Idaho

Lien Law Overview

General Contractor Disclosure Statement
On 1-4 family residential construction, the general contractor must provide disclosure to the owner of potential lien rights. Idaho Code § 45-525 et. seq.

A general contractor shall provide to a prospective residential real property purchaser or homeowner a written disclosure statement, which shall be signed by the general contractor listing the business names, addresses and telephone numbers of all subcontractors, materialmen and rental equipment providers having a direct contractual relationship with the general contractor and who have supplied materials or performed work on the residential property of a value in excess of five hundred dollars ($500). Idaho Code § 45-525 et. seq.

Obtaining Lien Rights
A party obtains lien rights when they become involved in work or providing materials.

Perfecting Lien Rights
To perfect the lien, a person must file a claim of lien within 90 days after the completion of the labor or services or furnishing of materials or the cessation of the labor or services or furnishing of materials, for any cause, record the claim of lien. (Idaho Code § 45-507.) A true and correct copy of the claim of lien must be served on the owner or reputed owner (owner or reputed owner does not include a trustee of a deed of trust) of the property either by an officer authorized by law to serve process delivering a copy thereof to the owner or reputed owner personally or by mailing a copy thereof by certified mail to the owner or reputed owner at his last known address. Such delivery or mailing shall be made no later than five (5) business days.

Lien Waivers

Lien Waiver Summary

Idaho law does provide that an express waiver of a mechanic’s lien must be supported by consideration in order to be effective and binding. (Pierson v. Sewell, 97 Idaho 38, 42-43 (Idaho 1975).)

Are title companies required by law to manage construction loan disbursements?

No, but title companies are insurance companies who may require -in exchange for insurance coverage – some level of control over how loan proceeds are disbursed. If they do, the lender either must comply with the title company’s demands or risk not having coverage for the loan (or try another title company, but they tend to share best practices by location/region).

Can a mechanics lien have priority over a pre-existing mortgage in Idaho?

Mechanics liens have priority over any lien, mortgage, or other encumbrance that may have attached after the time when the lien claimant’s involvement with the building, improvement, or structure was commenced, work done, or materials or professional services were commenced to be furnished. The same result occurs in the event that the lien, mortgage, etc. is not perfected prior to commencement of the lien claimant’s work or delivery. Each lien claimant has a separate priority date based on the date when the lien claimant began to work or furnish materials. As a result, it is possible for some lien claimants to have priority subordinate to the lien of the deed of trust.

A November 13, 2014, Idaho Supreme Court decision (Hap Taylor & Sons, Inc. vs. Summerwind Partners, LLC, 338 P.3d 1204, 1211 (Idaho 3014) interpreted the relevant statute to mean that the priority date for the materialmen’s lien of an engineer providing professional services is the date the engineer commenced to furnish any authorized professional services under contract regardless of where the services were rendered (in that case, services were rendered under a professional services agreement in the engineer’s office prior to entry on the project site); no visible evidence of the work on the site is required.

Contractor Licensing

The Idaho Contractors Board seriously governs contractors in accordance with Idaho Code § 54-520 et. seq. It is illegal to perform contractor work without a license. The term “contractor” is broadly defined and includes anyone engaged in construction and anyone who hires those engaged in construction. There are some people who are exempt from the licensing requirements, including:

1. people who furnish materials only, and don’t do any construction of those materials on a construction project
2. people who work on their own home
3. people who work on a home they live in, even if it is owned by another person

Failure to obtain a license will result in loss of lien rights, which extends to contractors working on the project who knew that another contractor working with them was unlicensed.

Anyone applying for a contractor’s license must have a certificate issued by an insurance company authorized to do business in the state of Idaho that the applicant has procured and has in effect a general liability policy, including products and completed operations insurance covering the applicant’s construction operations in the sum of not less than three hundred thousand dollars ($300,000) single limit. See Idaho Code § 54-5210.

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