Who Has Mechanic’s Lien Rights in the District of Columbia?
In the District of Columbia, every building erected, improved, added to, or repaired at the direction of the owner or the owner’s agent, including the land on which the improvement is erected, is subject to a lien in favor of the contractor who contracted with the owner or with the owner’s agent in the amount of the contract price or, in the absence of an express contract, the reasonable value of the project. See D.C. Code § 40-301.01. The District of Columbia’s Mechanic’s Lien statute defines “Owner” to include owners in fee simple, lessees, and even prospective purchasers in possession under a contract of sale authorized to contract for a project. The statute also provides lien rights to any person directly employed by the general contractor to furnish work or materials for the completion of the project, such as subcontractors, materialmen (suppliers), and laborers. See D.C. Code § 40-303.01. It is a company’s status on a particular project (i.e., whether it is a general contractor, subcontractor, supplier, or sub-subcontractor) that determines whether it may claim statutory Mechanic’s Lien rights.
The District of Columbia Mechanic’s Lien statute (D.C. Code § 40-301.01, et seq.) recognizes that those who do work on real property but are not compensated pursuant to the terms of their contract, are creditors and are entitled to a lien to ensure they get paid. See King Carpentry, Inc. v. 1345 K Street SE, LLC, 262 A.3d 1105, 1112 (D.C. 2021). The lien is statutorily created upon filing the required notice with the Recorder of Deeds of the District of Columbia and serving the lien claim notice on the property owner. D.C. Code § 40-303.03. Thereafter, a lienholder may enforce the lien by filing suit in equity (D.C. Code § 40-303.08), and if the lienholder prevails, the court will order the sale of the property and direct that the lienholder be paid from the proceeds. D.C. Code § 40-303.09.
1. The General Contractor
As noted above, D.C. Code § 40-301.01 provides that the contractor who contracts directly with the owner or with the owner’s agent for erecting, improving, adding to, or repairing a building may claim a lien against the building and the land upon which the building sits, on completing the requirements set out in the statute.
2. Subcontractors, Materialmen, and Laborers
The District of Columbia Mechanic’s Lien statute provides that any person directly employed by the contractor described in D.C. Code § 40-303.01 (the original contractor or the “General Contractor”), whether the person is a subcontractor, materialman, or laborer, to furnish work or materials for the completion of the project, has the same lien rights, and is subject to the same obligations for establishing and enforcing a lien, as the original contractor. A company that contracts directly with the General Contractor on a project, has Mechanic’s Lien rights under the statute, provided it complies with all the statute’s technical requirements for establishing and enforcing the lien. Interestingly, if both the General Contractor and a subcontractor file Mechanic’s Liens, the subcontractor’s lien must be satisfied before the General Contractor’s lien. (See D.C. Code § 40-303.10 (subcontractor preferred to contractor)).
A “sub-subcontractor” is a company that enters an agreement with a subcontractor to provide labor or materials to the project. Because such “second-tier” and other lower-tier subcontractors do not have a direct contract with either the owner, the owner’s agent, or with the General Contractor, they do not come within the terms of either D.C. Code § 40-301.01 (General Contractors) or § 40-303.01 (Subcontractors), they do not have lien rights under the Mechanic’s Lien statute. See Battista v. Horton, Myers & Raymond, 128 F.2d 29, 31 (D.C. Cir. 1942). An entity must have a direct contract with the project owner, with the owner’s agent, or with the General Contractor, in order to claim lien rights under the D.C. Mechanic’s Lien statute. If an entity’s agreement is with a subcontractor, that entity does not have lien rights under the statute. However, you may have other legal or equitable remedies to pursue for non-payment for the work performed or materials supplied on the project.