Posts Tagged ‘Scenarios’

Scenario: Can Mardi Gras Stand Constructors File A Mechanics Lien?

On January 27, 2012 Author By Scott Wolfe Jr        

Scenario: Can Mardi Gras Stand Constructors File A Mechanics Lien?Okay, this is a fun post.

Zlien operates out of New Orleans, LA, and so we’re all very excited about the Mardi Gras season. While Mardi Gras officially started on Kings Day (January 6th – Yes, we had our kings cake), the real active part of Mardi Gras is just now apporaching, with some of the first parade dates nearing.

In the spirit of the season, we’re going to address a scenario where folks may wonder about their mechanics lien rights. While this post talks about a very specific type of work that really only occurs in New Orleans, the lesson applies nationwide.  And that’s a lesson we’ve stated over and over again on this blog:  to qualify for mechanic lien rights, incorporation into the improvement is key.

Mardi Gras stands are simply temporary structures where people can stand or sit to watch parades. Local construction companies contract with the city or private entities to build these stands on public or private property.  I found a photograph online of some Mardi Gars stands at the famous Gallier Hall, which will give you a good idea of what these things look like.

Scenario: Can Mardi Gras Stand Constructors File A Mechanics Lien?

Mardi Gras stands constructed in front of Gallier Hall. This is what these Mardi Gras stands look like all over the city of New Orleans, which are constructed and left complete for approximately 1 month a year across the city.

Companies construct these stands to provide temporary value to the property (property owner’s can charge companies big money to use these stands), and they are a “construction project” … but do they qualify for mechanic lien rights?

In most states, the answer will be a resounding no.

The reason this construction does not qualify for lien rights is that they are not permanently attached to the property, and they do not permanently improve the property. Without permanent attachment, there’s no lien rights. That’s that.

Now here comes the surprise.

While the law is crystal clear in most states that this would not be lienable services, in Louisiana, the law isn’t so clear. In fact, after reviewing the law in light of this question, I’d be willing to state that this work very well may qualify for a mechanic’s lien.

The right to file the mechanic’s lien would arise out of the Louisiana Private Works Act.  When describing who has the right to file a lien, the law provides as follows:

The following persons have a privilege on an immovable to secure the following obligations of the owner arising out of a work on the immovable:

(1) Contractors, for the price of their work.

(2) Laborers or employees of the owner, for the price of work performed at the site of the immovable.

(3) Sellers, for the price of movables sold to the owner that become component parts of the immovable, or are consumed at the site of the immovable, or are consumed in machinery or equipment used at the site of the immovable.

What’s interesting about this is that the requirement for the work to be “consumed” at the site or to become “component parts of the improvement” are limited only to those who sell movables (i.e. material suppliers).  But, what about laborers, contractors and subcontractors?  These folks are entitled to the price of their work without any such qualification.

An additional step is required to see if Mardi Gras stand construction qualifies for a lien, as the Louisiana statute only allows a lien filing if the obligations “arise [sic] out of a work.”  The term “work” is a definable term, defined in the Private Works Act’s §9:4808 as follows:

A work is a single continuous project for the improvement, construction, erection, reconstruction, modification, repair, demolition, or other physical change of an immovable or its component parts.

Whoa!  Look at that.  It’s a pretty broad definition.  It includes any project for the construction, modification, repair…”other physical change” of an immovable or its component parts.

Now, practically speaking, I think a Louisiana judge would look at a mechanic’s lien for Mardi Gras stand construction very strictly, and perhaps interpret the Private Works Statutes in a way that does not classify these stands as a “physical change” to the immovable or component parts.  However, it would make for a very colorful argument, and I’m not convinced the law in Louisiana is clear on either side.

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Scenario: Can Landscapers File A Mechanics Lien?

On January 13, 2012 Author By Scott Wolfe Jr        

Scenario: Can Landscapers File A Mechanics Lien?

I’m frequently approached by landscaping companies to advise them on the extent of their mechanics lien rights. These companies usually have a mix of business. Sometimes, they’re doing full landscaping projects, re-landscaping a particular property.  Other times, they are doing landscape maintenance in some form.  I’ve even been approached in the past by lawn mowing services, who are interested in filing a lien against properties where they’ve mowed the lawn (without payment) for a period of weeks or months.

So, do landscaping companies have lien rights?  The answer (of course) is sometimes.

To help discuss this issue, there is a Florida case from 1986 that discusses this exact circumstance.  While this is a Florida case, the same principle applies pretty consistently across the nation, although there are exceptions in certain states where landscapers are given much greater and much less latitude as is given in Florida.

The case is Legault v. Suncoast Lawn Services, Inc., where the Fourth District Court of Appeal in Florida explained as follows:

Section 713.01(8), Florida Statutes, requires that an improvement, in order to support a mechanic’s lien, must result in a permanent benefit to the land or other real property…Although planting for landscaping purposes may be considered a permanent improvement, maintenance landscaping services do not bestow a permanent benefit upon the land, and do not entitle the laborer to a mechanic’s lien.

Therefore, a landscaping company “planting for landscaping purposes” is considered contribution of a permanent improvement. However, simple landscaping maintenance services (like lawn mowing) does not qualify.

As usual, the trouble is sorting out all the gray area between what is “planting for landscaping purposes” and maintenance.

This is very similiar to scenarios we posted about in the past.  Actually, you can find a very common theme in all of these scenarios:  When you perform maintenance work or work that does not create a permanent attachment to the property, you don’t have lien rights. If you do create a permanent attachment, you do have lien rights.  With certain exceptions, that’s the golden rule.  Here are the other two similar scenarios:

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Scenario: Can You File A Mechanics Lien for Cleaning Services?

On December 2, 2011 Author By Scott Wolfe Jr        
Scenario: Can You File A Mechanics Lien for Cleaning Services?

I’m frequently contacted by cleaning services who are interested in filing a mechanics lien.  It’s very a rarely a housekeeper or housekeeping service making this inquiry. Usually, it’s a commercial cleaning service of some type, who has performed cleaning services at commercial facilities on a contract basis.

So, do they have lien rights?  Most likely no, but it’s not completely hopeless.

First, just like any mechanics lien question, there is the issue of each state’s individual laws.  In some states, only a very small, select group of people have mechanic lien rights.  In other states, the lien rights are a lot more liberally distributed.  The more liberal a state’s mechanic lien statute, the more likely you’ll have lien rights.

Second, and more importantly, you should look to the nature of your services. Most mechanic lien statutes provide parties the right to file a mechanics lien on construction projects of some sort. What constitutes a construction project depends on the state’s definition, but you can be pretty certain that simply cleaning a facility as part of a commercial cleaning contract will not qualify as a construction project of any type qualifying your service for lien rights.

However, I can envision a scenario where cleaning services may qualify for mechanic lien protections.  When you ask?  Well, how about end-of-job cleaning services, where a cleaning service is hired to come to a jobsite and make it broom clean?

In that instance, cleaning services may have lien rights. In all other instances, however, they likely don’t.

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Scenario: Can IKEA Installers File A Mechanics Lien?

On November 28, 2011 Author By Scott Wolfe Jr        

Last week, we had new furniture from IKEA delivered and installed at our New Orleans office. We actually hired a great little local company to pick up the furniture from Houston, deliver it to us and then assemble everything (Bluebag). Here, by the way, is a photo of our installation:


Scenario: Can IKEA Installers File A Mechanics Lien?

Ever since I began courting my wife in her college-town of Atlanta, GA (where there is an IKEA), I’ve had a small love affair with the furniture company.  Through experience I’ve learned that there are folks all around the country who will assemble IKEA furniture for you.  While not necessary when you buy just a few easy-to-install items, it does make sense if you’re a business setting up an office space, installing a new kitchen, etc.

While our IKEA assembler from Bluebag was installing our office furniture it got me to thinking:  could they file a lien for this?

I think that in some scenarios IKEA furniture assemblers could actually have lien rights, but it depends on a question that should be near and dear to the hearts of material suppliers and contractors: was the services, labor or material incorporated into the property?

This “incorporation of materials / services” was touched upon in the blog post:  Does Lien Clock Start When Materials Leave Supplier or Arrive At Job Site.  The idea was actually more fully discussed in that post’s comments, so you might want to look there.

The bottom line is this:  Before anyone is entitled to file a lien, their services or materials must actually be incorporated into the immovable.

What does this mean for IKEA furniture installers?

The IKEA installer who put together our office furniture would likely not have a mechanics lien right. The reason is simply that the office furniture is just sitting loosely in a room, can be easily moved and easily removed.  It’s not a component of our building.  It’s just furniture.

I mentioned that IKEA installers often install kitchens, however. In this scenario, I think they would be more likely to have lien rights.  Installations of kitchen cabinets, counter tops and appliances are fixed to the building such that most states will consider them as “incorporated” with the building, and therefore, entitling the installers the right of filing a mechanics lien.

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