When can you register a construction lien against a landlord's interest in property

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The question often arises whether there is right to a register a construction lien against a landlord/owner’s interest in property with respect to a contract with a tenant to provide improvements to its leased premises. In these situations, the construction lien is usually only against the tenant’s leasehold interest in the property. The construction lien can be enforced by selling the lease to satisfy the lien.

In order for a construction lien to also attach to the ownership interest in the property (i.e. the landlord/owner’s interest in the property), the contractor must have provided the landlord/owner with written notice of the improvement to be made. In order to avoid liability and a successful lien claim against the ownership of the property, the landlord/owner has 15 days after receiving this notice from the contractor to give the contractor written notice that the landlord/owner assumes no responsibility for the improvement to be made to the property. If the landlord/owner provides the written response that it is assuming no responsibility for the improvement, the construction lien will only attach to the tenant’s leasehold interest in the property.

The only other situation in which a landlord/owner may be found liable and a lien can be registered against the ownership of the land is if the owner specifically requested that the lien claimant do the work that is the subject of the construction lien.

 

Topics:  Landlords, Leases, Liens, Tenants

Published In: General Business Updates, Construction Updates, Commercial Real Estate 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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