Construction project liens are critical. They can secure payment. They directly impact payment negotiations and bargaining positions. However, compliance with Ohio’s lien laws can be tricky. One mistake can be fatal.
Recent developments in Ohio’s notice of furnishing (“NOF”) requirements illustrate the complexities of lien law. If a NOF is required, the lien claimant must serve the NOF within 21 days of the claimant’s first date of project work or supply. In 2010, Ohio’s Twelfth Appellate District determined that a NOF served one day before
the lien claimant’s first date of project work was invalid, which, in turn, invalidated the mechanic’s lien. See Halsey, Inc. v. Isbel
, 2010-Ohio-2052 (12th
Dist.). But just last month, Ohio’s Ninth Appellate District concluded the opposite: a NOF can be served prior to the lien claimant’s first date of work. See Pursuit Commercial Door Solution, Inc. v. ROCE Group, LLC
, 2019-Ohio-3251 (9th
Dist., Aug. 14, 2019).
While each of these cases ― and their corresponding NOF interpretations ― are controlling in their respective counties (Ohio’s Twelfth Appellate District encompasses Preble, Butler, Warren, Clermont, Clinton, Brown, Fayette and Madison Counties and Ohio’s Ninth District covers Summit, Medina, Lorain and Wayne Counties), the issue has not yet been brought to the Ohio Supreme Court for a final decision. Undoubtedly, the state’s highest court will be asked to decide, but until then, the recommended practice is to serve the NOF within 21 days of the first date of work, but not until after the claimant commences its work to avoid unnecessary lien challenges.
Other key lien deadlines include:
Deadlines to record a mechanic’s lien (private project lien) with the county recorder:
Deadline to serve the mechanic’s lien:
- Residential: 60 days from last date of work/supply
- Commercial: 75 days from last date of work/supply
- Oil and gas: 120 days from last date of work/supply
Deadline to perfect an attested account claim (public project lien):
- Within 30 days of the date of recording; must be served on the real property owner or the owner’s designee, if identified in the project notice of commencement
Deadline to file a payment bond claim:
- Must be served on the public authority within 120 days of the lien claimant’s last date of work/supply and to preserve priority, filed with the county recorder within 30 days after service
- Public project: must be served on the surety within 90 days of project completion and acceptance of the public project
- Private project: deadlines and service requirements are determined by the terms of the bond, if one exists
Given the nuances of Ohio’s lien laws, and the high cost of making any mistakes, consultation with experienced attorneys to provide the necessary training, forms and advice on a case-by-case basis is always recommended.