The District of Columbia Mechanic's Lien statute recognizes that contractors and subcontractors (and sometimes others) who do work on real property but are not compensated pursuant to the terms of their contract are creditors and are entitled to a lien to ensure they get paid. See generally, King Carpentry, Inc., v. 1345 K Street, S.E., 262 A.3d 1105 (D.C. 2021). This statutorily created tool provides a party with security interest in the owner's ownership or leasehold interest in the real property for unpaid labor, material, or construction services.
In the District of Columbia, every building erected, improved, added to, or repaired at the direction of the owner or the owner's agent including the land on which the building sits is subject to a lien in favor of the contractor who contracted with the owner, as well as to subcontractors, materialmen, and laborers. See D.C. Code § 40-301.01 and § 40-303.01. The lien amount is the amount of the contract price, or in the absence of an express contract, the reasonable value of the project. The lien in favor of the contractor/subcontractor created by the D.C. Code may ultimately be enforced by the sale of the premises to which the lien is attached, and the proceeds of sale applied to satisfy the lien. See D.C. Code § 40-303.08. However, in order to enforce the mechanic's lien, the contractor/subcontractor is required to strictly follow all the requirements set out in the statute. As such, it is imperative for general contractors, subcontractors, and materialmen/suppliers doing business in D.C. to understand whether they have a mechanic's lien interest, the requirements for establishing and preserving that interest, and the procedures for enforcing mechanic's lien rights. In this series of articles, we will cover the basics of those requirements.
A mechanic's lien is statutorily created upon commencement of the work. See D.C. Code § 40-301.01. The lien is perfected and must be preserved by filing a notice of intent to enforce the lien with the Recorder of Deeds of the District of Columbia either during the construction or within 90 days after the earlier of the completion or termination of the project. If the notice of intent is not recorded in the Recorder of Deeds Office within the required time, the lien terminates. Additionally, the notice of intent must be sent to the owner via certified mail within 5 business days of the filing in the Recorder of Deeds Office. Thereafter, the lien may be enforced by filing suit seeking sale of the owner's property interest within 180 days of recording the notice of intent lien. There is an additional requirement that a lis pendens be filed in the Recorder of Deeds Office within 10 days of filing suit (i.e., a notice of pendency of action affecting the ownership interest in real property). Missing any of these deadlines will result in the lien rights being terminated. If the lienholder prevails in the lawsuit, the court will order the sale of the owner's property interest and direct that the lienholder be paid from the proceeds of the sale.
Suits to enforce mechanic's liens, if successful, result in an order of sale of the owner's property interest. Standing alone, the suit to enforce a mechanic's lien does not result in a money judgment. However, suits to enforce mechanic's liens are often joined with breach of contract claims and equitable remedies intended to obtain a money judgment against the debtors.
In the District of Columbia, mechanic's lien rights are not available to all parties that might provide labor or materials to a construction project. In general, statutory mechanic's lien rights are afforded only to those having direct contractual relationships with the owner or general contractor in a project. This includes the general contractor and others who may contract directly with the owner. It also includes subcontractors, materialmen, or laborers who contract with the original contractor to furnish work or materials for the completion to the project. Statutory mechanic's lien rights are not available to sub-subcontractors or others who contract with subcontractors. Moreover, in order to enforce mechanic's lien rights in the District of Columbia, an entity must be licensed to do business in D.C. and be in good standing with the Department of Consumer and Regulatory Affairs.
Carr Maloney, P.C. represents contractors and subcontractors throughout the entire mechanic's lien process. Thanks for reading and please subscribe to our blog. Our next articles will focus in more detail on who has lien rights under the D.C. Mechanic's Lien statute and the statutory requirements for establishing and enforcing those rights.
Originally published by 25 April 2023
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
