Wyoming’s mechanic’s lien laws are designed to protect individuals who provide labor or materials for the improvement of existing real property or new construction of real property. The intent is to provide a remedy to lien claimants in addition to other remedies afforded at law, such as breach of contract.
The effect of a mechanic’s lien is that an encumbrance is placed on the title of the improved property. The property, in turn, serves as security for the debt incurred for the improvements. The encumbrance remains on the property even if title is transferred to a new owner, unless the obligation is satisfied or the lien is otherwise removed.
Recordation with the county recorder makes the lien public knowledge, placing potential purchasers and lenders on notice that there is a claim against the property that may be superior to any rights they might obtain. This knowledge restricts an owner’s ability to freely sell or mortgage the property.
Ultimately, a mechanic’s lien can be foreclosed, forcing the sale of the liened property, with the proceeds of the sale remitted to the lien claimant to pay the debt. Thus, a properly perfected mechanic’s lien can be a useful tool in collecting money due for unpaid construction services and materials. However, in order to reap the benefits of a mechanic’s lien, and because of the many competing interests surrounding a lien claim in the context of property ownership, lien claimants must substantially conform to all of the requirements of Wyoming’s mechanic’s lien laws.
All potential lien claimants (contractors, subcontractors and materials providers) must send a preliminary notice to the owner in order to preserve their mechanic’s lien rights. Failure to send the notice vitiates a potential claimant’s lien rights. The notice informs the owner that the potential claimant is working on the project, and that a lien may be filed in the event payment is not made.
Contractors must send the notice to the reputed owner or the owner’s designated agent before receiving any payment from the owner, including advances. Subcontractors and materials providers must send the notice to the reputed owner or the owner’s agent within 30 days after first providing services or materials to the project.
Notice of Intention to File Lien
All potential lien claimants must send to the record owner or the owner’s agent a notice of intention to file lien no later than 20 days before filing a Lien Statement. Lien claimants must therefore allow themselves enough time to file the notice while still meeting the overall deadline for filing a mechanic’s lien. The notice shall be in substantially the same format as that prescribed by statute, though case law holds that any notice that would put a reasonable person on notice is valid unless there is a showing of bad faith or the owner was misled.
Filing a Mechanic’s Lien
Filing Deadlines: To file a mechanic’s lien, a lien claimant (contractor, subcontractor, materials providers) must file a lien statement. Contractors must file within 150 days after the last day of work was performed or materials furnished under contract, or from the date the project is substantially complete, whichever is earlier. Subcontractors and materials providers must file within 120 days after their last day of work. The statement must be in substantially the same format as that prescribed by statute. Failure to timely file a lien statement vitiates a claimant’s mechanic’s lien rights.
Notice of Filing Lien: A lien claimant must, within 30 days of filing a lien statement, send a notice of filing lien to the record owner of the property, informing the owner that a lien has been filed. Failure to send notice will not affect the validity of the lien. The notice shall be in substantially the same format as that prescribed by statute.
Lien Claim Foreclosure Lawsuit
Lien claimants have 180 days from the date of filing their lien statement to commence a court action to foreclose the lien. The action must be filed in a court in the county where the property is located. The holder of any prior perfected lien is entitled to notice in suits to foreclose a lien, but failure to give such notice will not render the proceeding invalid.
Jason H. Robinson is an attorney and shareholder at the law firm of Babcock Scott & Babcock, P.C., in Salt Lake City, Utah. He is licensed to practice in the state and federal courts of Utah and Wyoming. Email at email@example.com.