Minnesota Lien Laws (NOT LOOKING FOR OR WILL TAKE COMMENTS AS LEGAL ADVISE)

2349 Views 3 Replies 0 Participants Last post by FremontREO, Dec 2, 2011

Discussion Starter · Dec 1, 2011

This is not to be taken as legal advise in any capacity. Nor will any responsibility be placed on anyone in regards to the DISCUSSION about the post below.

Good Afternoon,

I spent some time looking at MN lien law (www.revisor.mn.gov) and found this entry:

337.10 BUILDING AND CONSTRUCTION CONTRACTS; PROHIBITED PROVISIONS.
Subdivision 1.Application of laws of another state.

Provisions contained in, or executed in connection with, a building and construction contract to be performed in Minnesota making the contract subject to the laws of another state or requiring that any litigation, arbitration, or other dispute resolution process on the contract occur in another state are void and unenforceable.
Subd. 2.Waiver of lien or claim.

Provisions contained in, or executed in connection with, a building and construction contract requiring a contractor, subcontractor, or material supplier to waive the right to a mechanics lien or to a claim against a payment bond before the person has been paid for the labor or materials or both that the person furnished are void and unenforceable. This provision shall not affect the validity of a waiver as to any third party who detrimentally relies upon the waiver.

As I understand, and I am no lawyer, that waiver of lien rights in contracts to minnesota contractors is not enforceable.

What are your opinions?

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Discussion Starter · #2 · Dec 1, 2011

72opp said:
This is not to be taken as legal advise in any capacity. Nor will any responsibility be placed on anyone in regards to the DISCUSSION about the post below.

Good Afternoon,

I spent some time looking at MN lien law (www.revisor.mn.gov) and found this entry:

As I understand, and I am no lawyer, that waiver of lien rights in contracts to minnesota contractors is not enforceable.

What are your opinions?

It's the same here in MI , no one can wave their right to lien until the work has been performed. And even then an employee or sub can still file a lien on the property if they were not paid.

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Discussion Starter · #3 · Dec 1, 2011

The way I read it, waiving lien rights prior to payment is not enforceable. Therefore, if a contractor includes language in a contract that says you may not lien, that clause is not enforceable.

The next part, if you provided a waiver of lien to the contractor (even if you were not paid) and the customer relied on that waiver to pay the contractor, then the waiver is binding.

The whole point of waivers of lien is to notify the owner/purchaser that the subs and suppliers have been paid.

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Discussion Starter · #4 · Dec 2, 2011

Thom has been around the block a few times eh? :clap:

He hit it right on the head....This is how our MN law firm told us.

If the contract you sign notifies that "you cannot file any liens" than that is the same as a lien waiver and is enforceable even if you have not been paid.

The most important part of these contracts that are NOT enforceable is if you have not been paid than you DO NOT have to file civil suit in the location of the State where the P&P Company is located.

NOTE: that is the reason why a lot of these companies will pay a "partial" payment since then YOU have to file for arbitration in the State where the Contract states.

This is how it was explained to us

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