Washington Appellate Court Rules Pre-Construction Work is Not Subject to Lien

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The Washington Court of Appeals is continuing the recent trend of invalidating mechanic’s liens for lack of strict compliance – this time by concluding that the work provided by the contractor (drilling test pits and obtaining storm water permits) was not subject to Washington’s lien statute because the work was performed in connection with preparing a bid, not an improvement of the property, and was not done at the direction of the owner.

In the latest case from Division Three of the Court of Appeals, Colorado Structures, Inc. v. Western Development Partners, LLC, Western Development Partners approached a general contractor, Colorado Structures, Inc., (“CSI”), about expanding a mall in Walla Walla, WA. Although Western Development did not own the property, it had the right to purchase the property from the property owner. CSI evaluated the site and worked with Western Development regarding the expansion. When an engineering report suggested groundwater at shallow depths, CSI hired a subcontractor to drill test pits and investigate the site. CSI did not have a contract with and did not bill Western Development for this work, but maintained that the work was included as pre-construction costs in later contracts. Western Development later sold its right to purchase the property to another entity and CSI eventually entered into four separate contracts for the construction of the mall extension with that entity. CSI started construction and after failing to get paid, filed a lien on the property with a start work date that backdated to the drilling and permitting work. CSI then asked the trial court to establish that its lien had a higher priority than that of the new property owners due to the pre construction worked performed.

Please see full update below for more information.

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Published In: Civil Remedies Updates, General Business Updates, Construction Updates, Finance & Banking Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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