Published in the Idaho Business Review, August 2006

 Businesses in the Treasure Valley are growing even more quickly than the Treasure Valley itself.  This is particularly true in the construction industry.  Economic growth in the Treasure Valley has provided opportunities for companies to grow their business within the valley, and many contractors and material suppliers are expanding their businesses to include work outside of the state of Idaho. 

Becoming an interstate business brings huge growth potential but business owners must consider the repercussions of making such a move.  A key issue that business owners must consider is the difference between Idaho's laws and the laws of other Western states. 

Many laws that govern the business of construction contractors and material suppliers vary from state to state.  This is true with respect to the lien laws of the various states surrounding Idaho.  Given that liens are such a vital part of contractors' and material suppliers' businesses, it is important that Idaho business owners are aware of some of these differences.

A very important difference between Idaho's lien laws and those of other Western states is that Idaho does not have a "Pre-Lien Notice" requirement.  However, California, Nevada, Oregon, Utah and Washington all have such requirements. 

Generally, Pre-Lien Notices require a potential lien filer to send notice, prior to filing a lien, to an owner, general contractor, and certain other parties that may be adversely affected by the lien. 

The content of these notices are statute specific, but they usually must contain: (i) a general description of the labor, services and materials supplied; (ii) the name and address of the person furnishing such labor, services and material; (iii) the name of the person who contracted for the labor, services or materials; (iv) a legal description of the relevant real property; and (v) a statement (often specifically provided in the relevant statute) indicating an intent to file a lien.

A key requirement for Pre-Lien Notices is that they often must be sent before or very shortly after the related work has been started.  This puts the burden on the contractor or material supplier to take action quickly.  It is also the reason why Idaho business owners need to be aware of this requirement.  Without knowing the appropriate timeframes and other Pre-Lien Notice requirements, it can be very easy to lose your lien rights and find yourself unpaid for that first new project out of state. 

Knowing the key timeframes related to a state's lien laws is vital to protecting your rights to be paid.  In Idaho, generally a lien must be filed not later than ninety (90) days after (i) completion of last significant work or (ii) provision of materials, as may be applicable.  In other states, not only is that time frame often different, but sometimes in is tied to when a Pre-Lien Notice was filed as opposed to, or in addition to, when the work was performed.

Idaho law generally provides a lien holder six (6) months from the time the lien is filed to commence an action to foreclose.  In some states the deadline to foreclose is dictated by when the last work was completed on the project, and not when the lien was filed. 

In other states the deadline to file suit depends on whether the project was residential or commercial.  In any event, some of those timeframes are one hundred twenty (120) days or shorter and someone with the six-month Idaho timeframe in mind might wait too long to commence action, and then lose their lien rights.

Some surrounding states also have provisions for a "stop notice" in the context of collecting money due for work or materials provided on a construction project.  California and Washington both have laws that permit stop notices to be sent to a construction lender (and sometimes other relevant parties) when a contractor or material supplier is not receiving proper payments from an owner or general contractor. 

When properly used, a stop notice can provide a legal right to make a claim for payment directly against the lending entity, in addition to lien rights.

These are only some of the differences between Idaho lien laws and the lien laws of surrounding states.  Just as with any other business, construction contractors and material suppliers are in business to get paid for their work. 

The lien laws of the various states provide one of the best ways to ensure payment for work performed.  Prior to commencing a project in another state, become familiar with that state's laws so you can protect your business' ability to get paid.

Jonathan R. Bauer is an associate with the law firm Meuleman Mollerup LLP, practicing in the areas of business law (mergers/acquisitions/sales, financing, general corporate counseling), real estate law, business succession planning and estate planning.  Mr. Bauer can be reached at 208.342.6066 or This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .  More information is available at www.lawidaho.com.