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H. B. No. 514As IntroducedAs Introduced
124th General Assembly | Regular Session | 2001-2002 |
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REPRESENTATIVE Seitz
A BILL
To amend sections 1311.01, 1311.04, 1311.19, and
1311.25 of the Revised
Code to expand the time
within which lien rights of
subcontractors and
materials suppliers are
preserved under the
Mechanic's Lien Law when a
timely notice of
commencement is not filed by the
owner of an
improvement, and to establish new
criteria for
determining whether a notice,
affidavit, or other
document has been served as
required under that
law.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 1311.01, 1311.04, 1311.19, and
1311.25 of the Revised
Code be amended to read as follows:
Sec. 1311.01. As used in sections 1311.01 to 1311.22 of
the
Revised Code: (A) "Owner," "part owner," or "lessee" includes all the
interests either legal or equitable, which such person may have
in
the real estate upon which the improvements are made,
including
the interests held by any person under contracts of
purchase,
whether in writing or otherwise. (B) "Materialman"
or "material supplier" includes any person
by whom
any materials are furnished in furtherance of an
improvement. (C) "Laborer" includes any mechanic,
workman
worker,
artisan,
or
other individual who performs labor or work in
furtherance of any
improvement. (D) "Subcontractor" includes any person who undertakes to
construct, alter, erect, improve, repair, demolish, remove, dig,
or drill any part of any improvement under a contract with any
person other than the owner, part owner, or lessee. (E) "Original contractor," except as otherwise provided in
section 1311.011 of the Revised
Code, includes a
construction
manager and any person who undertakes to construct,
alter, erect,
improve, repair, demolish, remove, dig, or drill
any part of any
improvement under a contract with an owner, part
owner, or lessee. (F) "Construction manager" means a person with substantial
discretion and authority to manage or direct an improvement,
provided that the person is in direct privity of contract with
the
owner, part owner, or lessee of the improvement. (G) "Notice of commencement" means the notice specified in
section 1311.04 of the Revised Code. (H) "Notice of furnishing" means the notice specified in
section 1311.05 of the Revised Code. (I) "Materials" means all products and substances
including,
without limitation, any gasoline, lubricating oil,
petroleum
products, powder, dynamite, blasting supplies and other
explosives, tools, equipment, or machinery furnished in
furtherance of an improvement. (J) "Improvement" means constructing, erecting, altering,
repairing, demolishing, or removing any building or appurtenance
thereto, fixture, bridge, or other structure, and any gas
pipeline
or well including, but not limited to, a well drilled or
constructed for the production of oil or gas; the furnishing of
tile for the drainage of any lot or land; the enhancement or
embellishment of real property by seeding, sodding, or the
planting thereon of any shrubs, trees, plants, vines, small
fruits, flowers, or nursery stock of any kind; and the grading or
filling to establish a grade. (K) "Wages" means the basic hourly rate of pay and all
other
contractually owed benefits.
Sec. 1311.04. (A)(1) Prior to the performance of any
labor
or work or the furnishing of any materials for an
improvement on
real property which may give rise to a mechanics'
lien under
sections 1311.01 to 1311.22 of the Revised Code, the
owner, part
owner, or lessee who contracts for the labor, work,
or materials
shall record in the office of the county recorder
for each county
in which the real property to be improved is
located a notice of
commencement in substantially the form
specified in division (B)
of this section. (2) Only one notice of commencement is required to be
filed
for a single improvement and if more than one notice of
commencement is filed for a single improvement, all notices filed
after the original notice shall be deemed to be amendments to the
original notice. If an owner, part owner, or lessee contracts
with additional original contractors, lenders, or sureties not
identified in the original notice of commencement filed for the
improvement, the owner, part owner, or lessee shall amend the
original notice of commencement to identify the additional
original contractors, lenders, and sureties. The date of the
filing of the amended notice is the date of the filing of the
original notice of commencement. (B) The notice of commencement required under division (A)
of this section shall contain, in affidavit form, all of the
following information: (1) The legal description of the real property on which
the
improvement is to be made. For purposes of this division, a
description sufficient to describe the real property for the
purpose of conveyance, or contained in the instrument by which
the
owner, part owner, or lessee took title, is a legal
description. (2) A brief description of the improvement to be performed
on the property containing sufficient specificity to permit lien
claimants to identify the improvement; (3) The name, address, and capacity of the owner, part
owner, or lessee of the real property contracting for the
improvement; (4) The name and address of the fee owner of the real
property, if the person contracting for the improvement is a land
contract vendee or lessee; (5) The name and address of the owner's, part owner's, or
lessee's designee, if any; (6) The name and address of all original contractors,
except
that if the notice of commencement is recorded for an
improvement
involving a single- or double-family dwelling and if
more than one
original contractor is involved, instead of listing
each original
contractor, the owner shall state that multiple
original
contractors are involved in the improvement; (7) The date the owner, part owner, or lessee first
executed
a contract with an original contractor for the
improvement; (8) The name and address of all lending institutions which
provide financing for the improvements, if any; (9) The name and address of all sureties on any bond which
guarantee payment of the original contractor's obligations under
the contract for the improvement, if any; (10) The following statement: "To Lien Claimants and Subsequent Purchasers: Take notice that labor or work is about to begin on or
materials are about to be furnished for an improvement to the
real
property described in this instrument. A person having a
mechanics' lien may preserve the lien by providing a notice of
furnishing to the above-named designee and
his
the above-named
designee's original contractor, if any, and by timely recording an
affidavit pursuant to section 1311.06 of the Revised Code. A copy of this notice may be obtained upon making a written
request by certified mail to the above-named owner, part owner,
lessee, designee, or the person with whom you have contracted." (11) The name and address of the person preparing the
notice; (12) An affidavit of the owner, part owner, or lessee or
the
agent of the owner, part owner, or lessee which verifies the
notice. (C) If the notice of commencement furnished by or for an
owner, part owner, or lessee contains incorrect information, the
owner, part owner, or lessee is liable for any loss of lien
rights
of a lien claimant and any actual expenses incurred by the
lien
claimant in maintaining lien rights, including attorney's
fees, if
the loss and expenses incurred are a direct result of
the lien
claimant's reliance on the incorrect information. Any lien claimant who has included incorrect information in
his
the claimant's affidavit for a lien under section 1311.06 of
the Revised
Code, as a result of incorrect information contained
in the
notice of commencement, may file for record an amended
affidavit
for a lien. The amended affidavit shall contain all of
the
information required by section 1311.06 of the Revised Code
for
an original affidavit. The lien claimant shall serve a copy
of
the amended affidavit on the owner, part owner, or lessee as
provided in section 1311.07 of the Revised Code. The lien
claimant may file the amended affidavit for record at any time
during the time that the lien acquired by the original affidavit
continues in effect under section 1311.13 of the Revised Code.
In
no event shall the amended affidavit extend such time period.
The
filing of an amended affidavit does not constitute a waiver
of the
rights granted by this division. (D) Within ten days after the date a subcontractor,
materialman
material supplier, or laborer serves a written
request
upon the owner,
part owner, or lessee, or designee for a
copy of
the notice of
commencement, the owner, part owner, lessee,
or
designee shall
serve a copy of the notice of commencement to
the
requesting
subcontractor,
materialman
material supplier, or
laborer. (E) Within ten days after the date a subcontractor,
materialman
material supplier, or laborer serves a written
request
for a copy of
the notice of commencement upon the original
contractor who has
been provided with a notice of commencement
from the owner, part
owner, or lessee, or designee and with whom
the subcontractor,
materialman
material supplier, or laborer has
a
direct contract,
the original contractor shall serve a copy of
the
notice of commencement to
the requesting subcontractor,
materialman
material supplier, or
laborer. (F) Within ten days after the date a subcontractor,
materialman
material supplier, or laborer serves a written
request
for a copy of
the notice of commencement upon the
subcontractor
who has been
provided with a notice of commencement
from the
owner, part
owner, lessee, designee, or original
contractor and
with whom the
subcontractor,
materialman
material
supplier, or
laborer has a
direct contract, the
subcontractor
shall serve a
copy of the notice of commencement
upon the
requesting
subcontractor,
materialman
material supplier,
or
laborer. (G)(1) Except as provided in division (G)(2) of this
section, the owner, part owner, lessee, or designee shall post
and
maintain posted a copy of the notice of commencement in a
conspicuous place on the real property described in the notice
during the course of the actual physical improvement to the real
property. (2) No owner, part owner, lessee, or designee, has to post
a
copy of the notice of commencement on the real property
described
in the notice for an improvement that is the subject of
a home
purchase contract. (H) The owner, part owner, lessee, or designee shall serve
a
copy of the notice of commencement upon the original
contractor.
If the owner, part owner, lessee, or designee fails
to serve a
copy of the notice of commencement upon the original
contractor,
the owner, part owner, or lessee is liable to the
original
contractor for all actual expenses incurred by the
original
contractor in obtaining the information otherwise
provided by the
notice of commencement. (I) If the owner, part owner, lessee, or designee fails to
record the notice of commencement in accordance with this
section,
the time within which a subcontractor or
materialman
material
supplier may serve a notice of furnishing as required by section
1311.05 of
the Revised Code is extended until twenty-one days
after the
notice of commencement has been recorded.
A
subcontractor or material supplier need not serve a notice of
furnishing to preserve lien rights for the period before the
notice of
commencement is recorded. (J) If the owner, part owner, lessee, or designee fails to
serve, upon written request, the notice of commencement in
accordance with this section, the time within which a
subcontractor or
materialman
material supplier may serve a notice
of furnishing as
required by section 1311.05 of the Revised Code
is extended until
twenty-one days after the notice of commencement
actually has
been served to the subcontractor or
materialman
material supplier.
The owner, part
owner, or lessee who fails to
serve the notice pursuant to this
section is liable to any
subcontractor or
materialman
material supplier who becomes
a lien
claimant for all actual expenses incurred by the lien
claimant in
obtaining the information that would have been
contained in the
notice. (K) If an owner, part owner, lessee, or designee fails to
post or maintain a copy of the notice of commencement as required
by division (G)(1) of this section, the owner, part owner, or
lessee is liable to a subcontractor,
materialman
material
supplier,
or laborer who
becomes a lien claimant for all actual
expenses incurred by the
lien claimant in obtaining the
information otherwise provided by
the posting. (L) If an original contractor or subcontractor who has
been
provided with a notice of commencement fails to serve a copy
of
the notice of commencement to any subcontractor,
materialman
material supplier, or laborer who requests it, the original
contractor or
subcontractor who fails to serve the copy of the
notice is liable
to the subcontractor,
materialman
material
supplier, or laborer who
made the
request for all costs incurred
by the subcontractor,
materialman
material supplier, or laborer
in
obtaining the information contained in
the notice
of
commencement,
provided that an original contractor or
subcontractor who fails to
provide the notice upon request is not
liable under this division
to any subcontractor,
materialman
material supplier, or laborer
with whom
he
the original
contractor or subcontractor is not in
direct privity of contract. (M)(1) If after the first work, labor, or material has
been
performed on or furnished to the improvement, the owner,
part
owner, lessee, or designee fails to serve, record, or post a
notice of commencement as required by this section, the original
contractor may, in writing, request the owner, part owner,
lessee,
or designee to serve, record, or post the notice. If an
owner,
part owner, lessee, or
his
the designee
of an owner,
part owner,
or lessee fails or refuses to
serve, record, or post a notice of
commencement within ten days
of receipt of a request, the owner,
part owner, or lessee is
liable for
his
the owner's, part owner's,
or lessee's failure or
refusal and for the designee's failure
or
refusal, without recourse to the original contractor for all
damages, costs, and expenses which result from the filing of a
valid mechanics' lien to the extent that the lien, damages,
costs,
and expenses could have been avoided through proper
payment. (2) Nothing in this division shall be interpreted as to
either of the following: (a) Relieving an original contractor from
his
the duty to
pay
his
the original contractor's subcontractors,
materialmen
material suppliers, and laborers for labor or work
performed or
materials furnished pursuant to a contract directly
with the
original contractor; (b) Obligating an owner, part owner, or lessee to pay for
work or labor performed or materials furnished by subcontractors,
materialmen
material suppliers, or laborers pursuant to direct
contracts with the
original contractor. (N)(1) If the owner, part owner, or lessee fails to record
a
notice of commencement or an amended notice, any person holding
a
mortgage on the real property to be improved may record a
notice
of commencement or an amended notice on behalf of the
owner, part
owner, or lessee. If the owner, part owner, or
lessee fails to
record a notice of commencement or an amended
notice within the
later of ten days after the performance of any
labor or work or
the furnishing of any material for an
improvement on real property
which gives rise to a mechanics'
lien under sections 1311.01 to
1311.22 of the Revised Code or
three days after service of a
demand to record the notice or
amended notice by the original
contractor, the original
contractor may record a notice of
commencement or an amended
notice on behalf of the owner, part
owner, or lessee. (2) If the original contractor or a mortgage holder has
recorded a notice of commencement or an amended notice on behalf
of the owner, part owner, or lessee, the owner, part owner, or
lessee is liable to the original contractor or mortgage holder
for
all costs and expenses incurred in obtaining the information
contained in the notice of commencement or an amended notice and
all costs incurred in the preparation and recording of the notice
of commencement or an amended notice. (3) Unless required to file the notice of commencement or
an
amended notice on behalf of the owner, part owner, or lessee,
the
party filing a written notice of commencement or amended
notice on
behalf of the owner, part owner, or lessee is not
liable to the
owner, part owner, or lessee for any errors
contained in the
notice of commencement or amended notice. (4) If a mortgage holder or an original contractor records
a
notice of commencement or amended notice on behalf of an owner,
part owner, or lessee, such fact must be included on the notice
or
amended notice. (O) This section does not apply to any improvement made
pursuant to a home construction contract as defined in section
1311.011 of the Revised Code. (P) The county recorder of the county where a notice of
commencement is filed for record shall endorse the date and hour
of its filing and cause it to be recorded as mechanics' liens are
recorded, and collect the same fees for recording the notice of
commencement as are provided in section 317.32 of the Revised
Code. The recorder shall index the real property described in
the
notice of commencement and shall index the names of all
owners,
part owners, lessees, and land contract vendees in the
direct
index and the names of all original contractors in the
reverse
index as provided for in section 317.18 of the Revised
Code. (Q) Notwithstanding this section, if the owner, part
owner,
or lessee is a telephone company, an electric light
company, a gas
company, a water works company, all as defined in
section 4905.03
of the Revised Code, or a subsidiary or affiliate
thereof, the
owner, part owner, or lessee may, but is not
required to, record a
notice of commencement pursuant to division
(A) of this section,
and is not required to serve, post, and
provide copies of a notice
of commencement pursuant to divisions
(D), (G), and (H) of this
section unless such owner, part owner,
or lessee elects to record
the notice of commencement. If the
owner, part owner, or lessee
elects to record the notice of
commencement and the improvement
extends beyond one parcel of
real property or one county, the
owner, part owner, or lessee
may, in lieu of using the legal
description required in division
(B)(1) of this section, use a
description which reasonably
describes the real property on which
the improvement is to be
made. Any description used other than
the description specified
in division (B)(1) of this section shall
refer to the township
and county in which the improvement is
located, the name and
route number of any local, state, or federal
highway near the
improvement, if any, the post office address of
the real
property, if any, and the name by which the owner, part
owner, or
lessee refers to the improvement. If an owner, part owner, or lessee elects not to record,
serve, post, or provide copies of a notice of commencement
pursuant to divisions (A), (D), (G)(1), and (H) of this section,
he
the owner, part owner, or lessee is subject to all applicable
liabilities pursuant to divisions
(C), (H), (J), (K), (M), and (N)
of this section. (R) If an owner, part owner, lessee, or designee fails to
record a notice of commencement in accordance with this section,
no subcontractor or
materialman
material supplier who performs
labor or work upon
or furnishes material in furtherance of that
improvement has to
serve a notice of furnishing in accordance with
section 1311.05
of the Revised Code in order to preserve
his
the
subcontractor's or material supplier's lien rights.
Sec. 1311.19. (A) Except as otherwise provided in section
1311.11 of the Revised Code
and division (C) of this section, any
notice, affidavit, or other
document required to be served under
this chapter shall be served
by one of the following means: (1) The sheriff of the county in which the person to be
served resides or maintains
his
the person's principal place of
business, in
one or more of the methods provided in the Ohio Rules
of Civil
Procedure. The sheriff may charge reasonable fees for
such
service. (2) Certified or registered mail, overnight delivery
service, hand delivery, or any other method which includes a
written evidence of receipt; (3) The means provided in division (H) of section 1701.07
of
the Revised Code, if the person is a corporation. (B) For purposes of this chapter, service is complete upon
receipt by the party being served except as provided in division
(H) of section 1701.07 of the Revised Code and except, for the
purposes of sections 1311.05 and 1311.261 of the Revised Code, if
service of a notice of furnishing is made by certified mail,
service is complete on the date of the mailing. If the service
is
attempted upon an owner, part owner, or lessee, or designee,
at
the address contained in the notice of commencement required
by
section 1311.04 of the Revised Code, and if the notice,
affidavit,
or other document is returned unclaimed or refused,
service is
complete when first attempted.
(C) A notice, affidavit, or other document required to be
served under this chapter is considered served, whether or not the
notice, affidavit, or other document was served by the means
described in divisions (A)(1) to (3) of this section, and service
is complete on the date the notice, affidavit, or other document
is received, if either of the following is true regarding the
notice, affidavit, or other document: (1) The person served acknowledges receipt of the notice,
affidavit, or other document. (2) It can be proved by a preponderance of evidence that the
person being served actually received the notice, affidavit, or
other document. A notice, affidavit, or other document to which this division
applies is presumed to have been received three days after the
date of the mailing of the notice, affidavit, or other document,
unless
a written acknowledgement, receipt, or other evidence
provides proof to the
contrary.
Sec. 1311.25. As used in sections 1311.25 to 1311.32 of
the
Revised Code: (A) "Public improvement" means any construction,
reconstruction, improvement, enlargement, alteration, demolition,
or repair of a building, highway, drainage system, water system,
road, street, alley, sewer, ditch, sewage disposal plant, water
works, and any other structure or work of any nature by a public
authority. (B) "Public authority" includes the state, and a county,
township, municipal corporation, school district, or other
political subdivision of the state, and any public agency,
authority, board, commission, instrumentality, or special
district
of or in the state or a county, township, municipal
corporation,
school district, or other political subdivision of
the state, and
any officer or agent thereof. (C) "Materialman"
or "material supplier" includes any person
by whom
any materials are furnished in furtherance of a public
improvement. (D) "Laborer" includes any mechanic,
workman
worker,
artisan,
or
other individual who performs labor or work in
furtherance of any
public improvement. (E) "Subcontractor" includes any person who undertakes to
construct, alter, erect, improve, repair, demolish, remove, dig,
or drill any part of any public improvement under a contract with
any person other than the public authority. (F) "Principal contractor" includes any person who
undertakes to construct, alter, erect, improve, repair, demolish,
remove, dig, or drill any part of any public improvement under a
contract with a public authority. (G) "Materials" means all products and substances
including,
without limitation, any gasoline, lubricating oil,
petroleum
products, powder, dynamite, blasting supplies and other
explosives, tools, equipment, or machinery furnished in
furtherance of a public improvement. (H) "Wages" has the same meaning as "prevailing wage" in
division (E) of section 4115.03 of the Revised Code. (I) "Notice of commencement" means the notice specified in
section 1311.252 of the Revised Code. (J) "Notice of furnishing" means the notice specified in
section 1311.261 of the Revised Code.
Section 2. That existing sections 1311.01, 1311.04, 1311.19,
and 1311.25 of the
Revised Code are hereby repealed.
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