It’s time to begin working on your forms for the Preliminary Notice and the Notice of Intention to File Lien. We will continue our discussion of the lien process and how you can expect to be paid after a lien has been filed. Again, these steps cannot be ignored and each one is crucial to the survival of your lien against a project.
Lien Statement. As you will recall, the Notice of Intention to File Lien must be submitted at least twenty (20) days before the lien can be filed. If the parties are unable to reach a resolution during that window, it is time to file the Lien Statement. An example of a Lien Statement can be found at Wyo. Stat. § 29-10-104. Generally, it is a simple form. However, as discussed earlier, it is important to plan ahead. The following deadlines are in place for contractors or subcontractors to file their lien statements with the county:
If acting as the contractor: The Lien Statement must be filed within 150 days of the earlier of: (i) the last day when work was performed or (ii) from the date of substantial completion of the project. Note, the property owner can file a Notice of Substantial Completion of the project. If they do, the 150-day deadline begins to count down. If the owner does file this notice, they must also send you a copy.
If acting as a subcontractor: The Lien Statement must be filed within 120 days of the earlier of: (i) the last day when work was performed or (ii) from the date of substantial completion of the project. Or after the last day work was performed at the direction of the contractor or other person authorized to provide direction on the project.
With the above deadlines in place, it is imperative that you continuously monitor your clients’ payment progression. If you wait three or four months to begin acting on a delinquent account, you may already be too late to file a Lien Statement. Be mindful of the dates, get the Lien Statement filled-out, signed, notarized and filed as soon as possible.
Notice of Filing. Within thirty (30) days of filing the Lien Statement, you must send a Notice of Filing Lien to the record owner of the property. While not required by the form found in Wyo. Stat. § 29-10-103, we also recommend also submitting a copy of the filed Lien Statement (it tends to give the property owner a “boost” in issuing a payment or initiating a claim against other contractors whom they may have already paid).
Satisfaction of Lien. If the record owner of the property pays the amount due and owing under the Lien Statement, a Satisfaction of Lien (an example is found in Wyo. Stat. § 29-10-106) must be filed with the County Clerk’s Office within thirty (30) days of the payment. In addition, within that same timeframe, the recorded Satisfaction of Lien should be mailed to the record owner of the property. Failing to file the Satisfaction of Lien may subject you to liability under Wyoming Statute § 29-1-314.
Foreclosing Lien. If the record owner of the property does not pay the amount due and owing, it will be necessary to foreclose upon the Lien Statement. Note, this action must be started within 180 days of first filing the Lien statement. After that timeframe, the Lien Statement shall expire and you cannot hold the property for payment.
Foreclosing the Lien Statement will be a lawsuit filed in the applicable District Court for the county where the property is located (we highly recommend obtaining the assistance of an attorney who is experienced in these actions). Be completely certain that the proceedings are filed prior to the expiration of the 180 day period.
So long as all of the prior forms and paperwork are properly complied with, you can expect to be in the lawsuit anywhere from eight (8) months to two (2) years (depending on the issues presented and the availability of the court in your area). Fortunately, Wyoming’s Statutes provide that the prevailing party in a foreclosure action is entitled to recover all costs and expenses reasonably associated with the action, including reasonable attorney fees. If all goes as expected, you will receive an order from the court which grants you the ability to sell the real property at a public auction.
The sale of the property is conducted in a fashion similar to a bank foreclosing upon a mortgage. If the property has other liens or encumbrances against its title, those parties are entitled to notice of the lawsuit and of the sale. Unfortunately, having the right to sell a piece of property does not always mean that you will recover the full amount of your work as the other parties may get a piece of the pie (depending on the type and timing of their encumbrance of the property). Regardless, having the ability to sell the property is a powerful weapon for you to utilize when payments are not received for your hard work.
In conclusion, having a valid and perfected lien is a matter of timing and attention. Spending sufficient time on these forms and proceedings now can result in significant savings and realizations later. Do not be hesitant to contact an attorney to discuss these matters and how you may be able to prepare yourself for when (not if) a client does not pay you. This investment will now help you relax.