Subchapter II. Subcontractor’s Lien.

§ 40–303.01. Subcontractor’s lien — generally.

Any person directly employed by a contractor described by § 40-301.01 (any such contractor also referred to herein as original contractor), whether the person is a subcontractor, materialman, or laborer, to furnish work or materials for the completion of the project, shall be entitled to the same rights and subject to the same obligations as the original contractor under this chapter, subject to the conditions and limitations set forth in this chapter.

(Mar. 3, 1901, 31 Stat. 1384, ch. 854, § 1239; June 25, 1936, 49 Stat. 1921, ch. 804; June 25, 1948, 62 Stat. 991, ch. 646, § 32(b); May 24, 1949, 63 Stat. 107, ch. 139, § 127; July 5, 1966, 80 Stat. 265, Pub. L. 89-493, § 15(a); Mar. 19, 2002, D.C. Law 14-84, § 2(b), 49 DRC 198; Oct. 20, 2005, D.C. Law 16-31, § 2(d), 52 DCR 7195.)

Prior Codifications

1981 Ed., § 38-103.

1973 Ed., § 38-103.

Section References

This section is referenced in § 47-2883.03.

Effect of Amendments

D.C. Law 14-84 rewrote the section, which had read:

“Any person directly employed by the original contractor, whether as subcontractor, materialman, or laborer, to furnish work or materials for the completion of the work contracted for as aforesaid, shall be entitled to a similar lien to that of the original contractor upon his filing a similar notice with the Recorder of Deeds of the District of Columbia to that above mentioned, subject, however, to the conditions set forth in this subchapter.”

D.C. Law 16-31 rewrote section, which had read as follows: “Any person directly employed by the original contractor, whether as subcontractor, materialman, or laborer, to furnish work or material for the completion of the work contracted for, shall be entitled to a similar lien to that of the original contractor, upon filing a notice which complies with the requirements set forth in § 40-301.02, subject, however, to the conditions set forth in §§ 40-303.02 to 40-303.20.”

Cross References

Payment as defense to assertion of lien, see § 47-2883.03.

§ 40–303.02. Conditions and limitations.

(a) A lien in favor of parties so employed by the original contractor shall be subject to the terms and conditions of the contract, if any, between the owner and the original contractor except any terms and conditions therein that relate to the original contractor’s right to waive liens on behalf of the parties employed. The lien of the parties shall be limited to the amount due, or to become due, but unpaid to the original contractor and shall be satisfied, in whole or in part, out of that amount only. If the original contractor, by reason of any breach by the original contractor of his, her, or its agreement with the owner, shall be entitled to recover less than the amount agreed upon between them, the liens of the parties employed by the original contractor shall be enforceable only to the extent of the reduced amount.

(b) If the owner, in good faith, has paid the original contractor in full for the project of the original contract (and the amount of the payment is not disputed by the original contractor), the parties employed by the original contractor shall not be entitled to a lien on the owner’s real property to recover any amounts due and owing for their work or materials provided for the erection, construction, improvement, repair of, or addition to the real property; provided, that if a subcontractor, materialman, or supplier notifies the owner in writing of amounts due to the subcontractor, materialman, or supplier (“notice amount”) while the owner has a balance due and owing or to become due and owing to the original contractor that is not less than the notice amount, the notice of the notice amount shall be prima facie evidence that any payment thereafter by the owner to the original contractor was not made in good faith. Any provision in a contract, purchase order, or similar document that prohibits a subcontractor, materialman, or supplier from contacting or communicating with an owner shall be void to the extent it prevents compliance with the notice requirements of this subsection.

(Mar. 3, 1901, 31 Stat. 1384, ch. 854, § 1240; Oct. 20, 2005, D.C. Law 16-31, § 2(e), 52 DCR 7195.)

Prior Codifications

1981 Ed., § 38-104.

1973 Ed., § 38-104.

Effect of Amendments

D.C. Law 16-31 rewrote section, which had read as follows: “All such liens in favor of parties so employed by the contractor shall be subject to the terms and conditions of the original contract except such as shall relate to the waiver of liens and shall be limited to the amount to become due to the original contractor and be satisfied, in whole or in part, out of said amount only; and if said original contractor, by reason of any breach of the contract on his part, shall be entitled to recover less than the amount agreed upon in his contract, the liens of said parties so employed by him shall be enforceable only for said reduced amount, and if said original contractor shall be entitled to recover nothing said liens shall not be enforceable at all.”

§ 40–303.03. Notice to owner.

The said subcontractor or other person employed by the contractor as aforesaid, besides filing a notice with the Recorder of Deeds of the District of Columbia as aforesaid, shall serve the same upon the owner of the property upon which the lien is claimed, by leaving a copy thereof with said owner or his agent, if said owner or agent be a resident of the District, or if neither can be found, by posting the same on the premises; and on his failure to do so, or until he shall do so, the said owner may make payments to his contractor according to the terms of his contract, and to the extent of such payments the lien of the principal contractor shall be discharged and the amount for which the property shall be chargeable in favor of the parties so employed by him reduced.

§ 40–303.04. Owner’s duty.

After notice shall be filed by said party employed under the original contractor and a copy thereof served upon the owner or his agent as aforesaid, the owner shall be bound to retain out of any subsequent payments becoming due to the contractor a sufficient amount to satisfy any indebtedness due from said contractor to the said subcontractor, or other person so employed by him, secured by lien as aforesaid, otherwise the said party shall be entitled to enforce his lien to the extent of the amount so accruing to the principal contractor.

§ 40–303.05. Subcontractor entitled to know terms of contract.

Any subcontractor or other person employed by the contractor as aforesaid shall be entitled to demand of the owner or his authorized agent a statement of the terms under which the work contracted for is being done and the amount due or to become due to the contractor executing the same, and if the owner or his agent shall fail or refuse to give the said information, or willfully state falsely the terms of the contract or the amounts due or unpaid thereunder, the said property shall be liable to the lien of the said party demanding said information, in the same manner as if no payments had been made to the contractor before notice served on the owner as aforesaid.

§ 40–303.06. Advance payments.

If the owner, for the purpose of avoiding the provisions hereof, and defeating the lien of the subcontractor or other person employed by the contractor, as aforesaid, shall make payments to the contractor in advance of the time agreed upon therefor in the contract, and the amount still due or to become due to the contractor shall be insufficient to satisfy the liens of the subcontractors or others so employed by the contractor, the property shall remain subject to said liens in the same manner as if such payments had not been made.

§ 40–303.07. Priority of lien.

The lien hereby given shall be preferred to all judgments, mortgages, deeds of trusts, liens, and incumbrances which attach upon the building or ground affected by said lien subsequently to the commencement of the work upon the building, as well as to conveyances executed, but not recorded, before that time, to which recording is necessary, as to third persons; except that nothing herein shall affect the priority of a mortgage or deed of trust given to secure the purchase money for the land, if the same be recorded within 10 days from the date of the acknowledgment thereof. When a mortgage or deed of trust of real estate securing advances thereafter to be made for the purpose of erecting buildings and improvements thereon is given, or when an owner of lands contracts with a builder for the sale of lots and the erection of buildings thereon, and agrees to advance moneys toward the erection of such buildings, the lien hereinbefore authorized shall have priority to all advances made after the filing of said notices of lien, and the lien shall attach to the right, title, and interest of the owner in said building and land to the extent of all advances which shall have become due after the filing of such notice of such lien, and shall also attach to and be a lien on the right, title, and interest of the person so agreeing to purchase said land at the time of the filing of said notices of lien. When a building shall be erected or repaired by a lessee or tenant for life or years, or a person having an equitable estate or interest in such building or land on which it stands, the lien created by this chapter shall only extend to and cover the interest or estate of such lessee, tenant, or equitable owners.

§ 40–303.08. How lien enforced.

The proceeding to enforce the lien hereby given shall be a bill in equity, which shall contain a brief statement of the contract on which the claim is founded, the amount due thereon, the time when the notice was filed with the Recorder of Deeds, and a copy thereof served on the owner or his agent, if so served, and the time when the building or the work thereon was completed, with a description of the premises and other material facts; and shall pray that the owner’s interest in the premises be sold and the proceeds of sale applied to the satisfaction of the lien. If such suit be brought by any person entitled, other than the principal contractor, the latter shall be made a party defendant, as well as all other persons who may have filed notices of liens, as aforesaid. All or any number of persons having liens on the same property may join in one suit, their respective claims being distinctly stated in separate paragraphs; and if several suits are brought by different claimants and are pending at the same time, the court may order them to be consolidated.

§ 40–303.09. Decree of sale.

If the right of the complainant, or of any of the parties to the suit, to the lien herein provided for shall be established, the court shall decree a sale of the land and premises or the estate and interest therein of the person who, as owner, contracted for the erection, repair, improvement of, or addition to the building, as aforesaid.

§ 40–303.10. Subcontractor preferred to contractor.

If the original contractor and the persons contracting or employed under him shall both have filed notices of liens, as aforesaid, the latter shall first be satisfied out of the proceeds of sale before the original contractor, but not in excess of the amount due him, and the balance, if any, of said amount shall be paid to him.

§ 40–303.11. Distribution of sale proceeds.

If one, or some only, of the persons employed under the original contractor shall have served notice on the owner, as aforesaid, before payments made by him to the original contractor, said party or parties shall be entitled to priority of satisfaction out of said proceeds to the amount of such payments; but, subject to this provision, if the proceeds of sale, after paying there out the costs of the suit, shall be insufficient to satisfy the liens of said parties employed under the original contractor the said proceeds shall be distributed ratably among them to the extent of the payments accruing to the original contractor subsequently to the service of notice on the owner by said parties, as aforesaid.

§ 40–303.12. Several buildings.

In case of labor done or materials furnished for the erection or repair of 2 or more buildings joined together and owned by the same person or persons, it shall not be necessary to determine the amount of work done or materials furnished for each separate building, but only the aggregate amount upon all the buildings so joined, and the decree may be for the sale of all the buildings and the land on which they are erected as one building, or they may be sold separately if it shall seem best to the court.

§ 40–303.13. When suit to be commenced.

(a)(1) Any person with a lien and who has recorded a valid notice of intent shall only enforce the lien by:

(A) Filing suit under § 40-303.08 to enforce the lien at anytime within 180 days after the date that the notice of intent is recorded in the land records; and

(B) Recording, within 10 days of filing suit, a notice of pendency of action in accordance with § 42-1207(b) in the land records.

(2) Failure to file suit within the 180-day period or to file timely a notice of pendency of action shall terminate the lien.

(Mar. 3, 1901, 31 Stat. 1387, ch. 854, § 1251; Mar. 19, 2002, D.C. Law 14-84, § 2(c), 49 DCR 198; Oct. 19, 2002, D.C. Law 14-213, § 25, 49 DCR 8140; Oct. 20, 2005, D.C. Law 16-31, § 2(g), 52 DCR 7195.)

Prior Codifications

1981 Ed., § 38-115.

1973 Ed., § 38-115.

Effect of Amendments

D.C. Law 14-84 rewrote the section, which had read:

“Any person, entitled to a lien, as aforesaid, may commence his suit to enforce the same at any time within a year from and after the filing of the notice aforesaid or within 6 months from the completion of the building or repairs aforesaid, on his failure to do which the said lien shall cease to exist, unless his said claim be not due at the expiration of said periods, in which case the action must be commenced within 3 months after the said claim shall have become due.”

D.C. Law 14-213, in subsec. (a), substituted “; provided, that if the claim is not due” for “; provided, that the claim shall not be due”.

D.C. Law 16-31 rewrote the section.

§ 40–303.14. Extent of land bound by lien.

If there be any contest as to the dimensions of the land claimed to be subjected to the lien aforesaid, the court shall determine the same upon the evidence and describe the same in the decree of sale.

§ 40–303.15. Entry of satisfaction.

Whenever any person having a lien by virtue hereof shall have received satisfaction of his claim and cost, he shall, on the demand, and at the cost of the person interested, enter said claim satisfied, in the clerk’s office aforesaid, and on his failure or refusal so to do he shall forfeit $50 to the party aggrieved, and all damages that the latter may have sustained by reason of such failure or refusal.

§ 40–303.16. Payment into court and release.

(a) In any suit to enforce a lien under this chapter, the owner of the building and premises to which the lien may have attached may be allowed to either:

(1) Pay into court the amount claimed by the lienor, and such additional amount, to cover interest and costs, as the court may direct; or

(2) File a written undertaking, with one or more sureties, to be approved by the court, to the effect that he or she and they will pay the judgment that may be recovered, which may include interest and costs; provided, that:

(A) Where the surety is to be provided by bond, only one bond shall be required; and

(B) The judgment shall be rendered against all the persons so undertaking.

(b) On the payment of the money into court, or the approval of the undertaking pursuant to subsection (a)(2) of this section, the property shall be released from the lien, and any money so paid in shall be subject to the final decree of the court.

(c)(1) No undertaking pursuant to subsection (a)(2) of this section shall be approved by the court until the complainant shall have had at least 5 days notice of the defendant’s intention to apply to the court for the approval, which notice shall give the name and residence of the person to be offered as surety, or persons if the court determines more than a single surety is required, and the time when the motion for the approval will be made.

(2) Any surety shall make oath, if required, that he or she is worth, over and above all debts and liabilities, double the amount of the lien.

(3) The complainant may appear and object to the approval.

(Mar. 3, 1901, 31 Stat. 1387, ch. 854, § 1254; June 5, 2012, D.C. Law 19-138, § 2(b), 59 DCR 2553.)

Prior Codifications

1981 Ed., § 38-118.

1973 Ed., § 38-118.

Section References

This section is referenced in § 42-1902.02 and § 42-2025.

Effect of Amendments

D.C. Law 19-138 rewrote the section, which formerly read:

“In any suit to enforce a lien hereunder, the owner of the building and premises to which such lien may have attached, as aforesaid, may be allowed to pay into court the amount claimed by the lienor, and such additional amount, to cover interest and costs, as the court may direct, or he may file a written undertaking, with 2 or more sureties, to be approved by the court, to the effect that he and they will pay the judgment that may be recovered and costs, which judgment shall be rendered against all the persons so undertaking. On the payment of said money into court, or the approval of such undertaking, the property shall be released from such lien, and any money so paid in shall be subject to the final decree of the court. No such undertaking shall be approved by the court until the complainant shall have had at least 2 days notice of the defendant’s intention to apply to the court therefor, which notice shall give the names and residences of the persons intended to be offered as sureties and the time when the motion for such approval will be made, and such sureties shall make oath, if required, that they are worth, over and above all debts and liabilities, double the amount of said lien. The complainant may appear and object to such approval.”

Cross References

Condominiums, see § 42-1902.02.

Horizontal property regimes, see § 42-2025.

§ 40–303.16a. Effect of failure to file notice. [Repealed]

Repealed.

§ 40–303.17. Undertaking to discharge liens before suit.

Such an undertaking as above mentioned may be offered before any suit brought in order to discharge the property from existing liens, in which case notice shall be given as aforesaid to the parties whose liens it is sought to have discharged, and the same proceedings shall be had as above directed in relation to the undertaking to be given after the commencement of the suit, and said undertaking shall be to the effect that the owner and his said sureties will pay any judgment that may be rendered in any suit that may thereafter be brought for the enforcement of said lien.

§ 40–303.18. Decree against sureties.

If such undertaking be approved before any suit brought, such suit shall be a suit in equity against the owner, to which the sureties may be made parties; if the undertaking be approved after suit brought, the said sureties shall ipso facto become parties to the suit, and in either case the decree of the court shall be against the sureties as well as the owner.

§ 40–303.19. No action by subcontractor against owner.

No subcontractor, materialman, or workman employed under the original contractor shall be entitled to a personal judgment or decree against the owner of the premises for the amount due to him from said original contractor, except upon a special promise of such owner, in writing, for a sufficient consideration, to be answerable for the same.

§ 40–303.20. Judgment for deficiency upon sale.

In any suit brought to enforce a lien by virtue of the provisions aforesaid, if the proceeds of the property affected thereby shall be insufficient to satisfy such lien, a personal judgment for the deficiency may be given in favor of the lien or against the owner of the premises or the original contractor, as the case may be, whichever contracted with him for the labor or materials furnished by him, provided such person be a party to the suit and shall have been personally served with process therein.

§ 40–303.20a. Authority to promulgate regulations.

(a) The Mayor shall promulgate rules to implement this chapter. The proposed rules shall be transmitted to the Council for a 45-day period of review, excluding Saturdays, Sundays, legal holidays, and days of Council recess. If the Council does not approve or disapprove the rules within the 45-day review period, the rules shall be deemed disapproved.

(b) The Mayor shall issue rules to implement the provisions of D.C. Law 16-31, within 180 days of October, 20, 2005.