• Hawaii is a FULL PRICE lien state.
• Remote contractors and suppliers to suppliers have lien rights in Hawaii.
• Under Hawaii statutes, the “completion date” is determined on the Date of Completion of the entire project.
• The lien law will not protect an unlicensed contractor.
• Under H.R.S. § 507-42, a lessor and a lessee may both be considered an “owner” for the purposes of a mechanic’s lien.  
• If the improvements are primarily for dwelling purposes, the general contractor must be licensed before a supplier may obtain a lien.

• Notification is required when selling directly to the owner on residential projects.
• Hawaii requires licensed contractors to have a detailed conversation with the owner of a residential property before beginning work, or risk facing penalties under Hawaii's regulations against unfair or deceptive trade practices. The contractor must inform the homeowner of their lien and bond rights, as well as the lien rights of any contractor, subcontractor, material or labor supplier that will be involved with the project. They must also provide the homeowner with a written copy of the contract, and a version of the contract signed by both the contractor and the homeowner must be executed before any work begins on the project.

Mechanic’s Lien Speed Bumps

• The Application for Mechanic's and Materialman's Lien and Notice of Mechanic's and Materialman's Lien and Demand must be served upon the owner of the property, any person with an interest in the property, and any party or parties who contracted for the improvements, if other than the owner of the property or any person with an interest in the property.

Hearings

• The application and notice will be returned between three to ten days after service, in accordance with Hawaii’s statutory requirements. H.R.S. § 507-43 provides that, on that day, a hearing will be held in which the court will determine whether probable cause exists to permit the lien to attach to the property. Normally, however, the return hearing will only be used by the court to determine whether any interested party contests the attachment of the lien. If no one contests its attachment, the court generally will grant the lien application.

• If the lien is contested, the court typically sets a further hearing to determine whether probable cause exists to allow attachment of the lien. Between the date of the return hearing and the “probable cause” hearing, the parties may conduct discovery upon each other concerning the claims and defenses.

• An application of mechanic’s lien must be filed after demand has been made for payment and payment has been refused or neglected but in no event later than "within 45 days after the Date of Completion of the improvements against which it is filed."   

• Hawaii courts will permit liens to attach to private leasehold interests on government-owned land.

Foreclosure Speed Bumps

• The Hawaii Circuit Court for the First Circuit construed the “three months” provision to be equivalent to 90 days.
  
  

• The policy board may adopt rules that authorize the head of a purchasing agency to reduce the amount of performance and payment bonds.
  
  
• If the full amount of the liability of the sureties on the payment bond is insufficient to pay the full amount of the claims, then, after paying the full amount due the State, the remainder shall be distributed pro rata among the claimants.