Brief description of professional services, materials, or equipment provided or to be provided:
IMPORTANT INFORMATION ON REVERSE SIDE
IMPORTANT INFORMATION FOR YOUR PROTECTION
This notice is sent to inform you that we have or will provide professional services, materials, or equipment for the improvement of your property. We expect to be paid by the person who ordered our services, but if we are not paid, we have the right to enforce our claim by filing a construction lien against your property.
LEARN more about the lien laws and the meaning of this notice by discussing them with your contractor, suppliers, Department of Labor and Industries, the firm sending you this notice, your lender, or your attorney.
COMMON METHODS TO AVOID CONSTRUCTION LIENS: There are several methods available to protect your property from construction liens. The following are two of the more commonly used methods.
DUAL PAYCHECKS (Joint Checks): When paying your contractor for services or materials, you may make checks payable jointly to the contractor and the firms furnishing you this notice.
LIEN RELEASES: You may require your contractor to provide lien releases signed by all the suppliers and subcontractors from whom you have received this notice. If they cannot obtain lien releases because you have not paid them, you may use the dual payee check method to protect yourself.
YOU SHOULD TAKE APPROPRIATE STEPS TO PROTECT YOUR PROPERTY FROM LIENS.
YOUR PRIME CONTRACTOR AND YOUR CONSTRUCTION LENDER ARE REQUIRED BY LAW TO GIVE YOU WRITTEN INFORMATION ABOUT LIEN CLAIMS. IF YOU HAVE NOT RECEIVED IT, ASK THEM FOR IT.
Note that you must strictly follow the format as prescribed above, including the required capitalization of select statements.
- Deliver the Notice to Owner to the appropriate parties
After completing your Washington Notice to Owner form, you must serve it on the property owner and the general contractor. Technically you do not have to serve the notice to the general contractor if you have a direct contract with them, but it is still good business practice to serve them a copy.
Serving the Notice to Owner may be done by serving it via certified or registered mail. You may also serve it by personal delivery, in which case you have to secure either an affidavit of service or an acknowledgement receipt signed by the owner. This is to ensure that you have documented proof of your compliance with Washington’s notice requirements.
Best practices when serving a Notice to Owner in Washington
- Serve the Notice to Owner as early as possible
Even though Washington allows you to serve the Notice to Owner at any time after commencing your work on a project, it is still good business practice to notify the owner of your right to file a mechanics lien as soon as possible, preferably within your first week of work.
By serving a properly filled-out Notice to Owner promptly, you are assured that your lien rights are fully protected. If payment issues arise, you may file a mechanics lien and recover the full payment that you duly earned.
- Use the prescribed Washington Notice to Owner form
Washington requires its potential lien claimants to serve a Notice to Owner that follows a specific format. Your Notice to Owner must not only have the required pieces of information, but it must also have the required statements in capitalized format, as prescribed in the sample form pictured above.
Be aware that using the incorrect form or having typographical errors in your Notice to Owner could cost you your lien rights. These minor errors may be grounds for the invalidation of your Notice to Owner, which may limit the amount that you can claim. Make sure that your Notice to Owner is properly filled out before serving it on the property owner(s).
- Remember to file a mechanics lien if payment disputes arise
You must always keep in mind that the Washington Notice to Owner is NOT the same as a Washington mechanics lien; it is simply a notification to the property owner that you are legally allowed to file a mechanics lien on their property if you do not get paid for your work.
Serving a Notice to Owner does not mean that you have already automatically recorded a mechanics lien on the property. Filing a mechanics lien in Washington is a separate process with a different set of requirements.