Resources

Client Alerts, News Articles, Blog Posts, & Multimedia

Everything you need to know about BMD and the industry.

Ohio Senate Bill 49 – Ohio Expands Lien Rights for Design Professionals

Client Alert
October 20, 2021

Ohio Grants Long Awaited Lien Rights to Design Professionals

Effective September 30, 2021, Ohio granted limited lien rights to design professionals, including architects, landscape architects, engineers, and surveyors.

Ohio Governor Mike DeWine signed Senate Bill 49 into law on July 1, 2021. This new law established a statutory right to lien commercial real estate by Ohio design professionals who, until now, could not file a lien for non-payment of professional services.

Senator Vernon Sykes, a primary sponsor of Senate Bill 49, stated that the “legislation ensures that architects, engineers and other designers will get paid for their work, regardless of the outcome of their projects . . . It will support hardworking Ohioans by protecting the value of their labor . . ..”[1]

In What Circumstances Does a Design Professional Have Lien Rights?

Design professional lien rights only apply to private, commercial real estate projects. Single family residential projects and public projects are specifically excluded in Senate Bill 49. To be eligible for lien protection, the design professional must have a written contract with the commercial owner of the property interest that is signed by both parties. Lien protection is not available for the design professional’s employees, agents, or independent contractors. The lien amount is limited to the amount due to the design professional under the written contract. Therefore, it will be important to obtain signed, written authorization for additional and supplemental services, as well as base contract services.

How Do I Perfect My Lien?

To perfect the lien, the design professional must record a signed and notarized affidavit in the county where the commercial real estate is located. The affidavit must list:

  1. the name of the design professional;
  2. the name of the owner of interest in the commercial real estate;
  3. the name of the record owner of the commercial real estate if different than the owner of interest;
  4. a legal description of the commercial real estate sufficient to reference the instrument by which the record owner took title and permanent parcel number, if any;
  5. the parties to and date of the contract;
  6. the amount of the design professional’s claim under the contract; and
  7. a statement that the information is true and accurate to the knowledge of the design professional.

Within 30 days after recording the lien, the affidavit must be served upon all parties listed on the affidavit by a delivery method that provides proof of receipt. Although failure to serve will not invalidate the lien, it does allow the court to consider equitable remedies for such failure.

How Do I Enforce My Lien?

The design professional holding a perfected lien on commercial real estate may commence proceedings to enforce the lien by filing a complaint in the county where the commercial real estate is located naming all parties with an interest in the commercial real estate. The design professional’s lien is subordinate to any other valid liens, regardless of recordation date, and all previously recorded mortgages and liens. Because all other valid liens take priority over the design professional lien, collection on the lien may be challenging if there is limited equity possessed by the Owner. The design professional must commence proceedings to enforce the lien within two years, or within 60 days of receiving a Demand to Commence Suit. Otherwise, the lien is extinguished by operation of law.

Satisfying the Lien

Any person with an interest in commercial real estate that was subject to the lien or named in the affidavit may record an affidavit stating that the underlying lien was satisfied or that it was released by operation of law. The release of a lien does not affect the ability of the design professional to assert any other claim or appropriate action, including a claim for breach of contract. The lien may also be removed by filing a request to substitute financial security for the lien with the Court of Common Pleas in the county where the lien was recorded. The substitute security must be an amount equal to the design professional’s claim in a form such as an escrow account or surety bond held by the Clerk of Courts or other party determined adequate by the court. On approving such, the court shall direct the lien to be released.

Although not as robust as the lien rights of mechanic’s lien or judgment lien claimants, Senate Bill 49 provides design professionals with a relatively simple way to assert a lien against commercial real estate in order to compel payment of past due amounts for services rendered. It is expected that these lien rights would only be used as a last resort after all other reasonable efforts to secure payment have been exhausted.

For more information on design professional lien rights, please contact Construction Law Member Bob Hager at rahager@bmdllc.com or Attorney Abigail Peabody at aepeabody@bmdllc.com.

[1] https://ohiosenate.gov/senators/sykes/news/sykes-payment-assurance-legislation-for-design-professionals-signed-into-law

Construction LawRobert A. HagerAbigail Peabody
Client Alert

IMPORTANT UPDATE: IRS Opens Portals for Advanced Child Tax Credit Payments 2021

May 20, 2021The American Rescue Plan Act (the “Act”) expands the Child Tax Credit for tax year 2021. In addition to expanding the Child Tax Credit, the Act provides for advance payments of the 2021 Child Tax Credit. Beginning in July, the IRS will automatically send Advanced Child Tax Credit payments to eligible taxpayers based on their 2020 tax return (or 2019 tax return if the 2020 tax return has not been filed and processed yet). The amount of the advanced payment will be up to $300 each month for each qualifying child under 6 years old at the end of 2021 and $250 each month for each qualifying child between 6 and 17 years old at the end of 2021. For example, if you have 2 qualifying children, one 4 years old and one 8 years old, you may receive up to $550 each month in advance child tax credit payments.Client Alert

Employment Law After Hours: CDC SAYS NO MORE MASKS FOR VACCINATED PEOPLE: What does this mean for employers and employees?

May 17, 2021This morning, ELAH published an emergency episode discussing the questions employers sent us since the CDC’s release of its revised mask guidance late last week. This episode explores questions such as whether an employer can allow vaccinated people to go without masks, while requiring unvaccinated people to wear a mask, whether employers can inspect an employee’s vaccine card, and it discusses the risks of liability an employer faces based on the decisions and policies it makes following the release of this CDC guidance, along with many other questions.Client Alert

COVID, Privacy and More! New Challenges for Physicians in 2021

May 12, 2021While hopefully we are coming out of the pandemic, the legal repercussions related to legislative initiatives and other actions during that time continue to apply to businesses in general and healthcare practices. It is a helpful reminder that practices make certain that they maintain accurate records in order to satisfy the reporting requirements under the various COVID-related bills and protect yourself from future employment claims.Client Alert

Banking and Cannabis: Bank Lending, The Next Frontier

May 10, 2021A fortuitous combination of developments and circumstances present the banking and cannabis industries a large opportunity to enhance each of their respective bottom lines: conventional bank lending, payment processing, treasury management and other services, and bank administered SBA and revenue bond financing to cannabis businesses.Client Alert

EKRA Updates: COVID-19 Testing, Employment Agreements, and More

May 7, 2021Ever since the Eliminating Kickbacks in Recovery Act (“EKRA”) was passed by Congress in 2018, we have been waiting to see how the law is interpreted and ultimately enforced. As a reminder, EKRA seeks to eliminate kickbacks in return for patient referrals to facilities that treat those overcoming addiction, such as recovery homes, clinical treatment centers, and laboratories. (NOTE: EKRA applies to all laboratories, not just those related to addiction treatment.) It is essentially an expansion of the Anti-Kickback Statute, which only applies to those services that are reimbursable through federal healthcare programs such as Medicare and Medicaid, to now also cover services reimbursable through private insurers.
Older posts
Newer posts