Do Materialman's Liens Cover Attorney's Fees?
No, a court rules.

Background. Church treasurers should be familiar with materialman's liens. A materialman's lien is a lien imposed by most states on property owners to secure payment for materials provided by suppliers in connection with construction projects. The basic idea is this—if a supplier of construction materials is not paid by the general contractor, then the property owner will be legally obligated to pay the supplier directly for the materials even if it previously paid the contractor for them. A recent case illustrates an important limitation on materialman's liens,

$$ Key point. Materialman's liens can come as an unpleasant surprise to church leaders. The church may be required to pay twice for materials used in a construction project.

Facts of the case. A supplier provided materials to a church in connection with a construction project. Before each delivery the supplier sent the church a letter notifying it of the delivery and warning it that if the general contractor failed to pay for the materials then the supplier "could claim a lien against the church's property for which the church would be responsible." When the general contractor failed to pay the supplier for the materials, the supplier sued the church to enforce its materialman's lien.

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Posted: August 1, 1998
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