• The District of Columbia is an UNPAID BALANCE lien territory.
• Advance Payments by the Owner: If the owner, for the purpose of avoiding and defeating a subcontractor's lien, makes payments to the contractor in advance of the time agreed upon in the contract, and the amount due, or to become due, to the principal contractor shall be insufficient to satisfy the liens of the subcontractors, then the property shall remain subject to a FULL PRICE LIEN.
• 3rd and lower tier subcontractors and materialman are not entitled to lien rights in the District of Columbia.

Notice Speed Bumps

• Section 40-303.05 allows the subcontractor to demand from the owner a “Subcontractor’s Demand for Information” "under which the work contracted for is being done and the amount due, or to become due, to the contractor executing the contract". - Section 40-303.05 of the DC Statute
• If the owner or his agent fails or refuses to give the information, or willfully states falsely the terms of the contract or the amounts due or unpaid, then the subcontractor or suppler shall have a FULL PRICE LIEN.

Mechanic’s Lien Speed Bumps

• The Recorder of Deeds takes the position that the Notice of Lien cannot be filed during construction but must be filed after completion or termination.
• "Any prime contractor who records a Notice of Intent to Hold Lien shall send, to the owner, by certified mail to the current address of the owner, a copy of the Notice of Intent to Hold Lien within five (5) business days after the date of its recordation in the land records." 
  DC Code § 40-301.02
• "If the certified mail is returned to the contractor unclaimed or undelivered, the contractor shall post a copy of the Notice of Mechanic’s Lien on the affected real property in a location generally visible from some entry point to the real property." DC Code § 40-301.02
• Effective 6/4/12 a lien may be filed during construction but not later than within 90 days of completion or termination of the project
• The Clerk at the Recorder of Deeds has the authority to refuse a Mechanic’s Lien filing.
• It seems problematic that the Clerk has power for what would normally be judicial to decide whether a claimant has valid lien rights. If the clerk refuses to file a notice of lien based on one of these requirements, a claimant could lose lien rights if the time to file passes, whether the clerk was correct or not. This does not seem fair to the Recorder of Deeds or contractors in the District. It is normally the function of a court to determine whether a mechanic’s lien is valid. - Thank you to James D. Fullerton, Esq.
• In addition, the claimant must provide certain documents to the Recorder of Deeds in order to get the Notice filed: (1) if claimant is a DC corporation or is doing business in DC, need to provide copy of current license to do business in DC issued by DCRA; and certificate of good standing from DCRA issued within 180 days prior to the date of filing of the lien notice or if claimant is organized under the laws of another jurisdiction other than DC or is not doing business in DC, a copy of current license to do business in the other jurisdiction and a certificate of good standing issued from the other jurisdiction within 180 days prior to the date of filing of the lien notice; (2) if the project is a home improvement contract, a copy of the home improvement contract; and (3) if an authorized representative of claimant is filing the lien notice, a Letter of Authorization from the claimant. - Thank you to James D. Fullerton, Esq.

Foreclosure Speed Bumps

• D.C. Code 3-305: Bond claim rights are extended to the 3rd tier and included rights for those renting equipment.
• According to The American Subcontractors Association (ASA) Washington D.C. has added to its procurement website a list of payments made to prime contractors. Subcontractors and suppliers can use this report to figure out when their prime contractors have been paid by the city government. Find the most recent payment report at the bottom of the Department of General Services webpage. Department of General Services’ Web page.