alabama construction law
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alabama construction law

VII. Alabama Lien Law

  1. What Items are Lienable?

    1. Generally

      ALABAMA CODE 35-11-210 provides that a lien can be claimed for work, labor or material constituting an improvement. The scope of the term "improvement" is left for determination on a case by case basis. Bates v. Harte, 26 So. 898 (1899). See also Mazel v. Bain, 133 So.2d 44 (1961). Courts are guided by the idea that a claimant's right to lien depends upon the services rendered, not upon the title or classification of the claimant. Guaranty Pest Control v. Commercial Inv. & Dev. Corp., 264 So.2d 163 (1972).

      Work performed by clearing, grading or excavating real property is considered a permanent improvement and is, therefore, lienable. Mazel v. Bain, 133 So.2d 44 (1961). An architect who prepares drawings and supervises work is also permitted to claim a lien. Hughes v. Torgerson, 11 So. 209 (1892). Construction of a coal mine and the supply of coal cars are also considered lienable. Central Trust Co. v. Sheffield & B. Coal Iron & Ry., 42 F. 106 (N.D. Ala. 1890).

      The foregoing examples illustrate the lienability of work, labor, or materials furnished on the site or premises. A question that often arises, however, is whether work, labor, and materials manufactured or performed off site for materials that are to be incorporated into the improvement on site are also lienable. Alabama case law establishes that, in order to claim a lien for these "off site" items, it is necessary that the materials are furnished and the labor is performed on something that attaches to and becomes a part of the land, thereby substantially adding to its value. Waid v. Glencoe Lumber Co., 103 So.2d 730 (Ala. 1958). Thus, work performed on materials furnished for fabrication off site of components or equipment to be used on site should be subject to a lien.

      Below Alabama courts have addressed other types of work as they relate to the availability of liens:

      • The preparation of a surveyor's map and the placing of stakes on the ground to mark the boundary lines of lots and streets according to such map are not considered lienable services. Wilkinson v. Rowe, 98 So.2d 435 (1957).
      • A trade fixture, such as a printing press that can be easily removed, is not an improvement to land and, therefore, a mechanic's lien will not attach to such a "trade fixture." Forbes v. Alabama Machinery & Supply Co., 58 So. 398 (Ala. 1912).
      • Pest control services are not a lienable contribution. Guaranty Pest Control, Inc. v. Commercial Inv. & Dev. Corp., 264 So.2d 163 (1972).
      • Certain kinds of air conditioning systems are not considered to be trade fixtures and the contribution of labor to them may give rise to a claim of mechanic lien. Silverman v. Mazer Lumber & Supply Co., 42 So.2d 252 (1945).
      • Over the course of construction, an owner may frequently request the contractor to perform work that has various worth or work that adds to the scope of work contemplated in the original contract. The contribution of such "extras" is typically treated as a contribution under the original contract and, consequently, is lienable. Wade v. Wyker, 55 So. 141 (1911).

      Regarding damages, an issue in Alabama law is whether a lien claimant may obtain consequential damages such as delay or lost profit. The writer is not aware of any Alabama case addressing the question. However, considering that Alabama courts have extended lien coverage to interest and attorney fees, if the lien claimant's contract unambiguously provides for such items, the claimant could argue that the lien should cover consequential damages.

  2. Types of Liens:

    The Alabama Mechanics Lien Statute provides for two types of liens: an "unpaid balance" and a "full price" lien.

    1. Unpaid Balance Lien:

      Alabama Code 35-11-210 provides for an unpaid balance lien as follows:

      Every mechanic, person, firm or corporation who shall do or perform any work, or labor upon, or furnish any material, fixture, engine, boiler, waste disposal service and equipment or machinery, for any building or improvement on land, or for repairing, altering or beautifying the same, under or by virtue of any contract with the owner or proprietor thereof, or his agent, architect, trustee, contractor or subcontractors, upon complying with the provisions of this division, shall have a lien therefore on such building or improvements on land on which the same is situated...A lien shall extend only to the amount of any unpaid balance due the contractor by the owner or proprietor, and the employees and materialmen shall also have a lien on the unpaid balance.

    2. Full Price Lien.

      Alabama Code 35-11-210 also provides for a full price lien as follows:

      But if the person, firm or corporation, before furnishing any material, shall notify the owner or his agent in writing that certain specified material will be furnished by him to the contractor or subcontractor for use in the building or improvements on the land of the owner or proprietor at certain specified prices, unless the owner or proprietor or his agent objects thereto, the furnisher of such material shall have the lien for the full price thereof. . . .

      The "full price" lien is based on the existence of either an express or implied contract of the owner to pay for materials. Richard v. Little, 96 So. 114 (ala. 1923). The contract need not be in writing. Sherrod v. Crane Co., 182 So. 48 (ala. 1938). The contract may be implied from the owner's silence following receipt of notice from the materialman. Buettnerbros. v. Good Hope Missionary church, 18 So.2d 75 (Ala. 1944). The statute appears to make the "full price" lien by advance notice available only to materialmen and not to those applying labor and services. Crane Co. v. Sheraton Apartments, Inc., 58 So.2d at 616 (Ala. 1952).

  3. Procedure for Perfecting Liens.

    1. Full Price Liens.

      1. The Preliminary Notice.

        Materialmen, not having a direct contract with the owner but who are instead suppliers to a general contractor or a subcontractor, must serve notice on the owner in order to obtain a "full price lien". The Alabama Code Section 35-11-210 (1975) provides an example form. However, the notice incorporated into the statute is inconsistent with the express provisions of the statute. The statute clearly states that the notice must show that "certain specified material" will be furnished at "certain specified prices." Nevertheless, some court s have held that the statutory form is sufficient. Avondale Lumber Co. v. Hudson, 106 So. 803 (Ala. 1926); Tisdale v. Alabama & Georgia Lumber Co., 31 So. 29 (Ala. 1902).

        More recently, Alabama courts have begun a shift toward enforcing the specific requirements of the statute. Kilgore v. First Assembly of God Church, Inc., 477 So.2d 300 at 302 (Ala. 1985). In Kilgore, the court found a preliminary notice insufficient, in part, because it failed to list "certain specified prices" as required by Ala. Code 35-11-210. In 1991, the Alabama Supreme Court continued its shift toward enforcing the literal provisions of the statute by stating that

        [the Contract] used the form suggested by the statute, but did not specify prices as required by the text of 35-11-210. However, we can decide this case without deciding the particular issue of whether the language of the text or the language of the form controls. Nevertheless, we fell it will be helpful to the bench and bar, as well as suppliers of materials and labor, to note that a mechanic's lien for the full price of materials or labor supplied arises from an expressed or implied contract between the supplier and the owner to supplied purchase material or labor...If the notice is to be deemed a contract purchase between the owner and the supplier, it must contain all of the terms to which the supplier, it must contain all of the terms to which the supplier wishes to hold the owner; i.e., it should contain a statement of the material to be furnished, the price thereof, and any credit terms that may be included in the contract between the supplier and the purchaser of materials or labor-the general contractor or subcontractor.

        Davis v. Gobble-Fit Lumber Co., 592 So.2d 202 (Ala. 1991). The statute requires that the notice be given prior to materialmen furnishing any material; however, the statute does not indicate how much advance notice should be given. Reasonable advance notice is implied from the fact that the owner is given the opportunity to object to the notice before the material is used. An original contractor is not required to provide this notice.

      2. Notice of Intent.

        See the discussion under the unpaid balance lien section.

      3. Verified Statement of Lien.

        See the discussion of verified statement of lien under the unpaid balance lien section below.

    2. Unpaid Balance Liens.

      1. Preliminary Notice.

        Unpaid balance lien claimants need not provide the owner with a preliminary notice prior to supplying material.

      2. Notice Of Intent.

        All lien claimants, except an original contractor must give notice prior to filing a verified statement of lien. The notice must be given in writing to the owner stating that a lien is claimed, setting forth the amount and the subject of the lien, and the person or entity from whom it is owning. Ala. Code 35-11-218. This same notice must be given to the general contractor and the construction lender. Payvee Mortgage Co. v. Gobble-Fite Lumber Co., Inc., 565 So.2d 138 (Ala. 1990). The purpose of this notice is to allow the owner to take appropriate action in the disbursement of the remaining funds to the general contractor to ensure that the potential lienors are satisfied and that the property is not encumbered. Hubbard, A Current Overview of Alabama's Mechanic's and Materialman's Lien Law, 49 Alabama Lawyer, 203, 205 (1988). The notice also protects the owner in compliance with the requirement of the statute. Rawls Warehouse, Inc. v. Jackson, 383 So.2d 152 (Ala. 1980).

        Failure to give the notice of the claimed lien to the owner prior to the filing of the verified statement of lien invalidates the lien. Buckner v. Alfa Lumber & Supply co., 628 So.2d 450 (Ala. 1993). The only timing provision for this notice is that it be given before the filing of a verified statement of lien. Ala. Code 35-11-218.

      3. Verified Statement of Lien.

        Ala. Code 35-11-213 sets forth a statutory form for a verified statement of lien. The strict use of this statutory form is not necessary as long as the form used is in substantial compliance with Alabama Code 35-11-213. Harper v. J&C Trucking and Excavating Co., 374 So.2d 886 (ala. Civ. App. Ct. 1979). But see Hill v. Hill, 2000 UL 27330 at 12 (Ala. Civ. App. 2000) (merely filing a lease agreement was not sufficient to allow enforcement of lien). Generally, the verifying statement must set forth the amount of the demands secured by the lien, contain a description of the property on which the lien claims, and the name of the owner or proprietor of the land. Ala. Code 35-11-2133.

        The verification must be made on the affiant's personal knowledge. An oath "to the best of affiant's knowledge and belief" is not a verification of the truth of the facts and does not comply with the statute. Globe Iron Roofing and Corrugating Co. v. Thatcher, 6 So. 366 (ala. 1889). But see Firestone v. Howell, 582 So.2d 1113 (Ala. 1991), allowing an attorney to sign on behalf of client.

        The statute requires that the verified statement accurately describe the property upon which lien is sought to be perfected. The extent of the description required by Courts seems to vary on a case by case basis. (See Ala. Code 35-11-213 providing that the description shall be "in such a manner that the same may be located or identified, a description by house number, name the street, and name of the city or town being a sufficient description where the property is located in a city or town.) Lien claimants will be well advised to describe the property at issue as accurately as possible.

        1. City or Town. When the land at issue is located within a city or town, the lien extends to all the right, title and interest of the owner and "to the extent any of the entire lot or parcel of land in a city or town..." Ala. Code 35-11-210. As mentioned above, the statute specifically provides that with regard to such property, "a description by house number, name of street, and name of city or town" is sufficient. Ala. Code 35-11-213.
        2. Not in City or Town. Property located outside the city or town may be liened not only with respect to the building improvements and the land on which such is situated, but also to "one acre in addition to the land upon which the building or improvement is situated..." Ala. Code 35-11-210.
        3. Statement of Lien. A verifying statement of lien must be filed in the office of the Judge of Probate of the county where the subject property is located. Ala. Code 35-11-213. When the property is located in more than one county, the verified statement must be filed in each county where the land is located.
        4. Timing. Ala. Code 35-11-215 sets forth various time periods for different lienors to file a verified statement depending on the status of each lienor.
        5. Laborers. Must file the verified statement within 30 days of the last labor provided on the project. Ala. Code 35-11-215 (1975).
        6. Original Contractors. Original contractors must file the verified statement of lien within six months after the last of item of work has been furnished. Ala. Code 35-11-215 (1975). A "full price" lien claimant is considered an original contractor within this provision and therefore has six months from the furnishing of the last item of work or material within which to file its verified statement. Southern Sash of Huntsville, Inc. v. Jean, 235 So.2d 842 (Ala. 1970).
        7. Every Other Person. Every other lien claimant must file its verified statement of lien within four (4) months after the last item of work or material has been performed or furnished. Ala. Code 35-11-215 (1975).