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The Payment Vulnerability Of Service Providers

Tuesday, February 03, 2004 11:57 am

 
The Payment Vulnerability Of Service Providers

Mechanic's liens and payment bonds usually speak in terms of securing payment for the parties that furnish labor or materials to a project. On a contemporary construction project, however, there are frequently companies or individuals providing professional, technical, or supervisory services in support of the effort. These services are generally not considered "labor"that enhances the value of the project. Consequently, the service providers may be left unprotected by lien statutes and payment bonds.

Licensed architects, engineers and surveyors are, in most states, expressly included in the coverage of the mechanic's lien statutes. But a technical consultant who is not a licensed design professional may not be protected.

In one case, a technical consultant to a prime contractor performed quantity take-offs, compiled a list of necessary fabricated components, and prepared instructions for assembly of the components. But when the consultant was not paid for its services, the consultant was unable to maintain a mechanic's lien on the project. The consultant had performed no work on site and was considered merely a middle man in the chain of material supply. L & W Supply Corp. v. The Chartrand Family Trust, 40 P.3d 96 (Idaho 2002); CCM May 2002, p. 8.

A design/build contractor furnished a preliminary design and then assisted the project owner in attempting to secure project financing. The contractor was not paid for these efforts. The design/build contr [...]

 
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