Print Friendly SENATE BILL NO. 1377 – Liens, residential property/diclsrs
SENATE BILL NO. 1377
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S1377.......................................by COMMERCE AND HUMAN RESOURCES
LIENS - Amends and adds to existing law to require that copies of lien
claims be delivered or mailed within five business days after filing of
such lien claims; and to require that general contractors disclose certain
information to owners and purchasers of residential real property.
02/06 Senate intro - 1st rdg - to printing
02/07 Rpt prt - to Com/HuRes
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature Second Regular Session - 2002
IN THE SENATE
SENATE BILL NO. 1377
BY COMMERCE AND HUMAN RESOURCES COMMITTEE
1 AN ACT
2 RELATING TO LIENS; AMENDING SECTION 45-507, IDAHO CODE, TO PROVIDE THAT A COPY
3 OF A CLAIM OF LIEN SHALL BE PERSONALLY DELIVERED OR MAILED NO LATER THAN
4 FIVE BUSINESS DAYS FOLLOWING THE FILING OF SUCH CLAIM OF LIEN; AMENDING
5 CHAPTER 5, TITLE 45, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 45-525,
6 IDAHO CODE, TO REQUIRE THAT GENERAL CONTRACTORS DISCLOSE CERTAIN INFORMA-
7 TION TO OWNERS AND PURCHASERS OF RESIDENTIAL REAL PROPERTY; AND PROVIDING
8 AN EFFECTIVE DATE.
9 Be It Enacted by the Legislature of the State of Idaho:
10 SECTION 1. That Section 45-507, Idaho Code, be, and the same is hereby
11 amended to read as follows:
12 45-507. CLAIM OF LIEN. (1) Any person claiming a lien pursuant to the
13 provisions of this chapter must file a claim for record with the county
14 recorder for the county in which such property or some part thereof is situ-
16 (2) The claim shall be filed within ninety (90) days after the completion
17 of the labor or services, or furnishing of materials.
18 (3) The claim shall contain:
19 (a) A statement of his demand, after deducting all just credits and off-
21 (b) The name of the owner, or reputed owner, if known;
22 (c) The name of the person by whom he was employed or to whom he fur-
23 nished the materials; and
24 (d) A description of the property to be charged with the lien, sufficient
25 for identification.
26 (4) Such claim must be verified by the oath of the claimant, his agent or
27 attorney, to the effect that the affiant believes the same to be just.
28 (5) A true and correct copy of the claim of lien shall be served on the
29 owner or reputed owner of the property either by delivering a copy thereof to
30 the owner or reputed owner personally or by mailing a copy thereof by certi-
31 fied mail to the owner or reputed owner at his last known address. Such deliv-
32 ery or mailing shall be made no later than twenty-four five ( 245) hours busi-
33 ness days following the filing of said claim of lien.
34 SECTION 2. That Chapter 5, Title 45, Idaho Code, be, and the same is
35 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
36 ignated as Section 45-525, Idaho Code, and to read as follows:
37 45-525. GENERAL CONTRACTORS -- RESIDENTIAL PROPERTY -- DISCLOSURES. (1)
38 Legislative intent. This section is intended to protect owners and purchasers
39 of residential real property by requiring that general contractors provide
40 adequate disclosure of potential liens.
41 (2) General contractor information. Prior to entering into any contract
1 in an amount exceeding two thousand dollars ($2,000) with a homeowner or resi-
2 dential real property purchaser to construct, alter or repair any improvements
3 on residential real property, or with a residential real property purchaser
4 for the purchase and sale of newly constructed property, the general contrac-
5 tor shall provide to the homeowner a disclosure statement setting forth the
6 information specified in this subsection. The statement shall contain an
7 acknowledgment of receipt to be executed by the homeowner or residential real
8 property purchaser. The general contractor shall retain proof of receipt and
9 shall provide a copy to the homeowner or residential real property purchaser.
10 The disclosure shall include the following:
11 (a) The homeowner or residential real property purchaser shall have the
12 right at the reasonable expense of the homeowner or residential real prop-
13 erty purchaser to require that the general contractor obtain lien waivers
14 from any subcontractors providing services or materials to the general
16 (b) The homeowner or residential real property purchaser shall have the
17 right to receive from the general contractor proof that the general con-
18 tractor has a general liability insurance policy including completed oper-
19 ations in effect and proof that the general contractor has worker's com-
20 pensation insurance for his employees as required by Idaho law;
21 (c) The homeowner or residential real property purchaser shall be
22 informed of the opportunity to purchase an extended policy of title insur-
23 ance covering certain unfiled or unrecorded liens; and
24 (d) The homeowner or residential real property purchaser shall have the
25 right to require, at the homeowner's or residential real property
26 purchaser's expense, a surety bond in an amount up to the value of the
27 construction project.
28 (3) Subcontractor, materialmen and rental equipment information.
29 (a) A general contractor shall provide to a prospective residential real
30 property purchaser or homeowner a written disclosure statement, which
31 shall be signed by the general contractor under oath, listing the business
32 names, addresses and telephone numbers of all subcontractors, materialmen
33 and rental equipment providers who have supplied materials or performed
34 work on the residential property of a value in excess of five hundred dol-
35 lars ($500). Such information shall be provided within a reasonable time
36 prior to:
37 (i) The closing on any purchase and sales agreement with a prospec-
38 tive residential real property purchaser; or
39 (ii) The final payment to the general contractor by a homeowner or
40 residential real property purchaser for construction, alteration, or
41 repair of any improvement of residential real property.
42 (b) All subcontractors, materialmen and rental equipment providers listed
43 in the disclosure statement are authorized to disclose balances owed to
44 the prospective real property purchasers or homeowners and to the agents
45 of such purchasers or homeowners.
46 (c) The general contractor shall not be liable for any error, inaccuracy
47 or omission of any information delivered pursuant to this section if the
48 error, inaccuracy or omission was not within the personal knowledge of the
49 general contractor and such error, inaccuracy or omission could not be
50 discovered by the general contractor by making reasonable inquiry to such
51 general contractor's subcontractors, materialmen and rental equipment
53 (4) Failure to disclose. Failure to provide complete disclosures as
54 required by this section to the homeowner or prospective residential real
55 property purchaser shall constitute an unlawful and deceptive act or practice
1 in trade or commerce under the provisions of the Idaho consumer protection
2 act, chapter 6, title 48, Idaho Code.
3 (5) Definitions. For purposes of this section:
4 (a) "General contractor" means a person who enters into an agreement in
5 excess of two thousand dollars ($2,000) with:
6 (i) A homeowner or prospective residential real property purchaser
7 for the construction, alteration or repair of residential real prop-
8 erty; or
9 (ii) A prospective residential real property purchaser for the pur-
10 chase and sale of newly constructed property.
11 The term "general contractor" does not include subcontractors, materialmen
12 or rental equipment providers who do not have a direct contractual rela-
13 tionship with the homeowner or residential real property purchaser.
14 (b) "Residential real property" shall include owner and nonowner occupied
15 real property consisting of not less than one (1) nor more than four (4)
16 dwelling units.
17 SECTION 3. This act shall be in full force and effect on and after Janu-
18 ary 1, 2003.
STATEMENT OF PURPOSE
This legislation is designed to address issues relating to liens.
First, the legislation will extend the time for delivery of a claim
of lien to owners of property from 24 hours to five days. Second,
the legislation requires a disclosure by general contractors to
homeowners and residential real property purchasers of certain
options that homeowners and residential real property purchasers
may have when they are remodeling an existing home, building a
custom-built home or buying a home from a general contractor.
These options may help consumers avoid liens. Third, the
legislation requires general contractors to provide the business
names, addresses and telephone numbers of certain subcontractors,
materialmen and rental equipment providers to the homeowners and
residential real property purchasers within a reasonable time prior
to the closing on any purchase and sale agreement with a prospective
residential real property purchaser or prior to final payment to
the general contractor by the homeowner or residential real
property purchaser for construction, alteration, or repair of
any improvement of residential real property. This information
may also help consumers avoid liens. Failure to provide these
disclosures shall constitute an unlawful and deceptive act or
practice in trade or commerce under the provisions of the Idaho
Consumer Protection Act.
There should be no fiscal impact resulting from this proposed
Name: Woody Richards
Organization: Idaho Land Title Association