A Guide to Wisconsin Construction Lien Law*
As a homeowner, contractor, subcontractor, or supplier of construction materials, it is important to have a basic understanding of the laws contained in Chapter 779 of the Wisconsin Statutes governing construction liens for building and remodeling projects. Contractors, subcontractors, and materials suppliers who provide labor for the improvement of property but do not receive the agreed upon payment may assert a lien against that property as a way of securing payment for services rendered. Once the lien is “perfected,” it becomes an encumbrance against the property much the same as a mortgage. The procedures necessary to perfect a lien claim vary depending on the nature of the claimant and the type of property at issue.
The claimants of construction liens are categorized in two different ways: (1) prime contractors; and (2) subcontractors, suppliers, and service providers. With some exceptions, in order to assert a successful lien claim, a prime contractor, subcontractor, supplier or service provider must furnish property owners with a notice of their Wisconsin lien rights prior to or at the time of rendering services or supplying materials. A lien claimant must file its claim in circuit court no later than six months after the claimant last made improvements or furnished materials to the property. Prior to filing in the circuit court, the lien claimant must have served the property owner with a notice of its intent to file a lien claim not sooner than 30 days prior to filing the lien claim. Within 2 years of filing the lien claim, the claimant must file a lawsuit foreclosing on the lien in order to render the lien legally enforceable.
Before commencing a lien foreclosure action, it is imperative that you conduct a thorough search of the title record to the property. This is an essential step in determining whether any other creditors have claims against the same property that may be deemed superior to your own. Furthermore, it is important that you determine the true owner of the property so that the proper defendant is named in the threshold notice, the notice of intent to file, and the lien foreclosure action. This can often be accomplished through a search with the local Register of Deeds.
If you are a contractor, subcontractor, or materials supplier looking to safeguard against non-performance of contractual obligations by a homeowner, you may want to consider the use of a construction lien. Perfecting construction liens is a complex process subject to many different notice requirements and other legal variables. Prior to taking any action, you should hire an experienced attorney to help you navigate this complex system. John M. Kelly, Attorney at Law, LLC is home to over 42 years of experience counseling clients through a variety of construction law problems. Call today to ensure your business receives the compensation it deserves.
*General information on the laws governing Wisconsin construction liens was obtained from: Steven W. Martin & Bridget M. Hubing, Wisconsin Construction Lien Law Handbook (4th ed. 2014).