Episode 63: Learn Your Liens- Idaho! (With Wyatt Johnson)

Episode 63 November 07, 2022 00:44:24
Episode 63: Learn Your Liens- Idaho! (With Wyatt Johnson)
The Quit Getting Screwed Construction Podcast
Episode 63: Learn Your Liens- Idaho! (With Wyatt Johnson)

Nov 07 2022 | 00:44:24


Show Notes

No matter where you live, learning your local liens laws is an essential step to take when working in construction. One of the biggest issues we see on the legal side is folks losing out on their pay. That is why Karalynn brings in the best and brightest construction law professionals from each state to discuss the details of lien laws across the country. We're back with another lien episode, in which Karalynn is joined by Idaho lien specialist and construction attorney, Wyatt Johnson of Johnson May Law. Wyatt's years of experience practicing Idaho construction law, especially when it comes to collections, have equipped him with the skills needed to make ID's lien laws as easy to understand as possible. 

Together with Karalynn, Wyatt breaks down the rules and regulations of filing an acceptable lien in Idaho. There are some especially important details when it comes to sending notice, that he covers with great clarity. This episode is a thorough break down of all Idaho contractors need to know to protect their pay. If you like to learn and want to ensure you have all the tools needed to get paid what you are owed for your hard work, this episode is a winner. Listen in, Idaho construction workers! And don't forget to like the episode, subscribe to the podcast, and rate us!


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Episode Transcript

Speaker 1 00:00:11 This is Carolyn ing. Welcome to the Quick Getting Screwed podcast, where we talk about everything related to contractors, the construction and information to help you run better businesses. Hey guys, this is Carolyn Krok, and welcome back to the Quickening Screwed Podcast, where we talk about all the ways not to get screwed in the construction industry. Well, you know, liens are a big way to protect your money and to make sure that you don't get screwed. And so, as you know, we're doing a series about liens in all 50 states, and today we're covering the state of Idaho. Um, so today we have Wyatt Johnson, who's licensed in Idaho and knows all about liens in Idaho. How are you today, Wyatt? Speaker 2 00:00:49 I'm great. How are you doing? Speaker 1 00:00:51 Oh, good. Thank you so much for being on the show. I appreciate you taking the time. Speaker 2 00:00:54 You bet. Speaker 1 00:00:55 Hey, so okay, before we jump into all things leans in Idaho, tell us a little bit of background about yourself, how you, you know, how you got, why you went to law school, how you got to construction law, all of the good things. Speaker 2 00:01:06 Sure, sure. Oh, I've been, uh, uh, God, I've been practicing about 25 years now, I guess. And, uh, I went to law school over in Oregon, uh, as a school over there, Lewis and Clark. And, and, uh, um, it was a great experience, but I ended up, uh, starting out my practice over here in Idaho and I'd grown up here. I'd moved away in, in, uh, well in high school with my parents and, and was gone from college. But, uh, uh, they were back and, and my wife, uh, who'd grown up in Seattle, came out and visited one summer and just absolutely love the hot dry summers <laugh>. And, and so we moved here. It's, uh, it's an easy place to live and, uh, you just, you just start your practice from there. Um, and, and like anything, uh, you start out and, uh, you, you start, your practice builds you more than you build a practice, I think. Speaker 2 00:02:03 And we started, uh, here. I had, uh, a job at another law firm for a little while, and then I, then I, uh, uh, went to work with my first partner 2020 some years ago. And, uh, mostly we just did what, uh, what came to the door when we were getting started. And, uh, my partner had is a real estate license. And so we got a lot of real estate stuff. And, and that of course transitioned into a lot of construction, uh, type work. Uh, the I Idaho market's not so huge that you super specialize. So, uh, necessarily you, you, you'd do a lot of things. And, and one of the things that there's a lot of work in is, is construction and, uh, uh, we got really up to speed on it, uh, in the downturn back in 2000 6, 7, 8. Yeah. And for years after there, that unwinding that, um, did, did a lot of it, uh, on, uh, um, there was a resort here, Tamarac Resort. Speaker 2 00:03:05 Uh, it was a big ski resort that, that was still probably my biggest case date. I represented the owner that he, he was my personal contractor and that contact or client, and that was, uh, that was about three years of my life. And, and basically any way that you could have a construction job go bad <laugh>, we pretty much <laugh>, uh, you know, it was, it was a lot of learning experience and, and, uh, uh, now we have a, a good, uh, whole medium size firm, uh, for this, uh, for this state. But we've got 13 attorneys and Wow, that's a lot. We're, uh, relatively full service. We're not as big as some of the, um, uh, nowhere near as big as, as, uh, some firms in other markets. But, uh, for the I market, it's a, it's a pretty healthy size. Awesome. Speaker 1 00:03:55 So yeah, That's good. That's an interesting, interesting background too. Like, you know, I think it's similar that a lot of people end up there. You just turns out you, you're good at it and you keep doing it. <laugh> you keep learning. Um, alright. So in Idaho, do you have to be a licensed contractor in Idaho? Speaker 2 00:04:12 Well, depends on what you're doing. Um, like, uh, public works, if somebody's a public works contractor Yes. Any, anything sort of a public works, they're, they're serious about that. Gotcha. Um, if it's a, a professional trade, I mean, certainly, uh, engineers, uh, architects, surveyors, um, those are the easy ones. Um, plumbers, hvac, electricians, tho those all, uh, require licensing. Once you get outside of that, um, we have what's called registration. Okay. And, um, registration is kind of licensing light. Um, it, it, it was, it's sort of a compromise type bill. It came into effect, oh, I don't know, in the last half dozen years or so. And it was responding to pressures that, that, uh, wanted to have some sort of contractor licensing, but an awful lot of lobbying pushback that really didn't. So registration basically requires that you not be a felon. Okay. Uh, you have to have, um, insurance, you basically have to show that you got work comp and, um, commercial general liability insurance. Speaker 2 00:05:38 And that's, that's about it got, I mean, a heartbeat. Um, there's, there's really not much of a, uh, standard for it. Gotcha. It, it's, so it doesn't do much, it doesn't require much for people. Um, it can, uh, it does have teeth though, if you don't do it. And the one, the one bit of teeth is if you don't go through the step of registering, um, you, uh, get denied your lean rights. Gotcha. And, and so it, it, it's really a speed bump, something to pay attention, do something to be aware of, um, but really not onerous. And it, and it doesn't, it doesn't demand a lot of people. Speaker 1 00:06:23 Gotcha. So if you start working and you don't have your license and you go wanna file lean and then you go get it, does it work retroactively or only for jobs going forward? Speaker 2 00:06:34 It only, it only goes into effect from the time that you actually have your registration. Gotcha. And, uh, um, and even if you're licensed in another jurisdiction, you know, if, if you're licensed in another jurisdiction, uh, it doesn't, it doesn't roll over there. There's a case here that had to do with an architect specifically who really licensed architect in different jurisdictions, started working here, got the license later, and the court didn't allow any of the, uh, uh, didn't allow any lean Right. For the work that occurred prior to the state, uh, licensure. I think it would apply the same for, uh, registration. So it, it's, it's painless. It doesn't require a lot, uh, just get in and do it. I mean, it, it is, it's just about you. You just fill out a form and not be a felon and you pretty much got it. Speaker 1 00:07:25 That's good. Do they, so like, can somebody file dispute with a licensing board or they don't handle things like that? Speaker 2 00:07:32 They got, um, they, they've got some, uh, disciplinary op operation there. It's not very active and it's not very consequential and it doesn't, and it doesn't do much. So it, it, it's, like I said, the registration, it, it, it's not serious certainly in the trades. Right. You know, electricians and plumbers, you know, the trades that have skills. Um, well, that's, that's not correct. The, the trades, the trades that are, that are well established are certainly a different, um, a different animal, Speaker 1 00:08:09 A different standard. Okay. So who has lean rights in Idaho? Speaker 2 00:08:17 Anybody who, uh, really does anything to touch the land? We've got a, we've got a pretty old lean statute because you, when, when IDO was formed, uh, it was mostly mining Gotcha. Was, was what it, uh, had to do. So, um, uh, your lean rights or engineers, surveyors, architects, um, direct suppliers or, or direct contractors, subcontractors, whether or not they've got a direct contract with the, the owner and material suppliers and material suppliers in Idaho would include somebody who, uh, is renting equipment. Gotcha. So a construction, rental, uh, company would, would, um, be included in that. Gotcha. Speaker 1 00:09:03 I'm sorry, is there anybody that's too remote down the chain or No? Speaker 2 00:09:08 Yeah. You've got, um, for material suppliers and, and rental equipment, you got a bit of, um, a catch there when you supply the materials or, uh, provide the rental equipment. The, the standard is that it has to be intended to be incorporated into certain premises. Okay. You've got a body of case law here that where, uh, you got a contractor that's just operating on an open account uhhuh without any sort of reference to, um, uh, any specific property that will be too remote, um, in order to, uh, claim a lie. Speaker 1 00:09:51 Gotcha. But if he has got, like, signed delivery tickets for this particular project that you have enough for intent Speaker 2 00:09:58 Mo, and, and most of, most of what the suppliers do is that they usually on their, on their order form, they, they ask you to, to put the address of the place that you're, that you're gonna be, um, using the materials, uh, or using the equipment. Um, most not all. Um, the good, the, the nice, uh, thing though, as far as the suppliers are, are concerned is, uh, in I Idaho, it's the intent, the intent that the, the product be incorporated is the trigger mm-hmm. <affirmative>, uh, whether or not it ultimately gets incorporated, that, that, that's, uh, that isn't a, uh, isn't a problem that you have to worry about just so as long as you got a good record that it was gonna be, that it was supposed to be used on a given property. Speaker 1 00:10:43 And that's one of the things that varies so much state to states like Texas would kind of have the same thing. Um, it's pretty much established unless they can conclusively prove it was just used somebody else. But like most other states, you have to prove it was actually used there. Um mm-hmm. <affirmative>, you know, I, I'm kind of partial to material suppliers, so it's, it's impossible for the material supplier to follow the material once it leaves, you know what I'm saying? If they, if they come pick it up. So I Speaker 2 00:11:07 Think it's, Yeah. Well, it solves the problem of Yeah, it solves the problem, especially on volume builders where God knows where this stuff, they, they get a shipment and, and they use it wherever they need it at the, at the given time. Exactly. You know? Speaker 1 00:11:21 Okay. So for lean rights, is there any difference in the steps that contractors have to take for residential projects or commercial projects? Are they all the same for everybody? Speaker 2 00:11:30 No, no. It, it's, uh, we have disclosure issues that arise between, um, residential and commercial projects. But in terms of the liens, uh, no, no, The, the liens are, um, the liens are the same, uh, regardless of the project. Gotcha. It's in Idaho. Mm-hmm. <affirmative>, you don't have to do any sort of pre-filing or pre notice or, or, or anything along those lines like jurisdictions. Okay. Your lean rights, uh, accrue as soon as you start doing work on, on the project, and it gets even, uh, where you don't, aren't physically on the project, say, I mean the, the ones that are more difficult, engineers and surveyors mm-hmm. <affirmative>, you know, they, they, they, they, they, they have their, uh, their, their, I, I guess they're hidden work, if you will. I mean, you can't really tell from looking, they're not, they've doing work. Um, but as soon as they're doing that work, tho those lean rights, um, those lean rights start accruing the trick. Speaker 2 00:12:38 And the one that you've got, the, the, the two things that you've gotta do are one within 90 days of the last day of work, Okay. 90 days of the last day of work, whoever is that has the lane Right. Has to record a notice of claim of lien, uh, in the real property records. And that notice has to be served in a very specific statutory way. Okay. And the notice form is not complicated, uh, but it's got some very specific statutory requirements. Uh, it has, uh, one of the most important is that it's got to be acknowledged. And, uh, if the biggest, uh, mistake that I see a lot of people do is they go online and they grab an online form and they take it down and re and and record it, most of those are wrong. Yeah. Most of them are wrong. Speaker 2 00:13:42 And it's super cheap to go into a lawyer and get a valid lie form because, um, the court, I know courts have taken a strict view of the notice of claim of lien. And if it's not, if the form isn't correct, and if it's not properly served, the uh, you fail to perfect your lien and once you get past the 90 days, there's no cure. Yeah. There's, Or fix it <laugh>. Yeah. It, it is a, uh, a bright line rule that's a product of, uh, <laugh> that is a, is a product of a, of a case that had to do with a glass contractor that, or a, a glass supplier that, um, was doing work on a lawyer's house. And the lawyers is, uh, he works three floors up from me here, and he's a friend of mine. And he was feeling, and, and he, he, he, he took that contractor to task and, um, gave our court the opportunity to look at it and say, Yep, uh, strict compliance is required. Speaker 2 00:14:47 It's not hard to comply, but the devil is in the details and close won't get you there. Gotcha. Second thing that you've gotta do, once you get that recorded, you have six months from the date of that that, uh, recording in order to file suit to foreclose that lean, otherwise it expires. Gotcha. So you gotta, you gotta, um, pursue that or not. Um, within that, that, that six months, uh, doesn't matter if it's on a commercial job, doesn't matter if it's on residential job, doesn't matter if it's big or little. Um, the 90 days and six months are unforgiving. The hard part, um, can be on that 90 days when the last day of work is. Yeah. And that one's, that one's a little bit case specific. Um, it's unfortunately that one's a little bit more or less, you know, it when you see it, uh, type of, uh, Speaker 1 00:15:55 Could it be punch list items or is it like substantial completion or a hundred percent complete? Speaker 2 00:16:00 Yeah. See, it's not quite substantial completion. And, and here, here's, here's the test that the court uses is that, uh, trivial work will not, um, will not extend your 90 days. So what does that mean? Well, if an electrician sends out a guy to throw on, um, a, a a switch, uh, a switch plate, you know. Gotcha. And, and they, they've done stuff like that. I mean, if it's, if it's something where you get a court quarter depending on a jury, whoever get your finder fact deciding Yeah. That, that was really just kind of incidental and not really part of the work. You're like, you're likely to get, um, uh, caught on that. Um, better off to just get out there and get the, the notice of lean. And I know that, I know that people don't wanna do that and they, they hang off cuz they wanna preserve relationships. But, uh, and go ahead. Speaker 1 00:17:00 90 days is 90, you know, is, this is a long time. So tell me about this, uh, particular service requirement once you file a lie. Speaker 2 00:17:07 Okay. The service requirement, it, it, it's, it's stupid <laugh>. It, it actually requires that it be mailed certified mail within five days of the recording. Gotcha. And, and, uh, the thing is it's, you see people all the time and they don't serve it, or they'll send it regular mail. A lot of times, a lot of out-of-state folks get popped is they send it, uh, they send it regular mail. Gotcha. And you can't, you, if, if you're at, if you're doing this at day 90, you go out and you get it recorded and you buy some miracle get, get the right stuff in, in the form mm-hmm. <affirmative>, and then you send it regular mail, it's void, Speaker 1 00:18:02 Now you're screwed. Yeah. It's, it's, any little thing, any little thing, it's done. Speaker 2 00:18:06 It's just done. And, and it's so easy. It's, it's so inexpensive to do these. I think we do these for, I think we do these for 250 bucks. Yeah. Just, you know, get us the stuff, do it done and, uh, it, it, it's so worth, uh, doing it right the first time. Um, and then something Speaker 1 00:18:25 About disclosure for residential projects. Speaker 2 00:18:28 Yep. What, All right. And, and you do have to, uh, get into disclosures. The disclosures are not going to blow your lie rights, but between residential and commercial jobs, and they define that as basically anything that's a fourplex or smaller for residential. Okay. Gotcha. So single family home, duplex, triplex, fourplex, um, on those, the, the contractors, if, if the job is over 2000 bucks and this is for remodel, new construction, whatever mm-hmm. <affirmative>, um, four starting work, contractors got to give a, a disclosure in their, it's, it's a statutory list of half a dozen items. They basically come down to, uh, notifying the person that they've got a right to obtain lie waivers, uh, notifying that they have a right to get proof of commercial general liability insurance. Um, that, uh, the purchaser has a right to purchase, uh, expanded coverage, uh, title insurance to cover for liens. Speaker 2 00:19:36 Gotcha. And, um, uh, that the, the customer has the right at their expense, um, to require, uh, the contractor to get a bond for, uh, to cover the amount of, um, the anticipated work. Um, it's, it's, it's a little thing and it probably amounts more to paperwork and nuisance for most customers than anything. But here's, here's where they throw the teeth in it is if the contractor doesn't do that, what it allows for is it, it that can become a violation under the, our Consumer Protection Act. Gotcha. Which can be a thousand dollars penalty or, um, uh, uh, actual damages, which I haven't seen, I haven't come across a case where any sort of actual damages have actually been proven up from that failure to give the disclosure. Uh, there's a second part of it too, is when, when they finish the work, when you, when you finish the work or, or before the final payment, um, you gotta give, uh, a list of any of your contractors or suppliers who have worked on the job, who have provided more than $500 worth of, uh, labor materials. Speaker 2 00:20:58 Gotcha. And you gotta give their contact information. And it, it's, Myers are entitled to call 'em up and check and see if, uh, people have been paying their bills. Um, again, Consumer Protection Act violations, that one doesn't affect your lie rights. And the worst case scenario is if you, if you're in a situation where, uh, you, you've got a payment fight, and I think that I, I'm, uh, I've come across this on, on a couple of occasions, sometimes you just shrug your shoulders and you, and you just eat it. You're like, whoops. Yeah. You know? Okay. So our, our bill is reduced by a thousand bucks. Um, now, now we please like the other, you know, 46 Speaker 1 00:21:38 Bucks or whatever. Yeah. Right. Um, question, some states have this under the consumer protection. Right. Some state, a three day right to cancel. Do you have that night o on, at least on the residential side? I know I didn't ask this question, sorry. Speaker 2 00:21:53 Yeah. You know what? It, it, it's, uh, um, I, I am almost positive and I'd have to double check it, but I'm almost positive that that doesn't exist. Uh, the only place that I'm aware of a, a, a writer precision is in purchase. Um, there's a residential, um, residential home sales. There's a, a disclosure form that has a three day writer precision. Gotcha. Now that there, there's not a cooling off period that I'm, uh, uh, that I've come across here. Okay. If, if, if there is, it's pretty obscure and nobody ever brings it up. All right. Speaker 1 00:22:31 Good deal. Cause I'm sure that'd be one of the defenses, the payment you saw a lot if somebody didn't have it, Speaker 2 00:22:36 <laugh>. Yeah. No, you're not gonna, Yeah. Three day cooling off. And, and the big thing on, on, on the, we've got, um, pretty good law on unjust enrichment for contractors. I mean, we've got a pretty good no free lunch rule. So even if a contractor gets in there and screws it up, but they've delivered a benefit, um, you still don't get to get free work out of a contractor for nothing. And it, it's even where you've got the, the failure to, to license Uhhuh Right now, our Supreme Court doesn't get a lot of cases in any given year. You know, I mean, they, there's just, it's, it's not a big, it's not a big jurisdiction, so we don't, they don't get hammered and they, they've been able to avoid things. They left open a question as to whether the failure to be licensed or registered would prevent somebody from, uh, collecting on unjust Richmond. So far they've been able to sidestep that. Gotcha. Um, Speaker 1 00:23:47 Definitely no lie rights, but maybe on just enrichment. Speaker 2 00:23:50 Yeah, yeah. You know, you, you, you're not gonna be able to recover under contract. Uh, the reason that they, they killed your, your lie rights is, well, the statute kills the, the lie rights contract. They, they address it and they say you've gotta an illegal contract if you're doing something that you gotta be licensed, uh, for in, in, you're, you're not, not <laugh>. Um, but the unjust enrichment theory, they, they, they've left that open so far and they just haven't taken the opportunity to, um, close that question yet. Speaker 1 00:24:20 Gotcha. Okay. So you said liens are good for six months if you had to file suit to enforce to get your attorney's fees. Speaker 2 00:24:28 Yep. Yep. And, uh, up until this year, it was a one way statute really, um, Speaker 1 00:24:35 <laugh> Speaker 2 00:24:36 It, it was, uh, a one way statute. It used to be, um, pretty powerful for the, uh, the contractors. And remember, I mean, this was this, this was a statute that came out of the mining, um, uh, industry when, when the state was formed. And so, as you can imagine, I think that, uh, you had a lot of, you had a lot of little guys getting cheated, uh, in the back when, when this was formed. And so it was really aggressive, uh, for collection. And it was a one way, um, attorney fee provision said the attorney fees become part of the lie. So you go through, you prove the amount that's due, you do the cost bill and you foreclose that entire amount, um, against the land. Wow. Um, it's still works that way, except, uh, how it used to work was that, um, as long as the contractor and, and as long as the contractor required recovered some of what they claimed on their lie, uh, they had that entitlement to attorney fees. Speaker 2 00:25:44 And there were a, there, there were a number of guys that I think, uh, um, I think that they, they, they, they went too far. Uh, you know, and I think like with, with anything, uh, you push something too hard, too far, sooner or later there's gonna be a reaction. Mm-hmm. <affirmative>, and you had some of these guys that went in and, and, uh, what, what would happen, the, the typical scenario was, um, somebody in there who was, uh, substandard, uh, getting an argument with the owner and storm off the job and lean 'em for some outrageous amount and say, Yeah, you're gonna have to pay my attorney fees. And, you know, I mean, it was, it was just leverage. Well, gotcha. One of these guys finally did that to somebody who had powerful friends in the legislature. Yep. And they put an end to that. Speaker 2 00:26:43 So the effective this year, it has now become a prevailing party analysis. You still get, if you win, you still get your, your fees as part of the lie. But I think it gives the courts, um, a lot more latitude to address abuses where people file liens that are clearly unfounded. Yeah, exactly. If you go to court and, and you whiff on that, Yeah. Um, the court can come back. Interesting thing about that is it raises an interesting by doing that, I don't know that the legislature intended to do this, um, in residential work. Mm-hmm. <affirmative>, they've probably created a new, um, attorney, uh, attorney lie that didn't, or, uh, attorney fee claim that didn't exist before. Okay. In, in Idaho, our, our statute, uh, for attorney fees allows generally for attorney fees and commercial transactions and certain other, uh, transactions if it's, uh, personal or household is what they call it. Speaker 2 00:27:53 So this is gonna be most of your residential stuff. There's not a statutory Right. To attorney fees. And if you don't have a contract providing for attorney fees, I fees, um, there, it, it's your American role. It's that everybody pays their own. Gotcha. I think that you could have a situation where somebody say, goes and they do a, a handshake deal, um, on, uh, on a residential remodel or something like that, and they go in and they file a lien and, and that lien is substantially outta whack. That owner now potentially has a claim for attorney fees Yeah. That they would not have had before. Um, otherwise. So I think it's, I think it's a, uh, a warning. Um, it, it's, it's really a shot across the bow. I mean, I think for, uh, for legitimately lie claims, it, it doesn't make any difference. It's, um, it, it's gotten, it's gotten more punitive for people that are abusive. Gotcha. Speaker 1 00:29:00 Yeah. Um, can you have a lien on the lease hold, Speaker 2 00:29:04 Maybe Speaker 1 00:29:06 <laugh>? It depends. Speaker 2 00:29:08 Depends. Yeah. Here's here, here, here's where, uh, uh, here, here's where Idaho comes in on that. Um, generally a a lean is, uh, you have a lean, if you are doing work with, uh, the permission of the owner, either directly or indirectly, you don't need to get the owner to ask you to do it. Which is why subs have, uh, subs of course have lean rights mm-hmm. <affirmative>, and they may never talk to an owner. But, you know, even if it's a sub or sub sub, uh, the general has, uh, authority to get the work done. And the general basically that, that's an extension of the permission by agency. Gotcha. Tenants, just by virtue of being a tenant alone, doesn't necessarily give somebody, uh, the authority to hire somebody to do work on the property. It's gotta be, it's gotta be tendency plus. Okay. Um, so you gotta look at the facts and circumstances. Speaker 2 00:30:08 I don't know what it's, what it's like in, in other jurisdictions, but certainly most, um, no, I won't say that many commercial leases, uh, will be, um, will require the tenants to get certain work done on the property. So if what the tenant is requesting is within the scope of what they're supposed to be providing into the terms of their lease, then, then, then that's an extension of the, the permission by the landlord. Uh, even if it's outside of that, um, if you've got a landlord or an owner, landlord comes in somehow ratifies, uh, ratifies or, or stopped, you know, if they come in and, and, and I'm probably getting, uh, jargoning, but if you got the owner getting involved after the fact and recognize that they appreciate it and, uh, uh, take on the benefit affirmatively, you can probably get them. But you do have to be, you do have to be playing, um, uh, heads up. If you're, if you're going into a situation where it looks like whoever's requesting, requesting that you do the work is, is a tenant, um, before doing a lot of work, I, you might wanna be, um, get a copy Sure. About your payment, not talk landlord account on your lease. Yeah. Speaker 1 00:31:30 Okay. So tell me about Public Works in Idaho for like state projects. What does that look like? What has to be bonded? Speaker 2 00:31:37 Yep. Um, Public works, uh, pretty much the size. It's anything over, uh, $50,000. Any project over $50,000, you gotta, you've gotta get a, uh, the gen the, the main contractors got to post a bond up to, or it's gotta not less than 85% of the contract amount. Um, they, they get that bond, They, they post it and the v gets filed, uh, in the, in the office of whoever the, the public body is. That's, uh, bringing contract, Department of transportation, uh, who, whoever that might be, um, if somebody wants to get a look at it, if, if a contractor wants to get a, a look at it, all they need to do is they, they just provide an affidavit, uh, to the, the agency that where the bond is saying, uh, I've done labor or provided materials on this, and they'll provide a certified copy of the bond. Speaker 2 00:32:31 Cool. Um, the, uh, for Public Works contracting it, it's, I mean, a, everybody, everybody touching the public works has to be, um, ha has to be licensed and it's the Public Works licensing board. So you, you, you gotta, you gotta take care of that. Um, the, you know, and, and public works. Um, if it's public works, you, you, you can't lean it. Your recourse is the bond. Gotcha. And the trick on that is it's a little bit different, um, than, uh, the lean statute. If you've got a direct contract with the main public's works contract, the one that's posting bond, um, all, all that you need to do is if you're unpaid for 90 days, then that triggers your right. And you've got a year to come in and bring in action to, to do a claim on the bond. Gotcha. If you don't have a direct contract with the, um, the contractor posts the bond mm-hmm. Speaker 2 00:33:42 <affirmative>, if you're a sub sub contractor Gotcha. Within, within that 90 days, you need to make sure and get that general, you've gotta give them written notice. And, and, uh, it's is, again, one of those things, probably a good idea to step into a, uh, get a lawyer to go ahead and do up one of these. It's, they're not hard. Um, you gotta state with, uh, substantial accuracy the amount you claim, um, and the name of the person, uh, um, who you provided the work to, who, who it was that hired you to come on the job and what you did. Um, that notice, again, has to be sent by registered or certified mail to that general. Um, but the good part is that it can be to any office place of business or, or the residents of that, of that main contractor. So that's, that's the thing for somebody who doesn't have a direct contract with that, that, uh, that that general posted the bond, Would you, Speaker 1 00:34:46 Would you send it to the bond company too, even though you're not required to? Speaker 2 00:34:51 Why not? Yeah. <laugh>, you know, I, it, I don't, I don't see that it does any harm. Yeah. Good thing to get a look at the bond too. It's, it's, the statute says that you've got a year to file suit. Okay. Um, but take a look at the bond. I mean, if, if you blow it, don't give up hope. Um, there's at least one case that, that I know of where the bond said that, um, suit could be brought within two years. Ah, and Supreme Court said, Well, bond Trump the statute on that and, and, you know, and typical Idaho fashion, they just, you know, for no real reason other than they just decided they'd do it. Um, I, I wouldn't count on it, but, uh, it, it, it's, uh, you know, don't, uh, uh, don't go panicking if you blow that year, but awesome. Better, better to not be in that position in the first Speaker 1 00:35:48 Place. You don't have to be, uh, Okay. Is there any big thing that I missed as far as Idaho leans bond claims go, We to cut. Did we cover everything? Speaker 2 00:35:57 Oh, Speaker 1 00:36:01 Do you think it's important? I try to get all the things that I think from a, from a lean claimant position. Speaker 2 00:36:07 Yeah. Yeah. Um, yeah, there is priority date. This, this one is, um, this one's quirk in, I'm not sure how it compares to other jurisdictions, but, um, there, there is a whole priority date thing that you look at in, in terms of where, where your lane priority comes in when you've got everybody, When you, when you have the job that goes bad and everybody's fighting for a priority. Speaker 1 00:36:43 Okay. Speaker 2 00:36:45 And the most, the critical issue in Idaho is when your, uh, mortgage lender or de of trust when your lender recorded their lie. And here's why. Um, mechanics lean are gathered on a project and they're given equal priority by class is, is is what they get do. But whatever that may be, the most important question though is whether or not, um, that particular contractor, supplier did something on that project before the recorded mortgage or, uh, deed of trust. If they've done work before, then they get a priority date for all of their work that is before that mortgage, even though the, the work, uh, continued afterward. Now where they've gotten into fights is whether or not that works continuing on the same contract or not. And, uh, one of them that, that we sorted out here was where you had one guy doing, well, this is landscaping on the, on the Tamra and the facts laid out that did the first contract, the second contract, the third contract, and got paid for each of those tried to tack onto the priority, the date on the first contract. Speaker 2 00:38:20 And the court said, No, there was a break there. Gotcha. But, um, if you were before the mortgage lender, that that's great. Now, in that particular case, it wasn't really clear, but, um, as you can imagine, there were a lot of contractors and what they tried to do was tack on, um, the first, they, they tried to tack all of the lean claims that would be of the same class with anybody else of the same class who started to work before the date of the mortgage under the statute. It was a plausible argument under the statute. It, it was a plausible argument. And, and the trial judge really struggled with it. Um, and I remember that, um, because it, it, it was, it was a possible interpretation of the statute. Mm-hmm. <affirmative>, um, our Supreme Courts weighed in on that. They've said, Well, no, we don't think that it makes sense for people that did no work before the mortgage to be able to tack on and, and, uh, and, and ride and, and get in front of that mortgage. Speaker 2 00:39:44 They did less so on the language of the statute and more just because the statute wasn't clear enough one way or the other. And, and it's an old statute and they said, Well, this is just how we're gonna do it. Yeah. Um, so that's the important part. So of course, lenders get, um, nervous, uh, lenders will typically be really, um, uh, aggressive with any sort of projects, making sure nobody's doing any work or that they get the lean waivers or, or, uh, walk through that. Yeah. But, but certainly that case, there were a number of liens that did come in, in front of the, uh, on the construction lender on that case, and <laugh> Speaker 1 00:40:29 And Texas, if they, if you, if you have one that relates back, they all do. Speaker 2 00:40:33 They all do. Speaker 1 00:40:34 Yeah. In some state, there's a very, most all states have some form of relation back to that. Texas will try to try to teach a trial judge what all that means. Speaker 2 00:40:46 Well, they, you know, and they, they never have anything to do with it. It's, uh, interesting. We're, we're all this got, um, most of this in our case or in our state did get sorted out, uh, when that Tamarac project, uh, foreclosed, that, that had been one of the bigger projects here in, in the state in a long time. Mm-hmm. <affirmative> and it, it, it fell apart right. During the downturn in 2008, and it was up in Valley County. It was a small, uh, jurisdiction. You had one district court judge there, <laugh>. Um, so he got very well versed with, with Lean Law because he had a lot of it. Speaker 1 00:41:26 Yeah. And that's good to cause like normal, I mean, most of the judges you go in front of handle pi on a daily basis, you know, personal injury, but not construction of the lean law. I just, you know, especially in big counties, I feel such a disa, you know, disadvantage. I gotta like, tell 'em how the industry works, tell 'em how lean law works, and then Yeah. Its go. Speaker 2 00:41:44 Yeah. I, I've got, I've got one going up on appeal from a different county right now. It's exactly, Yeah. It was, uh, um, the judge and I have very different views of, uh, uh, of, uh, of, of mortgage law, Speaker 1 00:41:59 <laugh>, <laugh>. All right. Well, good deal. Well, if somebody wanted to reach out to you to find you, we'll put all in the show notes, but where can they reach out to you? Where can they find you? Speaker 2 00:42:07 Oh, oh, great. Hope they do. Um, my firm is, uh, Johnson May, and you can find our, uh, find us on the, on the web, uh, www johnson may law.com. And that, that, uh, that will get you there, our number, uh, 2 0 8 3 8 4 8 5 8 8. Um, me, I'm Wyatt Johnson, but I'm not the only one here. Uh, who does that? Uh, we, we've got, uh, plenty of folks, um, here who can take care of that. And, uh, uh, like I said, the, the easy stuff, uh, leans, uh, public work notices, uh, some of those easy early things mm-hmm. <affirmative>, it pays huge dividends to think about those things, uh, in advance. Speaker 1 00:43:00 Exactly. Speaker 2 00:43:01 Don't rely on those online forms. They, they, the ones for Idaho are almost always wrong. Speaker 1 00:43:09 I agree. All those online lean services have the same process for all the states and like every state is different. <laugh>. Yeah. Which is like <laugh> Speaker 2 00:43:17 And it, and it's Yeah. And, and, and it can be the difference. I mean, Well, and, and, and, and the thing is, you screw it up. I mean, if you, if you get it right, um, if you get it right and you got, uh, uh, an enforceable lie, uh, your chances of getting paid are, are, are pretty good. Speaker 1 00:43:37 Exactly. Speaker 2 00:43:38 If you screw it up and you've gotta go in there and pursue it on contract, it gets a lot more expensive to do. Speaker 1 00:43:45 I agree. Absolutely. So, all right. Thank you so much. Why, for taking the time, and I'm sure we'll have you on again to talk about another exciting construction law topic. Speaker 2 00:43:54 Sure. Okay. Hey, Carolyn, I really enjoyed it. Speaker 1 00:43:56 All right, thanks. 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. If you want further information, you can find [email protected]. We're also on Facebook, LinkedIn, and Instagram, and the book is available on Amazon. Thank you.

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