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Notice of Lien

Deadline
90 days from the lien claimant's last work
Cannot be extended
No trivial work

Verification

Acknowledgement

Blanket Lien
A lien is not allowed on multiple parcels or condo units where the lien claimant contracts with the owners separately.

Example
Contractor denied lien on multiple adjacent buildings for repairs after the buildings were damaged by a common fire, where the contactor had separate contracts with each owner but recorded a single lien on all the buildings

Substantial Compliance

Property description
Identification of Improvement
Amount stated
Where lien of supplier originally included items in invoices which the supplier could not prove were incorporate3d in the building, the lien did include the value of a number of items which were incorporated and was therefore not defective and invalid. Electrical Wholesale Supply v. Nielson


Foreclosure Deadline


Account Management

Open Account Defense
The open-account defense can be applied to a lien claim when the supplier filing the lien only relied upon the general credit of the purchaser and not the construction project as additional security
- This defense if defeated by creating a job account for each construction project and making sure that ship tickets and invoices reference the project

Examples
Lumber company allowed to enforce lien even though payments from contractor were applied on a first-in-first-out (FIFO) basis but even though sales were on an open account, but the "vast majority" of invoices referenced the construction project BMC West v. Horkley
Material supplier denied a lien where construction materials were sold on a running account and the suppliers "was neither concerned, not interested in the use, purpose or location of the structure...". Layrite Products v. Lux

Application of Payments
Where a supplier receives payments for an account and has knowledge of the source of the funds and the intended purpose, i.e. account to be paid, the supplier must apply the funds to that account.

Example
Where the suppliers received checks from the owner which were drawn on the construction loan, and the checks were attached to the supplier account statement and paid by lot and block number, the supplier was obligated to apply the payments as intended. Mountain Home Redi-Mix v. Conner Homes


Furnishing v. Incorporation

Presumption of Incorporation Delivery of Materials to Project Site

In Idaho, a lien applies only to those materials which are incorporated in to the project, and when the supplier can prove materials were delivered to the project site, a presumption of incorporation arises.

Examples
Supplier denied a lien where the supplier liened a 160 acre parcel but could not show that a specific building or structure existed to which the supplier has delivered materials. Chief Industries v. Schwendiman
Where many of the materials were picked up at will-call window rather than physically delivered to the jobsite by the supplier, the supplier was still entitled to the lien where the subcontractors who purchased the materials testified as to which materials were used in the job. Electrical Wholesale Supply v. Nielson


Substantial performance of contract

Lien may not be enforced where the contract is not substantially performed.

Example
Contractor not entitled to a lien where contract was not substantially performed. The contractor's lack of performance of work in a workmanlike manner included: that the floors and ceilings sloped, the rooms were not square, the roof sagged due to improper bracing, and the foundation was not true and plumb. Nelson v. Hazel


Waiver of Lien Rights

Waivers must be supported by consideration and consideration can be the promise to provide proceeds from construction contract already owed to lien claimant so long the money is paid. But the full amount of the promised payment must be made for the waiver to be binding. Pierson v. Sewell

Where waiver specifies the waiver of right through a specific date and work continues after that date, the waiver does not apply to the latter work. Baker v. Boren.


Leased Property


Same Project, Multiple Accounts/Contracts

Where materials are furnished to one or more contractors working on the same project, but under separate contracts or accounts with the supplier, the supplier has a separate lien deadline for each contract/account. Valley Lumber v. Driessel


Rental Equipment

No lien in Idaho for rental of equipment unless the equipment is incorporated, consumed or destroyed by the construction project.


Contractor Registration
  1. All contractors must be registered unless exempt.
  2. Registration does not require passing any test.
  3. Lack of registration results in possible criminal penalties and denial of lien rights.
  4. Supplier's are exempt from registration.
  5. Suppliers may be denied lien rights on a specific project if they sell to an unlicensed contractor if:
    1. The supplier has actual knowledge the contractor was unlicensed; or
    2. The Supplier does not reasonably believe the contractor was licensed

Exemptions:

  • Licensed Contractors & Others. Anyone licensed, registered, or otherwise regulated by the state of Idaho (i.e. Architects, Electrical Contractors, Engineers & Surveyors, Plumbers, Manufactured Home Installer, Service Company Contractor, HVAC installers, etc.), so long as they are not acting with the intent to evade this chapter.
  • Employees of a Contractor. A person who only performs labor or services for wages or a salary as an employee of a contractor, or as an employee of a person otherwise exempt by the provisions set forth in this chapter, or strictly as a volunteer or as part of a bona fide educational curriculum or nonprofit charitable activity for which no wages or salary shall be paid. This exemption shall not apply to any subcontractor or other independent contractor who is not otherwise exempt.
  • Government Representatives. An authorized representative of the United States government, the State of Idaho, or any incorporated municipality, county, alternative form of local government, highway district, reclamation district, or other municipal or political corporation or subdivision of this state.
  • Public Utilities. A public utility operating under the regulation of the Idaho public utility commission as set forth in Title 61, Idaho Code, in the construction, maintenance, or development work incidental to its own business.
  • Incidental Oil, Gas, or Mineral Production. A person who performs repair or operation incidental to the discovery or production of oil, gas or minerals or incidental to the drilling, testing, abandoning, or other operation of an oil or gas well or a surface or underground mine or mineral deposit.
  • Suppliers. A person who only furnishes materials, supplies or equipment and who does not install or fabricate them into, or consume them in the performance of, the work of the construction contractor.
  • Project under $2,000.00. A person performing work on one undertaking or project considered casual, minor, or inconsequential, whether by one or more contracts, the aggregate contract price of which, for labor and materials and all other items, is less than two thousand dollars ($2,000). The exemptions prescribed in this paragraph shall not apply when the work or construction is part of a larger construction project, whether undertaken by the same or a different construction contractor, or in which a division of the operation is made into contracts of amounts of less than two thousand dollars ($2,000) for the purpose of evasion of this act.
  • Agriculture. A farmer or rancher while engaged in a farming, dairying, agriculture, viticulture, horticulture, or stock or poultry operation.
  • Building Exempt from Building Code. A person who engages in the construction of an agriculture building that is exempt from the Idaho building code.
  • Canal Companies & Special Service Districts. An irrigation district, canal company, reservoir district, ground water district, water district, water measurement district, recharge district, flood control district, drainage district, or other water delivery or water management entity, or an operating agent of irrigation districts whose board consists of directors of its member districts.
  • Fire Prevention. An operation related to clearing or other work upon land in rural districts for fire prevention purposes.
  • Owner Seller. An owner who contracts for work to be performed by a registered contractor on his own property. This exemption does not apply to an owner who, with the intent to evade this chapter, constructs a building, residence or other improvement on the owner's property with the intention and for the purpose of selling the improved property at any time during the construction or within 12 months of completion of the construction.
  • Owner Builder. An owner who performs construction on their personal residential real property, whether or not occupied by the owner. This exemption shall not apply to an owner who is otherwise regulated by this chapter who constructs a building, residence or other improvement on their property with the intention and purpose of promptly selling the improved property, unless the owner has continuously occupied the property as the primary resident for at least 12 months prior to the sale of the property.
  • Commercial Owner. Owners of commercial properties, or lessees of commercial properties with the consent of the owner, who, whether themselves or with their own employees, perform maintenance, repair, alteration or construction work in or upon the properties.
  • Real Estate Agents. A real estate licensee acting within the scope of their license who, incident to a regulated real estate transaction, assists clients in scheduling or performing nominal maintenance and repairs upon properties being transferred. This section does not authorize a real estate licensee or a property manager to act in the capacity of a contractor unless registered as such.
  • Logging. A contractor engaged in the logging industry who builds forest access roads for the purpose of harvesting and transporting logs from forest to mill.
  • Tenants. A person working on their own residence, if a person other than the residents owns the residence.
  • Chemical Buildings. A person who engages in the construction of building to be used primarily for industrial chemical process purposes as set forth in Section 39-4103, Idaho Code.
  • Modular Homes. A person who engages in the construction of a modular building equipped with the necessary service connections and made so as to be readily moveable as a unit on its own running gear and originally designated to be used without a permanent foundation, that are constructed in the state of Idaho for installation on a building site outside the state.

 
 

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