Remember in middle school when your teacher announced a pop quiz as you sat down at your desk at the start of class? A collective groan would erupt from the students as the teacher stood at the front of the room listing off the rules of engagement. “Your name must be in the upper right corner. You must write your answers in cursive, not print. You must use a blue or black pen, not a pencil. You must turn in your paper before the bell rings.” Any misstep would, at best, result in points being deducted from your final grade. At worst, you could fail the test.
As a construction lawyer, I now see that these fear-inducing pop quizzes were valuable lessons in following detailed directions, a critical skill for any general contractor wanting to protect its lien rights.
Notice of Lien Rights
In Wisconsin, general contractors (or prime contractors) who contract with property owners for improvements to the owner’s property AND who have engaged or will engage subcontractors, suppliers, or service providers to perform furnish, or procure labor, services, materials, plans, or specifications for the project must give a written lien notice to the owner (subject to limited exceptions).
The Form of Lien Rights Notices
Much like your middle school teacher, the Wisconsin Legislature has listed off the rules of engagement:
The notice must be in writing, either in the
contract with the owner or in a separate notice to the owner.
If the notice is given in a separate document, the
contractor has to serve the notice on the owner within 10 days after the first
labor, services, materials, plans, or specifications are performed, furnished,
or procured for the project.
The contractor must give the owner a copy of the
notice to keep (e.g., either a copy of the contract containing the notice or a
separate notice document).
If there is more than one owner, giving the notice required to anyone owner is sufficient.
The notice must be in at least 8-point bold type if printed, or in capital letters, if typewritten.
The notice must be in substantially the following language:
Language For Lien Rights Notices
“As required by the Wisconsin construction lien law, claimant hereby notifies the owner that persons or companies performing, furnishing, or procuring labor, services, materials, plans, or specifications for the construction on owner’s land may have lien rights on owner’s land and buildings if not paid. Those entitled to lien rights, in addition to the undersigned claimant, are those who contract directly with the owner or those who give the owner notice within 60 days after they first perform, furnish, or procure labor, services, materials, plans, or specifications for the construction. Accordingly, the owner probably will receive notices from those who perform, furnish, or procure labor, services, materials, plans, or specifications for the construction, and should give a copy of each notice received to the mortgage lender, if any. Claimant agrees to cooperate with the owner and the owner’s lender, if any, to see that all potential lien claimants are duly paid.”
Any misstep in providing this lien notice could lead to the contractor losing its lien rights, and potentially thousands of dollars owed for work or materials provided to the project.
Read more about lien rights in chapter 779 of the Wisconsin Statutes, or just raise your hand and ask us a question. We’ve helped many Wisconsin contractors protect their lien rights.