An Interesting Decision Discharges a Mechanic’s Lien

Construction going on in the city.

As discussed numerous times on this blog, the mechanic’s lien laws provide a security interest in privately owned real property in favor of those that improve it. According to Conn. Gen. Stat. §49-33, “[i]f any person has a claim for more than ten dollars for materials furnished or services rendered in the construction, raising, removal or repairs of any building or any of its appurtenances or in the improvement of any lot or in the site development or subdivision of any plot of land …then the plot of land, is subject to the payment of the claim.” While it is true that the type of work for which a mechanic’s lien may be enforced is sometimes subject to dispute, prior to the recent decision in CLW Real Estate Developments, LLC v. SAB Construction Management, LLC, the issue had been fairly well resolved.

Generally speaking, the types of services that support a mechanic’s lien are those that substantively improve the property. The Connecticut Appellate Court has “observed that a ‘mechanic’ has been defined as ‘a skilled worker who brings about a result by the use of tools, machines or equipment.’” Weber v. Pascarella Mason St., LLC, 103 Conn. App. 710, 716 (Conn. App. Ct. 2007). Thus, mechanic’s liens based upon services that constitute maintenance, such as mowing lawns, snow plowing, and leaf removal have been soundly rejected, whereas, liens for providing physical improvements or supplying materials for physical improvements are routinely upheld.

The only exception to the requirement for the lienor to have provided an actual physical improvement to real property is for the land surveyors and design professionals without whose contributions the improvement to real property would not be possible. Id.; see also Conn. Gen. Stat. § 49-33. For example, “[t]he court in Nickel Mine Brook Associates noted the ‘distinct difference’ that existed between legal services and the types of services that previously had been held to fall within the scope of § 49-33 (a).” Id. “[I]nterpreting the 1974 amendment as having expanded the scope of § 49-33 (a) to include legal services could lead to the filing of mechanic’s liens by a wide range of parties who provide services to land developers, such as insurance agents, real estate agents who are instrumental in the purchase of land and advise as to its potential uses, and financial advisers such as bankers and accountants.” Id. In other words, the lienor’s efforts have to directly impact the property instead of being ancillary.

In light of the foregoing, a mechanic’s lien may be filed by those that provide design and/or construction services for an actual improvement to real property. Therefore, it would seem reasonable that those providing supervision of the construction would be able to file a mechanic’s lien — but the court in Clw Real Estate Devs. v. Sab Constr. Mgmt., 2016 Conn. Super. LEXIS 2679 said no.

The lienor in Clw Real Estate Devs. v. Sab Constr. Mgmt had provided construction management services. Id. “Under the terms of that contract SAB’s responsibilities were the oversight of people or entities performing preconstruction and construction work and the presentations of budget estimates for that work.” Id. These services are directly tied to the improvement of real property in the same manner as the design and construction services that have traditionally supported a lien. Nonetheless, the court discharged the lien because the construction manager “did not do any work on the site development or subdivision of the Liened Property.” Id. This opinion is somewhat baffling insofar as a material supplier does not do any work the property but no one would claim that a material supplier does not have the right to file a mechanic’s lien.

Reconciling Clw Real Estate Devs. v. Sab Constr. Mgmt with prior precedent can be accomplished by limiting this decision to its facts. The lien document stated that the construction manager did work on site but it did not. Id. Therefore, Clw Real Estate Devs. v. Sab Constr. Mgmt should be viewed as a cautionary tale for practitioners. Instead of using boilerplate lien documents, the lien documents should accurately describe the services that have been provided.

If you should have any questions about whether you are entitled to file a mechanic’s lien, please give me a call at (860) 785-4629.

Scott Orenstein