Episode Transcript
Speaker 1 00:00:12 Welcome to the quick getting spruce podcast, where we talk about everything related to contractors, construction, and information to help you run better businesses. Hey guys, and welcome back to the quick getting screwed podcast for what we talk about all the ways not to get screwed in the construction industry. But today we have another episode dealing with all the lien rights in all 50 states, so that you can really understand, uh, you know, how to gain leverage in your products on getting paid on time. Uh, so we have a repeat guest who's already talked about, went in thoroughly and dived in on Utah, but today we have Jason Robinson back dive into Wyoming. How are you today? Jason?
Speaker 3 00:00:51 Great. Thank you, Carolyn. Thank you for having me back on the show,
Speaker 1 00:00:55 Not a province. So for everybody who didn't listen to the Utah one, it gives a little background about yourself, how you got into the industry, uh, how, you know, how much he loved construction and the law at the same time.
Speaker 3 00:01:04 Yeah. Yeah. Thank you. So my name again is Jason Robinson. I am a shareholder at the law firm at Babcock Scott and salt lake city, Utah. I'm actually licensed to practice law in Utah, as well as in the state of Wyoming. And I have coming up on about 25 years now of construction law experience, primarily representing, uh, contractors, subcontractors and suppliers with really an emphasis on helping folks to get paid, uh, like yourself. Carolyn, I, I filed a lot of mechanics liens. I make a lot of payment bond claims, a lot of breach of contract claims in an effort to get folks paid. I actually, uh, grew up in the construction industry. So I have a, I have a passion for the industry that the members of the construction industry and really a passion and desire to help people get paid for, for their services, their labor, their materials, and their equipment.
Speaker 1 00:01:59 Very cool. So with that perspective, do you represent a lot of general contractors?
Speaker 3 00:02:04 Quiet, quite a few general contractors. Yes. Yeah.
Speaker 1 00:02:08 That's very cool. All right. So let's go ahead and dive in into the particular states of Wyoming. So in Wyoming, do you have to be a licensed contractor?
Speaker 3 00:02:17 And the answer is no, uh, you know, Wyoming, actually the state of Wyoming does not require that contractors be licensed, but I have found that cities and counties oftentimes have their own contractor licensing requirements, but there is not a requirement that a contractor or subcontractor be licensed to file a mechanic's lien.
Speaker 1 00:02:40 Awesome. Um, so, so who in Wyoming has lien rights? What type of
Speaker 3 00:02:44 That is a great question. So it's a, it's actually very broad. Okay. So every contractor and the definition in Wyoming of contractor also includes architects, professional engineers and surveyors. And then of course we have subcontractors and material, men who furnish and under Wyoming, my furnish includes selling and renting a materials, equipment, labor services, all those folks who furnish services, labor materials, and equipment for the improvement of real property would have lien rights.
Speaker 1 00:03:17 Okay. So is Wyoming in general complicated or simple like Utah, Utah? It was relatively simple.
Speaker 3 00:03:23 Yeah. Utah with the state construction registry is pretty simple. I would see that Wyoming is also fairly simple, a little more traditional, uh, but I would say pretty simple as well.
Speaker 1 00:03:35 So do they, does Wyoming have it like a state registry like Utah?
Speaker 3 00:03:39 So Wyoming does not have an online state construction registry like Utah, the way, the way it works in Wyoming, you have the preliminary notice. You have the notice of intent to lien. You have the actual lien that gets filed the lien claimant's required to send a copy to the owner and then file a foreclosure action. And of course, uh, once, once the contractor subcontractor supplier is paid, then of course there's an obligation to release the lien.
Speaker 1 00:04:06 Okay. So let's drill down a little bit first off. Is there any difference in the timelines for liens based on the type of project, like a homestead or residential project or is it the same for all projects?
Speaker 3 00:04:17 So it's the same, it's the same for all projects. It differs depending upon the lien claimant. Okay. But there is no distinction in terms of type of project. Okay.
Speaker 1 00:04:25 Okay. So then let's start for like, um, let's start at the lowest, the lowest person in the chain, which is like the sub, the sub sub or the material supplier. What are, what are they, what is their first steps required to have a valid lane?
Speaker 3 00:04:38 So the first step in a Wyoming law is to actually send a preliminary notice. Okay. So the subcontractor or the material men, and I'll use material men and supplier interchangeably, but the subcontractor or supplier actually sends a copy of, uh, sends a preliminary notice to the owner with a copy to the contractor within 30 days after first providing services or materials for the project.
Speaker 1 00:05:06 So within 30 days of first work, they got to send it
Speaker 3 00:05:09 In 30 days of first work.
Speaker 1 00:05:11 And then what generally does this preliminary notice say,
Speaker 3 00:05:16 Well, that's a great question. Carolyn, there's actually a form, a Wyoming, surprisingly enough, given the relatively small population in the state, if you will, has a number of statutory forms. Okay. So there's actually a statutory form in Wyoming for preliminary notices. And I, and I will mention this for the benefit of your listeners. I actually put together a website a while ago, that's Wyoming lien, law.com. And on that website, I have all of these forms. And so if, uh, if your readers are interested in these Wyoming statutory forms, they can find them there. So looking at, and I'm actually clicking on my, what is that? You're looking at the Wyoming, um, forum. You really have really have two aspects. You have the preliminary notice itself, which again is a form that gets filled out. It includes a description of the materials that are furnished with the work that's performed. You're required to include a property description, the address of the project. And this becomes sometimes the complicated part is a legal description. You're actually required to have a legal description for the project property as part of your preliminary notes. Yeah, but Wyoming is really good is in that the county has each of the county recorders, pretty, at least in my experience to have a good property search engine where you can go in and search for that property legal description and track that down.
Speaker 1 00:06:41 So let me ask you the, at the county recorder, do you, do you like put in the address and it'll pull up the legal, or what would that search look like when you got to the county recorder's office? How would you search that?
Speaker 3 00:06:51 Good question? So each county is a little different. Some of the counties subscribed to the same map server system, but typically what I do is go in and type in the address for the project property. And that will pull up the project property legal description. And I have also found in the state of Wyoming that people are just wonderful to work with the county clerks, uh, the assessor's office. And so I have found that if I can't find a property legal description or parcel tax ID number online, I'll pick up the phone and call those folks. And they, at least in my experience been very helpful.
Speaker 1 00:07:29 Yeah. And that's kind of what we have. Uh, well, the people here are not so helpful. Cause then we're entirely too big. But, and, and so, you know, you're, you're, you're left to your own devices to search and ours, our tax records, right. You go and try to search by address and find it. Um, and you can get really creative now that, oh my gosh, Google maps. And then all of the, so ours is done through the, you know, the taxing authority and the taxing authority used to be, you'd have to have like a key map almost to look at, and now they have Google earth images. So you can literally with, with the, with the, with the account number on it. So you can literally, if you can't find it, you can pull up that map and kind of map it out where you think it will be just amazing.
Speaker 3 00:08:10 Yeah. The tech, the technology is amazing. Now the other interesting part about the Wyoming preliminary notice is that in addition to the preliminary notice form itself, now you're also required to furnish the owner with a lien waiver. And again, it's a statutory lien waiver. And I believe that Wyoming is one of, only about a dozen states that has a statutory lien waiver form. Yeah. And I would mention this, that the lien waiver form is an unconditional waiver, meaning that if the subcontractor supplier contractor actually signs this lien waiver, they are making the representation that they have received payment in full. So I think it's really important for a contractor subcontractor suppliers to know that if they are signing this Wyoming statutory lien waiver, they need to make sure that they have received payment upfront. And if they have not, then they opt to revise the lien waiver to make it an unconditionally.
Speaker 1 00:09:11 Absolutely. And so, you know, we have an interesting story here in Texas on that M a, which is we now have statutory and there's four of them, you know, unconditional, conditional on progress, unconditional on progress, conditional on final, on conditional and final. And the reason why they did that is because before then it was like the wild, wild west and in a lean way waiver you'd like waive all these rights you weren't intending to, or never meant to. But if you sign the it unconditional, that is, you know, it'll be held against you. And you said that you said that the supplier has to provide this to the owner at the while they're in their preliminary notice or when they've been paid. Is there a timing on that?
Speaker 3 00:09:47 It's a, it's part of the preliminary notice. So it's really a package that the preliminary notice the Wyoming statutory preliminary notice form also includes the lien waiver
Speaker 1 00:09:57 Form at that point it's blank. Okay. So you're sending a blank saying that once I've been paid, I'll sign this kind of thing.
Speaker 3 00:10:05 Well, yeah. And what it does, it puts the owner on notice that before making payments, the owner has the right to use this lean way report. Hey, before I, before I make final payment to you general contractor, I'm going to require that you get lien waivers from your subcontractors and suppliers. So really I think really it's a matter of education. There are so many owners out there who aren't familiar with lean waivers, they aren't familiar with joint checks. They are familiar with these. These means that you and I, as construction attorneys knew about for making certain that folks get paid. So I think that this is Wyoming's idea or effort to educate owners about the process and that there is a lien waiver leave.
Speaker 1 00:10:45 Yeah. And that they can make sure that, that it is kind of their responsibility before they issue payment to make sure everybody else has been paid first.
Speaker 3 00:10:52 Right. Exactly. Because as we all know, you know, with a mechanics lien, it's, it's a very powerful tool that can get contractors, subcontractors and suppliers paid, but sometimes at the expense of an order paying twice.
Speaker 1 00:11:04 Absolutely. And that's what we're trying to prevent that with all the notices. Okay. So the 30 day preliminary notice is, is that the same for everybody, regardless of if your subcontractor, regardless of your place in the chain, on the construction food chain kind of like up and down?
Speaker 3 00:11:20 No. No. So it actually differs for the prime contractor.
Speaker 3 00:11:23 So if you're a subcontractor or supplier, okay, you're required to send your preliminary notice within 30 days of your first date of work. Okay. It goes to the owner copied of the contractor. Now, if you're, if you're the contractor, the prime contractor, it's different. Okay. And this is really key that the prime contractor is actually required to send its preliminary notice to the owner before receiving any payment from the owner, including advances. And that, and that's important because I've seen a time where a general contractor, uh, is starting to perform work and they received this advance from the owner. So they can go out and purchase materials and whatnot. And lo and behold, they missed their deadline because the contractor is required to file required to send that preliminary notice to the owner before receiving any payment, including advances. And so what I, I will sometimes recommend to a contractor client, a general contractor client, is that they include the preliminary notice in the contract itself as part of the contract document.
Speaker 1 00:12:26 That was my next question. Could you include it in the contract? And then, so they signed the, so what about this? What if they signed that contract? And then the same day they give you the deposit check?
Speaker 3 00:12:37 I think, I think as long as you deliver the contract to the owner, that includes the preliminary notice prior to prior in time to receiving that advance, then I think you're good.
Speaker 1 00:12:51 Okay. Got it. That would be my question. Okay. So they gotta do it before they receive any money before they start working. Okay. So then what is the next step? And filing a valid lien. And we can go back to the subs and the subs and material suppliers.
Speaker 3 00:13:04 Perfect. So the next, the next step is actually to send a notice of intent to leave. So again, we want to see contractors, subcontractors and suppliers paid, but the Wyoming legislature also recognizes that this could require an order to pay twice. So in an effort to, to balance this, uh, balance, owner's not paying twice and contractors, subcontractors, and suppliers not going on paid the youth of the Wyoming legislature has created these notice requirements. So the second one after the preliminary notice is the notice of intent to leave. And the rule here is 20 days. So contractors, subcontractors, material men are required to send a notice of intent to lien to the property owner within 20, no later than 20 days before filing their lien statement. So it's no later than 20 days before filing a lien against the project property.
Speaker 1 00:14:04 And that's that's for the general contractor subcontractor that's for everybody.
Speaker 3 00:14:08 Yes. Across the board that applies to everyone.
Speaker 1 00:14:10 Okay. So then we need to talk about when is the timeframe for filing your lien? When is the deadline for that?
Speaker 3 00:14:17 Yeah. You hit the nail on the head again, Carolyn, because of course a that there's a big problem. There I'll have folks who will call me up on the phone and say, Hey, Jason, I need to file a lien. I'm coming up on my lien, filing deadline. I only have 10 days and I'll ask the question, oh, well, what about your 20 day notice of intent to lien? Because under Wyoming law, you have to mail. You have to send that 20 day notice of intent to lien or your lien is invalid Boyd. And of course, will you have no lien rights? So that is definitely the next topic before we move there. Again, Wyoming has a, has a four has a notice of intent to lien form. And while Wyoming does exercise substantial compliance, I think the best practice is to stick as closely as you can to these Wyoming mean lean boards,
Speaker 1 00:15:08 Especially if they can get them on your website. Yeah,
Speaker 3 00:15:10 Absolutely. Yeah. Right there. And I hope people take advantage of those. So
Speaker 1 00:15:16 Let me ask you too, before we go any further, when we say notice is sent a certified mail, good, or do we need personal deliveries? Like the preliminary notice if it's, if we're not, if it's not in our contract and we have to send it to the owner and the general contractor who, how do we send that a certified mail? Okay. Or,
Speaker 3 00:15:30 Yeah, I do it. I send them by certified mail. I believe that I've always sent it by certified mail. I believe that hand delivery would work as long as there's some evidence that in fact it was delivered and I would, I would need to go back and look at the Wyoming statute, but I recall having seen something about email. So like, like I say, we would need to go back and look at that, but there may be, uh, it may be the case that those could be sent by email as well.
Speaker 1 00:15:56 Wow. That would be, that would be a huge jump for states to recognize that.
Speaker 3 00:16:02 But I think it's important to have proof that you sent it out and I like the certified mailing, because then you can keep that green card showing. Not only did I, did I send it, but it was received
Speaker 1 00:16:14 And you can track it on the U S P S website too. It's like, here's when the postal service, here's all the attempts they made. Here's what it was. Cause sometimes you don't always get the green card back or something like that. So you can still track it online, which is pretty nice.
Speaker 3 00:16:25 Exactly.
Speaker 1 00:16:26 Okay. So 20 days before we file a lien and the lien filing timelines.
Speaker 3 00:16:32 Yeah. So, and the lien filing timeline does vary depending upon where, whether you are a contractor, meaning the prime contractor or a subcontractor where material and the, and those are two categories. So you've got the contractor is one time, one timeframe, and then the subcontractors and material are another. So for contractors, they're required to file their lien statement with the county recorder where the property, the project property is located within 150 days on the earlier. So earlier of the last day of the last day, when work was performed or materials furnished under the, under the prime contract or the date of substantial completion of the project. So leave earlier are those two days.
Speaker 1 00:17:17 So the earlier of substantial completion or 150 days from last material supply. So like, so like the jobs abandoned, I guess if the product is not complete, you would go from that the last time any work was done 150 days from then.
Speaker 3 00:17:30 Yes, I understand.
Speaker 1 00:17:33 Okay. So, and then you got to back, you got to backdate that 20 days to then send your notice out before you file a lien.
Speaker 3 00:17:39 Exactly. Yeah. And that, I think that's the place that trips people up the most is that failure to send out the notice of intent leave.
Speaker 1 00:17:49 Okay. So now
Speaker 3 00:17:50 I will say, I will tell you this, just by way of footnote, I'm, I'm aware of one, one Wyoming Supreme court case where a lien claimant failed to send a notice of intent to lien and the owner. It was either the contractor or owner failed to include as an affirmative defense, the notice of intent to file the notice of intent to file lien. And my recollection is that the Wyoming court said, uh, let it go in favor of the lien claimant, seeing that the owner had weaved that a notice of intent to file main requirement.
Speaker 1 00:18:27 Uh, we have something very similar here. It's basically you have to specifically deny whatever you think is invalid. And if you don't, then, then you waive it. So there are, I wouldn't rely on that to have a valid lien.
Speaker 3 00:18:40 Absolutely. Yeah. I, I, a hundred percent, I'm a hundred percent with you on that one. I just, I put it out there so that if, uh, if there's someone out there who, you know, is owed a lot of money and oh, no, I forgot to file the forgot to send the notice of intent to lien. There may be some hope out.
Speaker 1 00:18:56 Absolutely. So let's just do a streamline for prime contractors. They got to give the, the, the preliminary notice before they receive any money before they do any work, you could put it in the contract. Um, and then they have to, um, father lean within 150 days of last work, uh, or last material supplied or, um, or substantial completion, whichever comes first. And then they got to send their intently in 20 days before that. Okay. All right. I'm trying to keep it straight line so I can keep it straight in my mind. Okay. So now for the sub suppliers and subs, what is their lean timeline look for firing their lane?
Speaker 3 00:19:36 Yeah. So subcontractors and suppliers are required to file their lien within 120 days of the earlier, uh, the last day when work was performed or materials furnished under a contract, and that's the prime contract or the date of substantial completion of the project, or, and this one's key the last day, the subcontractor performed work at the direction of the contractor where other person authorized to provide direction under the current.
Speaker 1 00:20:09 Gotcha. So, okay. So the last day they provided stuff, they have 120 days from that timeline. And then, so that back it up, they got at a hundred days, they got to send their, their notice, their notice of intent to lien.
Speaker 3 00:20:22 Exactly. Yup. And here, and here's a question, you know, what we talked about substantial completion, what constitutes substantial completion. Right. So in Wyoming, there's actually kind of a cool thing where the owner can file a notice of substantial completion with the county recorder's office. And then the owner within five days of filing, the notice of substantial can send a copy of that out to the potential lien claimants. So to contractors, sub contractors, subcontractors suppliers, and that becomes the date of substantial completion for those folks who received, uh, received the notice. Okay.
Speaker 1 00:21:05 So then after they received, that would be for, for material suppliers and subcontractors would be 120 days from there. Yes. Okay. Gotcha. Or, or if they're 120 days became the 120 days after they finished was earlier, they need to follow that date.
Speaker 3 00:21:20 Yes, exactly. Yeah. It's the earlier of those three days.
Speaker 1 00:21:23 Okay. So now we've got the lean timelines good for each level on the contractor. How long are liens good for before they expire? You have to file suit on them to enforce them.
Speaker 3 00:21:35 Yeah. So the lean is good for 180 days.
Speaker 1 00:21:37 Okay. Really? That's pretty fast.
Speaker 3 00:21:40 Yeah, it is had before.
Speaker 1 00:21:43 Go
Speaker 3 00:21:43 Ahead. Before we get to that, uh, there is a notice of lien filed
Speaker 1 00:21:48 A notice of lien as well.
Speaker 3 00:21:50 Yep. Yeah. So within 30 days after filing the lien statement with the county recorder's office required to send a copy of that to the owner
Speaker 1 00:22:00 Within 30 days,
Speaker 3 00:22:02 It's not a, it doesn't affect the validity of the lien. The lien will still be valid if you get, and don't send the notice of filing lien, but I would, you know, I would strongly recommend sending it because oftentimes that's, that's
Speaker 1 00:22:15 Exactly as the notice is, is not actually filing the lien. Absolutely. Uh, and so, and that's, but if you, so if you're you're, if you're, um, a material, if you're a sub, you have to send it to the general and the owner, just the owner,
Speaker 3 00:22:29 You, uh, send it to the owner that the statute just provides the owner. I, you know, out of an abundance of caution or a know bill and suspenders, if you will, I would certainly copy the contractor on.
Speaker 1 00:22:43 Yeah, I agree. And I, you know, I think it, I think it's, like you said, even though you're not legally required to do it, but it would make you, I think it's more leveraged to get paid. The more people that know.
Speaker 3 00:22:53 Yes. Yeah. I agree.
Speaker 1 00:22:55 Okay. So w 180 days, and then you can, can you get it extended? You have to file suit. What happens after the 180 days?
Speaker 3 00:23:02 That's a great question. Yeah. Yeah. So, so the statutory deadline, you have 180 days to file the lien, but unlike, unlike Utah that we chatted about the other day in Wyoming, there actually is an extension. Okay. So if, if the owner and a contractor and any other parties to the contract, agree in writing, and I believe the agreement has to be notarized, if they agree in writing, then that lien filing dead time, deadline can be extended up to twice the time that you would normally have to file.
Speaker 1 00:23:34 Okay. So like, if they're trying to work through a settlement or whatever, that it wouldn't want to file suits, they can all agree to just extend the timeline, to give them more time.
Speaker 3 00:23:43 Exactly.
Speaker 1 00:23:44 Okay. If you have to file suit to enforce you lien, would you be entitled to get back your attorney's fees?
Speaker 3 00:23:50 Yes. Yeah. Keep, keep in mind that this is a, it's a, it's a double-edged sword. The prevailing party would be entitled to their fees. So it's important that contractors, subcontractors, suppliers cross all the T's dot all the I's so that they are in the best position to prevail and get that award of attorney.
Speaker 1 00:24:09 Absolutely. Because, um, if not, they're paying the other, side's like, if they miss the intent or if they did something wrong, we're on the hook to pay the other side's, which I've had happen to some of my clients. And it's, it's, it's a it's, uh, it's, it's, you know, really hard to swallow because number one, you weren't even paid for the work that you did. And then number two, now you had to pay me and then you had to pay them. It just so you know, it can be a very dangerous thing. I've seen it getting way blown out of proportion. So,
Speaker 3 00:24:35 Yeah, yeah, definitely best to avoid that Hope. Hopefully people are listening today and, uh, and getting this all down.
Speaker 1 00:24:43 Absolutely. And they can always contact you or reach out to your website if they have questions about how to do it correctly. So we make sure we don't miss anything.
Speaker 3 00:24:50 Yeah. Absolutely. People are always welcome to reach out. I'm happy to help educate these.
Speaker 1 00:24:54 So as far as material or suppliers, what is their burden for, to prove incorporation or delivery to have a valid blame,
Speaker 3 00:25:03 They would need to show that they're, uh, at least my understanding is that their materials were incorporated into the work because you're entitled to lean for the value of the improvement. Okay.
Speaker 3 00:25:14 Yeah. Now, now the question of can, can one lean for, let's say custom materials that were, that were, uh, created for a project, but maybe they weren't, maybe they haven't been delivered. Maybe they haven't been incorporated. Uh, candidly, I have not, I have not personally run into that issue in Wyoming so far. And so I haven't, I haven't researched that. My gut tells me that that to be lenal, it would need to be incorporated into the project. And I don't recall having run across any Wyoming law on that issue. So yeah. I'm not in a great position. A lot of that.
Speaker 1 00:25:55 No, no, no, not a problem. And I just usually, cause like, if you represent materials applies, the first thing I get here in Texas. Oh, that didn't go here. Uh, you can't lean for it. And so like for us, if we have signed delivery ticket tickets at some, that's some evidence that it did. And so we can go back and forth on that in some states it's actually just like, you gotta, you gotta be able to identify it. It was a corporator. You don't like Oklahoma's that way you don't have any.
Speaker 3 00:26:19 I have definitely, I have definitely run into that in Wyoming. And in fact, recently I had a lien foreclosure action that we settled with, uh, actually settled in mediation. But that became a big issue as my clients showing that we had, not that we had delivered materials and that the delivered that the materials were incorporated into the project. And so we had delivery tickets and we even had an expert who did a takeoff to, okay, based upon these as-built drawings, this is how much, you know, conduit will be required in the building, that kind of thing,
Speaker 1 00:26:52 The square footage, where he get into the nitty gritty, I've had those art, it gets very technical. When you get to that point about, you know, who, who else could you have ordered it from? How many screens, you know, how many square feet of, what are you supplied? Is it all there? Uh, so yeah. Um, so what about is a construction lender involved in the lean process at all?
Speaker 3 00:27:12 And I notice to the lien, uh, to the, uh, to the construction lender.
Speaker 1 00:27:18 Okay. All right. Can you have a lien on leash face?
Speaker 3 00:27:21 Yeah. So you, you can file a lien on leased space, but the situation is the lien typically attaches only to the tenants lease, hold interest in the property, unless in Wyoming, there are two times when it could attach to the owners interest in the property. The first is if the landlord agreed to pay the costs of the improvement. So if you, as a lien, claimant can show that the landlord agreed to actually pay for the cost of the improvement. That's one. And the other is if the improvements were specifically authorized by the landlord. Okay.
Speaker 1 00:27:56 Okay. Gotcha. Which, like I said, and, and the least case, I always filed the lien and asked for permission later. Cause I don't know what the lease says and I don't know who's paying for it because we had the same kind of rule here, but yeah, I think it's definitely worth it. And then we can always, if, if you think it's wrong, send me the lease and we can talk about it.
Speaker 3 00:28:14 Yeah. It is nice to get a copy of that lease agreement upfront, but sometimes either people won't give it to you or you're up against a deadline and you can't get it before, before your deadline to file a lien.
Speaker 1 00:28:27 Absolutely. Okay. So tell me about public works projects in Wyoming. What does that look like? Is the bond required? Can you have a lien on funds or what does it look like?
Speaker 3 00:28:36 There is a, there is a payment bond requirement for Wyoming, uh, state and local projects. And the threshold dollar limit is $150,000. So if there's a state or local public entity that contracts for a public project and the contract price exceeds $150,000, then the owner is required to obtain from the contractor, a payment bond for the protection of unpaid subcontractors and suppliers. Now, if, uh, if the contract price is less than $150,000, the, the state or local government entity can, can still require some type of some form of guarantee, uh, for the protection of subcontractors and suppliers. Now I would, I would point this out when we chatted about the Utah of the day. I mentioned that if the owner failed to obtain a payment bond, an unpaid subcontractor or supplier would have a claim directly against the owner, based upon it speeding to obtain a payment bond. That's not the case in Wyoming. So in Wyoming, if you have a public owner feels to obtain a payment bond, there is no recourse against that owner. So I think it's really important that subcontractors and suppliers determined early on upfront as part of their project, uh, maybe on their job sheet included a check. I checked the box on their report obtained copy of payment bond.
Speaker 1 00:30:07 Yeah. And that's the thing is that payment bond recorded anywhere is the only place they can get it from the general contractor and or a public information request. Yeah.
Speaker 3 00:30:15 I am not aware of that being recorded anywhere. I typically have obtained them either from the general contractor or more or more oftentimes from the owner Accurate they'll provide it. Yeah.
Speaker 1 00:30:27 Okay. All right. So, and then to have a successful claim against that bond, what kind of notices need to be sent or what kind of claims need to be made?
Speaker 3 00:30:35 Yeah. So this gets a little, this gets a little complicated. It's kind of fun. Um, not as complicated as Texas, But it is interesting. And let me, let me mention this first under, uh, under the Miller act, of course there is a remoteness limitations. Uh, you can be too remote, so it's not to have a claim against the payment bond. That that is not the case in Wyoming. Okay. On a public payment bond claim for a state or local construction project. There is no,
Speaker 1 00:31:06 I think the Miller act ends at, at S sub subs and material suppliers place three.
Speaker 3 00:31:12 Yeah. Yeah. So there is no remoteness issue on, on these payment bond, Queens on Wyoming state and local projects, but there is a preliminary notice requirement.
Speaker 1 00:31:23 Okay. Now what does that look like? Like timing and what does the document itself look like?
Speaker 3 00:31:28 Yeah. And this is one place where there is not a statutory court on the mechanics lien side. Wyoming has a, has a lien form for really every notice that we talked about, there is a statutory form that should be followed, but there is no form when it comes to the preliminary notice on a payment bond claim. But this, this is the way it works. So of course a general contractor will never have a payment bond plain because it's the general contractor as bond work. One, we're talking about subcontractors and suppliers here, but subcontractors and suppliers are required to send to the general contractor, their preliminary notice within 60 days after the date, the first furnished services were materials. So that, so that's the timeframe within 60 days after his first furnishing services, where materials now that there's an F here. So here here's the condition.
Speaker 3 00:32:23 Here's the big, if the preliminary notice is only required, if the contract price between the owner and the general contractor exceeds $150,000, that's the first one. And the second is the general contractor is actually required to post a sign in a prominent place. So a prominently placed sign on the job site that sites to the pertinent Wyoming statute and explains to subcontractors and suppliers that they are required to give the general contractor notice of a right to a right to protection under the bond or guarantee, and that if they feel to do so that they waived their claims under the bond or guaranteed. And so I have, this is a, you might, as you might imagine where there's a public project and the contract price between owner and general exceeds $150,000, but there was no sign out on the job site.
Speaker 1 00:33:28 So what does that mean?
Speaker 3 00:33:29 So if there's no sign on the job site, then the subcontractor or supplier is excused from sending the preliminary notice. Yeah. Now I, you know, of course I would, you know, my Microsoft, I'm sure I would err, on the side of always sending the preliminary notice because communication is key to getting paid. But if the subcontractor supplier finds themselves in a situation where, oh, no, I missed the deadline to send my preliminary notice. They should really ask two questions. First is the contract price between the owner and general contractor more than $150,000. If it's not, then they're excused from sending the preliminary notice. And number two, if the, uh, if the requisite, uh, signage was not posted on the job site, the are also excused for sending the preliminary notice.
Speaker 1 00:34:24 Very cool. Uh, and so, uh, and so what does the notice have to contain, I guess since there's not a state of prostate?
Speaker 3 00:34:32 Yeah. Yeah. So, so the Wyoming statute sets forth the requirements of the notice. And I also have these on my, the Wyoming lien law.com website, but the, the requirements are The, uh, the subcontractor or Materialman's name, address, phone number, and name of a contact person, then the name and address of the subcontractors or Materialman's vendors. So their, their customer and the type or description of materials or services provided. And so you would send that. I typically put, I have a form I put together, you know, like a preliminary notice form, and then I'll send a letter along with that, explaining that this is a notice of right to protection under the bond or the guaranteed.
Speaker 1 00:35:22 Gotcha. And it's not an actual claim yet. So then after they send that preliminary notice, is there any other steps that they have to do to perfect that bond claim or, um,
Speaker 3 00:35:30 So there, unlike the, on the mechanics lien side, there is no notice of intent requirement.
Speaker 1 00:35:35 Okay.
Speaker 3 00:35:36 So the next step after sending the preliminary notice would be to file suit.
Speaker 1 00:35:44 Okay.
Speaker 3 00:35:46 So here you're going to be suing, you're going to be suing on the assuming the bond. So typically what I'll do is name the surety. Who's furnished the bond and I will identify the bond number. And if I have a copy, I'll, I'll attach a copy of the, of the payment bond as an exhibit to the complaint.
Speaker 1 00:36:03 Gotcha. And which will automatically most likely bring in the general contractor anyways, cause it's their bond.
Speaker 3 00:36:09 Yes. Yeah. And typically I will name the general contractors as well. Yeah. Just to get her, getting everyone in there. Um, and the deadlines. So you have one year, uh, one year from final completion of the project to file the lawsuit. Okay. Now that, that begs the question. What does, what does final completion mean? Right. When, when does final completion occur? And this is, this is kind of cool in Wyoming. So under the Wyoming statute, the public entity is actually required to post the date of final completion for the project on the state procurement website. If it's, if it's a state project or on the local entities official website. Yeah. You can go on there and, and it's, it's pretty cool. You can go on the state to the Wyoming state procurement website and you can find when, uh, when final completion occurred on various projects,
Speaker 1 00:37:07 Does it say almost the same thing as like a notice of completion on the, on the private sector that an owner files just to basically, but they don't have to send it to the, the, the, the bond climates.
Speaker 3 00:37:18 Right. Right. In this case, the bond claimants have the obligation to reach out to the public owners to determine that date of final completion.
Speaker 1 00:37:25 Well, and obviously, like we said before, these are the deadlines. You can always do it earlier. Uh, which I highly recommend if you haven't been paid for a year, you probably should do something before that.
Speaker 3 00:37:36 Well, absolutely. I mean, it's a case of the early bird gets the worm and there are so as you know, there's so much truth to that. It's, it's so much easier for a general contractor to say, oh, I'm holding money on a subcontractor's contract. Cool. I can issue a joint check to you. Um, or something like that rather than waiting until the general contractor has paid out all the money and is now confronted with the possibility of paying twice.
Speaker 1 00:38:03 Absolutely. Uh, the more, you know, opening, it could be about the faster, the more likely you are to get paid. And then even in that situation that, you know, you know, working with the GC and they're not going to get pissed if they don't have to pay twice. Right. Um, and so, you know, uh, and just cashflow issues, money today is much more value than money in a year, especially when you've done the work already
Speaker 3 00:38:25 Kind of loses
Speaker 1 00:38:26 It, loses its value over time.
Speaker 3 00:38:28 Exactly.
Speaker 1 00:38:30 Ah, okay. So if you file suit to enforce a bond, could you get your fees too?
Speaker 3 00:38:36 I would, I would have to go back and look at the statute. My, my recollection is that attorney fees are allowed for a bond claim, but it's being long enough. I would need to go back and confirm that.
Speaker 1 00:38:49 Nope, Nope, no worries. No worries. Uh, I was just curious, um, just cause some states allow out some states don't and usually if they allow it on the lane, it's very common that it's allowed on the bond claim too. But, uh, we could definitely check for sure.
Speaker 3 00:39:04 Right.
Speaker 1 00:39:05 All right. So any other words of wisdom for our Wyoming contractor?
Speaker 3 00:39:09 I think, I think the key is notice, notice, notice, make sure to get those, you know, file the preliminary notice file, the notice of intent to lien. And then once you file the lien, send a copy of the lien to the owner, it's all about, it's all about effective notice and communication. And I have, I have learned over years, I'm sure like yourself, Carolyn, that, that, uh, by, by sending those notices, especially coming from, I think from an attorney's office, I think that tends to carry more weight, uh, by, by doing that oftentimes a client, uh, an unpaid contractor subcontractor supplier can actually get paid without having to actually file a lien file, a lawsuit And expense.
Speaker 1 00:39:54 No, and I, you know, like I have, I built into my collection process, phone calls too. So like, you know, we're a collection agency, we're a collection law firm. We're not just a lien filing service. So, you know, the end goal at me at the end of the day is not the file lien is to get you paid, which is a different perspective than a lot of those online lien filing services. Um, because at the end of the day, I don't want to file a lien. I want to collect your money, You know?
Speaker 3 00:40:19 Yeah. And I made on the attorney fees on the bond, like I said, we'd have to go back and look at that. I was just thinking attorney fees. Aren't provided for statutorily under a Miller act payment bond. Okay. That could be the same in,
Speaker 1 00:40:32 I couldn't remember if attorney's fees were under the Miller act. I believe you, that they're not federally allowed sounds about right. With the federal government, especially like they, they, they say that there's this Miller bond act, but they really have no obligation to make sure there actually is a bond. Um, you know, so
Speaker 3 00:40:47 Yeah. Yeah. I wrote, I wrote an article once it was entitled. It's Millrock time Now that was probably the best part of the
Speaker 1 00:40:56 Patient. You should get it. If it's still published out there, usually gives the link. We'll put it in the show notes because it's federal projects are another ballpark. I mean, 90 days from the last work, but, um, but still even to get a copy of it and whatnot. So. All right. Well, I appreciate you coming on the show again. I'm sure we'll have again, another topic on subcontracts or something else equally exciting for the construction industry, but thanks again for being here.
Speaker 3 00:41:21 I appreciate it.
Speaker 1 00:41:25 Thank you for listening to this episode of quick getting screwed. I hope you found it helpful if you like what you hear, please like us and follow our podcast. Do you want further information? So you can find us subcontractor institute.com. We're also on Facebook, LinkedIn and Instagram, and the book is available on Amazon tune in two weeks now for a new episode. Thank you.
