JUNE 2024 | 15 THE OKLAHOMA BAR JOURNAL improvements separate from the real estate. [citations omitted] The basic reason for concluding that mere repairs and alterations to an existing structure will not support a lien against such structure is that such improvements are not removable without damage to the original structure and the Legislature obviously did not intend that the lien in such case should extend to the entire existing structure without a contract with the owner of same. This would be in direct conflict with the spirit of the statute. We must, therefore, determine whether the labor performed and material furnished in the instant case resulted in the erection of a new building, or mere repairs to or alterations of an existing building.27 Recommendations Various arguments have been advanced to hold an owner liable for improvements made under contract with a vendee or tenant. Arguments have been made that the owner ratified the contract between the tenant/vendee and the contractor, the owner should be estopped from denying the lien or its attachment to the property and the property should be subject to the lien (and the owner should be liable for the improvements) to prevent unjust enrichment. However, these arguments have been largely rejected. Therefore, contractors and subcontractors should, before providing any labor or materials, verify from a check of the county records that the contractor is dealing with the record owner of the property. NOTICE OF FILING LIEN STATEMENT Both a contractor lien claimant and a subcontractor lien claimant must provide the county clerk with the last known address of the property owner.28 The county clerk is responsible for mailing a notice of filing the lien statement by certified mail return receipt requested to the property owner within one business day after filing the lien statement. PRIORITY OF LIENS Mechanic’s liens are an exception to the general rule in 42 Okla. Stat. §15 that liens are ranked according to the time of their creation. The priority of a mechanic’s lien regarding all other liens and encumbrances on the property dates from the commencement of construction.29 HOMEOWNER NOTICE Effective Nov. 1, 2011, lien claimants are no longer required, as a prerequisite to enforcement of a lien, to furnish a statement warning the homeowner of the possible consequences of the mechanic’s lien law before the construction begins.30 WHAT PROPERTY IS LIENABLE? It may seem logical that a homestead is exempt from materialmen’s liens, but such is often not the case. Generally, “When the provisions of the materialman’s lien statute are complied with, the lien attaches to the homestead.”31 However, there is one statutory exception: “The provisions of this act as relating to leased or rented equipment shall not apply to real property qualified for homestead exemption or real property used for agricultural purposes or real property used for the production of or growing of agricultural products.”32 However, there is a class of property that is exempt from materialmen’s liens: property owned by a governmental entity. There can be no mechanic’s lien on public property unless the statute creating such lien expressly so provides, since such a lien would be contrary to public policy and would be incapable of enforcement – public property not being subject to forced sale.33 Typically, a contractor hired by a governmental entity has little concern about not being paid by the governmental entity (assuming the contractor properly performs its work). However, subcontractors of a contractor hired by a governmental entity may be left unpaid if the contractor accepts payment from the governmental entity but fails to pay subcontractors. Fortunately, the subcontractors are usually protected by the performance bond that contractors are generally required to post when undertaking work on governmental property.34 But like materialmen’s liens, there is a deadline that must be met to recover on the bond.35 WAIVER OF LIEN RIGHTS Oklahoma has a statute that prohibits a contract provision that generally 1) makes the contract subject to the laws of another state or requires any litigation, arbitration or other dispute resolution proceeding arising from the contract to be conducted in another state or 2) disallows or alters the rights of any contractor or subcontractor to receive and enforce rights.36 However, this statute was held inapplicable to mechanic’s liens by H2K Techs v. WSP USA.37 Nevertheless, H2K does provide some protection for a sub-subcontractor lien claimant by holding that when a sub- subcontractor has not waived its Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.
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