How and why to use construction liens

by Janelle Guthrie Communications Director

One of the best benefits of your local home building association membership is access to topnotch legal resources through BIAW. As inflation continues to hit our customers’ wallets, BIAW’s legal team advises its members to familiarize themselves with some tools to protect your businesses.

Always have a contract

BIAW’s Contract Subscription Service is a low-cost way to protect your business. Available exclusively for BIAW’s builder members, this service gives builders and remodelers access to more than two dozen contracts and addenda. These documents all come with instructions and training on how to use them to ensure you and your customers are clear on responsibilities and payment.

While ideally, the builder-customer relationship will be a smooth one, we always say, “Good contracts make good builders.” A solid contract allows you to hold people accountable in court if needed.

Learn more about BIAW’s Contract Subscription Service at Biaw.com/program/legal.

Consider a construction lien

While contracts are important, construction liens are another effective way to secure payment for the labor and/or materials you put into a person’s property.

In almost all cases, it is less expensive and timeconsuming than suing for breach of contract. When you file a lien, you have the right to require the County Sheriff to sell the property you put work into and collect the amount owing from the sale proceeds.

Because of this right to sell and collect, most lending institutions or prospective purchasers will avoid any property that has a lien filed against it. Who would want to invest in a piece of property if someone else has the right to sell and take some of the money first?

Thus, when you file a lien, you are in a much better position to secure payment. Of course, filing a lien does not guarantee payment, but it does prevent the owner from selling the property without paying the lien or posting a bond.

If you have not filed a lien (or do not meet the requirements to file a lien), but you have a contract with the owner for the work you performed, you can always proceed to court. Generally, a lien is a single piece of paper filed with the county recording office. However, Washington has some rules regarding who can file a lien and what the lien must contain.

For more information and resources on how to file liens, Biaw.com/how-to-file-a-lien