Title 101: Making Sense of Title Insurance in Commercial Transactions

WHO MAY CLAIM Any person who has performed work or furnished materials to erect, alter, or repair a structure pursuant to authorization from owner/agent of owner (includes work performed by architects). 25 DE CODE § 2702 DEADLINE TO PERFECT Statement of claim filing deadline is contingent upon whether lienor is a contractor (one who has made a contract directly with owner of structure and has furnished labor/materials for said structure): • Direct Contractor: within 180 days of the nine enumerated conditions set forth in 25 DE CODE § 2711 (A)(2)(A-I). • Others: within 120 days from date of completion/last materials furnished (within 120 days that final payment is due to lienor or final payment is made to the contractor). NOTE: Statement of claim creates a cautionary lien that is made permanent by issuance of a scire facias and the entry of a judgment thereon. 25 DE CODE § 2711 BROKEN PRIORITY A statement of lien together with a scire facias resulting in a judgment in rem constitutes a lien that relates back to the latter of: • The date upon which the subject labor began/material furnished or • The time immediately after recordation of a first mortgage which is granted to secure an existing indebtedness or future advances provided at least 50% of loan proceeds are used for payment of labor, materials, or both NOTE: A first mortgage granted to secure a loan to pay the costs of labor or material for a structure shall have priority over a mechanics’ lien. Builders’ Choice, Inc. v. Venzon, 672 A.2d 1, 3 (Del. 1995). 25 DE CODE § 2718 Only vertical construction is lienable; a mechanic’s lien cannot be filed relative to sitework unless the contract for the sitework contains a metes and bounds legal description. See 25 DE CODE § 2703. See also Pearce & Moretto, Inc. v. Hyetts Corner, LLC, 2020 WL 532748 (Del. Super. Jan 31. 2020). DURATION OF LIEN Statement of claim, once filed, constitutes an action to enforce. Resulting judgment – mechanics’ lien is good for the duration of 10 years of entry. Gamles Corp. v. Gibson, 939 A.2d 1269, 1272 (Del. 2007) 25 DE CODE § 2718 CONTENTS OF LIEN (1) In writing; (2) name of claimant; (3) name of owner/reputed owner; (4) name of contract and whether contract was made with owner/owner’s agent/contractor; (5) amount due; (6) date of commencement for subject labor/material; (7) date labor/materials completed; (8) description of land sufficient to ID; (9) statement that work/materials furnished on the credit of structure; (10) amount of claim and statement that it has not been paid; (11) time of recording of any first mortgage granted to secure an indebtedness or future advance where at least 50% used to pay for labor and/or materials; and (12) inclusion of affidavit by claimant stating facts therein are true and correct. Substantial compliance. The above are mandatory and omission will void lien. Warner Co. v. Leedom Const. Co., 1952, 47 Del. 457, 93 A.2d 316, affirmed 48 Del. 58, 97 A.2d 884. 25 DE CODE § 2712 DELAWARE DELAWARE – 510 – 1. This chart is to be used strictly as a guideline to facilitate mechanic’s lien inquiries. Parties using this resource should ensure they are independently confirming the information contained herein before relying on the same. NATIONAL COMMERCIAL SERVICES BY STATE MECHANIC’S LIEN

RkJQdWJsaXNoZXIy ODI0NDE4