Delaware Mechanics' Lien Law
By Christopher M. Coggins, J.D., L.L.M. 1
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Introduction
Delaware's mechanics' lien law, 25 Del. C. § 2701
et seq., provides a remedy in the form of a lien for contractors, subcontractors, and materialmen who performed or furnished labor or material in or for the erection, alteration or repair of any structure.2 The purpose behind Delaware's mechanics' lien law is to allow those who performed labor and/or provided labor to obtain a lien against the subject property
before the adjudication of the obligation.3
Contract Required to Obtain Lien for Improvements to Land
Without a written contract with the owners of the land, a contractor, subcontractor, or materialman
will not be granted a lien where the improvements are solely to land and does involve a structure.4 Delaware's mechanics' lien statute defines "structure"
as including a building or house5 and requires that these structures be permanently situated or erected upon land.6 Further, the contract with the owner must set forth the names of all parties, a metes and bounds description of the land, a statement of the general character of the work to be done and total amount to be paid under the contract, as well as when and how such payments are to be paid.7
Contractor's Responsibility to Provide List
An owner may require any contractor or subcontractor who builds, repairs, or alters a structure to provide him with a complete and accurate written
list of all persons who have provided labor and/or materials related to the work performed on the structure and who may seek a lien.8 If the contractor or subcontractor fails to provide such list within ten (10) days of owner's demand, the owner may withhold any further payments until the list is furnished.9 Further, the contractor may not seek a lien against the structure until the list is provided to the owner.10
Waiver
Contractors or subcontractors are not considered to have waived their right to seek a lien under Delaware's mechanics' lien law by simply granting a credit or receiving notes or other securities unless such is received as payment for labor or materials or the lienis expressly waived.11 On public policy grounds, any contract or agreement where a contractor waives the rights provided for under Delaware's mechanics' lien statute is void and wholly unenforceable except in specific situations, including at the time that payment is made for the labor or materials provided.12 Any doubt as to the scope of a waiver or ambiguity is resolved against the enforcement of the waiver.13
Rights of Owner In Relation to Residence
An owner of lands, a structure or both which are solely used as a residence is protected from liens by contractors, subcontractors, or materialmen when full or final payment has been made to them in good faith.14 A contractor is required to provide the owner upon full payment with a notarized verified written certification stating that the contractor has paid in full for all labor performed and materials furnished in connection with the job.15 Alternatively, a contractor may provide the owner with a written release signed by all persons who may be able to avail themselves to the provisions of Delaware's mechanics' lien statutes.16 A contractor's failure to provide owner with a certification or release after payment made will provide sufficient cause for the contractor's business or occupational licenses to be suspended or cancelled immediately.17 Failure of the owner to make full payment in good faith will allow the contractor to obtain a lien pursuant to Delaware's mechanics' lien laws.18 Such lien, however, will only be in the amount of the outstanding balance due to that contractor.19 This is another protection provided owners who use the property or structure at issue solely as their residence. Any payments made after service of process are not in good faith and accordingly, will not reduce the amount that the lien
may attach.20
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1 CHRISTOPHER M. COGGINS, Associate, Gordon, Fournaris & Mammarella, P.A. came to the firm in 2007 after receiving his Masters of Law in Taxation from Georgetown University Law Center. He received his Bachelor of Arts from Villanova University (2002) and his Juris Doctor with honors from Seton Hall University (2005). Chris clerked for the Honorable T. Henley Graves of the Delaware Superior Court (2005-2006).
Chris is admitted to practice in Delaware and New Jersey and before the United States District Courts for the Districts of Delaware and New Jersey. He is also a member of the Wilmington Tax Group and the Taxation Section of the Delaware State Bar Association. Chris focuses his practice primarily in Litigation and Taxation. He may be reached at 302-652-2900 or ccoggins@gfmlaw.com.
2 25 Del. C. § 2702.
3 First Florida Bldg. Corp. v. Robino-Ladd Co., 424 A.2d 32 (Del. Super. 1980).
4 25 Del. C. § 2703.
5 25 Del. C. § 2701 (2).
6 Pioneer Nat. Title Ins. Co. v. Exten Associates, Inc., 403 A.2d 283 (Del. Super. 1979).
7 25 Del. C. § 2703.
8 25 Del. C. § 2705.
9 Id.
10 Id.
11 25 Del. C. § 2706 (a).
12 25 Del. C. § 2706 (b).
13 Steel Suppliers, Inc. v. Ehret, 486 A.2d 32 (Del. Super. 1984); G.R. Sponaugle & Sons, Inc. v. McKnight Const. Co., 304 A.2d 339 (Del. Super 1973).
14 25 Del. C. § 2707.
15 Id.
16 Id.
17 Id.
18 Id.
19 Id.
20 25 Del. C. § 2707; Masten Lumber and Supply Co. v. Brown, 405 A.2d 101 (Del. Super. 1979).
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