Washington

Washington Construction Lien Law

Lien Law Overview

Washington’s mechanics lien law makes several distinctions between residential and commercial property.

Notice of Right to Claim Lien – Every person furnishing professional services, materials, or equipment for the improvement of real property must give the owner or reputed owner (and, if necessary, the prime contractor) notice in writing of the right to claim a lien. The notices are set forth in the statute and have different requirements depending upon whether the project is residential or commercial. See RCW §60.04.031.

Filing Claims of Lien – Two or More Residential Units. When furnishing labor, professional services, materials, or equipment for the construction of two or more separate residential units, the time for filing claims of lien against each separate residential unit will start to run upon cessation of the furnishing of labor, professional services, materials, or equipment on each residential unit, as provided in this chapter. Rev. Code Wash. (ARCW) § 60.04.101.

Disclosure Statement – Every real property lender must provide a copy of a Mortgage Disclosure Statement to all borrowers obtaining loans for residential construction or residential repair or remodeling. See RCW § 60.04.250. Every contractor must provide the MDS to all customers regardless of whether it is for residential or commercial purposes. See RCW § 18.27.114. The Washington Department of Labor and Industries publishes this form, which is accessible at: https://www.lni.wa.gov/forms-publications/f625-030-000.pdf.

Lien Waivers

Lien Waiver Summary

Upon payment and acceptance of the amount due to the lien claimant and upon demand of the owner or the person making payment, the lien claimant shall immediately prepare and execute a release of all lien rights for which payment has been made, and deliver the release to the person making payment.

Statutory Form
Not Required

Notary
Not Required

Electronic Signature
Acceptable

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

No

Notices

Notice of Commencement (or similar like event)

No, however, the state uses a disclosure statement (Model Disclosure Statement) that should be considered as a notice in the early stage of construction on certain construction projects.

Preliminary Lien Notifications

Every person furnishing professional services, materials, or equipment for the improvement of real property must give the owner or reputed owner notice in writing of the right to claim a lien. RCW § 60.04.031(1). The Notice to Owner form is set forth in the statute. RCW § 60.04.031(4). A lien may be claimed for all professional services, materials, or equipment furnished after a date that is 10 days before this notice was given to you or mailed to you (for construction of a new single-family residence) or 60 days before this notice was given to or mailed to you for all other construction projects.

Any contractor agreeing to perform any contracting project: (a) For the repair, alteration, or construction of four or fewer residential units or accessory structures on the such residential property when the bid or contract price totals one thousand dollars or more; or (b) for the repair, alteration, or construction of a commercial building when the bid or contract price totals one thousand dollars or more but less than sixty thousand dollars, must provide the customer with the Model Disclosure Statement (MDS) before starting any work on the project. The MDS is published by the Washington Department of Labor and Industries, must be signed by the customer (owner), and meet all of the requirements of RCW § 18.27.114.

Notice of Completion

Not applicable.

Title

Washington uses ALTA title commitments that allow for the Construction Loan Update Endorsement, which is used when the lender requests endorsements as additional disbursements are made. It gives coverage up to the new outstanding mortgage balance and shows whether any other instruments have been filed and recorded since the last title update. The endorsement also insures the priority of the insured mortgage over instruments that are not specifically listed in the endorsement. Since the title company has a stake in the disbursements, you may find that they exercise some due diligence relating to construction draws.