Qualifier Lien Law Quiz

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This 6 hour course is approved for:

      1. Dwelling Contractor Qualifier Certification.

      2. Initial Qualifier-Dwelling Contractor Qualifier Certification. (12 total hours required)

 

Use this information to answer the below multiple choose questions

Every owner with a construction or remodeling project of any size or scope undertaken on their property should know about lien laws and how they may impact the project. For most jobs, initial lien laws procedures are simply a state required formality for consumer and contractor protection. But, serious consequences can arise if lien rights are disregarded.

Construction Liens are an early American legal innovation Thomas Jefferson and James Madison first created in 1791 to encourage building in Washington D.C., and since that time, virtually every state has enacted some kind of lien statutes. These laws were enacted to help protect honest workmen and material suppliers who, for one reason or another don’t receive payment. Lien laws are designed to prevent a property owner from getting the benefit of the work or materials without paying for them.

What is a Construction Lien?

A construction lien is a legal instrument and public record that states there is a valid, unpaid debt against the specific real estate named. The possibility of a lien arises whenever improvements are made to real estate in the course of construction or remodeling projects.

What are the steps to a construction lien?

The Preliminary Notice is usually the first requirement of a Construction lien. If proper payment is not received, then a warning letter, Notice of Intent to Lien, must be provided to the property owner before a Construction lien can be recorded. (Editor’s note: Some states do not require a warning Notice before a lien is recorded).

Who has the right to lien my property?

Anyone that supplies labor, material or expertise onto your property and doesn’t get properly paid. This includes the builder, electrician, plumber, excavator, carpenter, drywaller, mason, painter, roofer, architect, landscaper, etc., and their suppliers.

What else can I do to protect myself?

Make sure you get lien waivers from your contractor and his subs and material suppliers for all monies you pay out in the course of your project.

What is a lien waiver?

A lien waiver states that the party signing the document waives or releases their lien rights against the property. These waivers can be partial or full waivers of lien rights depending on the amount they received and the value of their contribution to the project.

How do I make sure everybody is getting his or her proper payment?

It is your contractor’s legal responsibility to see that his Subcontractors and material suppliers are paid with monies you give him. Also, if you are financing the project your lender or Title company may help track your payouts and answer questions.

What happens if a lien is placed against my property?

A lien is a serious threat to your property title. Aside from the embarrassment and immediate cloud to your title, the party placing the construction lien can petition the court to sell your property at public auction, i.e. Foreclosure, to satisfy the lien.

How do I remove a Construction lien from my property?

It is not likely that a lien will be released or "Satisfied" without payment to the lien holder. An attorney should be retained to determine if all elements of a lien have been done correctly. Upon payment and acceptance of the amount due, the owner has the right to demand a "lien satisfaction" from the lien claimant.

Can someone record a construction lien even if I pay my contractor?

Yes. Anyone who has not been paid for labor, material, equipment or services on your project and has followed other statutory requirements has the right to a construction Lien.

 

Use the above information to answer questions 1-12 below.

 

1. What else can I do to protect myself?

a. A lien waiver states that the party signing the document waives or releases their lien rights against the property. These waivers can be partial or full waivers of lien rights depending on the amount they received and the value of                     their contribution to the project.

b. Anyone that supplies labor, material or expertise onto your property and doesn’t get properly paid. This includes the builder, electrician, plumber, excavator, carpenter, drywaller, mason, painter, roofer, architect, landscaper, etc., and their suppliers.

            c. Make sure you get lien waivers from your contractor and his subs and material suppliers for all monies you pay out in the course of your project.

d. The Preliminary Notice is usually the first requirement of a Construction lien. If proper payment is not received, then a warning letter, Notice of Intent to Lien, must be provided to the property owner before a Construction lien can be recorded. (Editor’s note: Some states do not require a warning Notice before a lien is recorded).

2. What is a lien waiver?

a. A lien waiver states that the party signing the document waives or releases their lien rights against the property. These waivers can be partial or full waivers of lien rights depending on the amount they received and the value of their contribution to the project.

b. Anyone that supplies labor, material or expertise onto your property and doesn’t get properly paid. This includes the builder, electrician, plumber, excavator, carpenter, drywaller, mason, painter, roofer, architect, landscaper, etc., and their suppliers.

            c. Make sure you get lien waivers from your contractor and his subs and material suppliers for all monies you pay out in the course of your project.

d. The Preliminary Notice is usually the first requirement of a Construction lien. If proper payment is not received, then a warning letter, Notice of Intent to Lien, must be provided to the property owner before a Construction lien can be recorded. (Editor’s note: Some states do not require a warning Notice before a lien is recorded).

3. Who has the right to lien my property?

a. A lien waiver states that the party signing the document waives or releases their lien rights against the property. These waivers can be partial or full waivers of lien rights depending on the amount they received and the value of their contribution to the project.

b. Anyone that supplies labor, material or expertise onto your property and doesn’t get properly paid. This includes the builder, electrician, plumber, excavator, carpenter, drywaller, mason, painter, roofer, architect, landscaper, etc., and their suppliers.

            c. Make sure you get lien waivers from your contractor and his subs and material suppliers for all monies you pay out in the course of your project.

d. The Preliminary Notice is usually the first requirement of a Construction lien. If proper payment is not received, then a warning letter, Notice of Intent to Lien, must be provided to the property owner before a Construction lien can be recorded. (Editor’s note: Some states do not require a warning Notice before a lien is recorded).

4. What are the steps to a construction lien?

a. A lien waiver states that the party signing the document waives or releases their lien rights against the property. These waivers can be partial or full waivers of lien rights depending on the amount they received and the value of their contribution to the project.

b. Anyone that supplies labor, material or expertise onto your property and doesn’t get properly paid. This includes the builder, electrician, plumber, excavator, carpenter, drywaller, mason, painter, roofer, architect, landscaper, etc., and their suppliers.

            c. Make sure you get lien waivers from your contractor and his subs and material suppliers for all monies you pay out in the course of your project.

d. The Preliminary Notice is usually the first requirement of a Construction lien. If proper payment is not received, then a warning letter, Notice of Intent to Lien, must be provided to the property owner before a Construction lien can be recorded. (Editor’s note: Some states do not require a warning Notice before a lien is recorded).

5. What is a construction lien?

a. A construction lien is a legal instrument and public record that states there is a valid, unpaid debt against the specific real estate named. The possibility of a lien arises whenever improvements are made to real estate in the course of construction or remodeling projects.

b. It is your contractor’s legal responsibility to see that his Subcontractors and material suppliers are paid with monies you give him. Also, if you are financing the project your lender or Title company may help track your payouts and answer questions.

c. A lien is a serious threat to your property title. Aside from the embarrassment and immediate cloud to your title, the party placing the construction lien can petition the court to sell your property at public auction, i.e. Foreclosure, to satisfy the lien.

d. Yes. Anyone who has not been paid for labor, material, equipment or services on your project and has followed other statutory requirements has the right to a construction Lien.

6. How do I make sure everybody is getting his or her proper payment?

a. A construction lien is a legal instrument and public record that states there is a valid, unpaid debt against the specific real estate named. The possibility of a lien arises whenever improvements are made to real estate in the course of construction or remodeling projects.

b. It is your contractor’s legal responsibility to see that his Subcontractors and material suppliers are paid with monies you give him. Also, if you are financing the project your lender or Title company may help track your payouts and answer questions.

c. A lien is a serious threat to your property title. Aside from the embarrassment and immediate cloud to your title, the party placing the construction lien can petition the court to sell your property at public auction, i.e. Foreclosure, to satisfy the lien.

d. Yes. Anyone who has not been paid for labor, material, equipment or services on your project and has followed other statutory requirements has the right to a construction Lien.

7. What happens if a lien is placed against my property?

a. A construction lien is a legal instrument and public record that states there is a valid, unpaid debt against the specific real estate named. The possibility of a lien arises whenever improvements are made to real estate in the course of construction or remodeling projects.

b. It is your contractor’s legal responsibility to see that his Subcontractors and material suppliers are paid with monies you give him. Also, if you are financing the project your lender or Title company may help track your payouts and answer questions.

c. A lien is a serious threat to your property title. Aside from the embarrassment and immediate cloud to your title, the party placing the construction lien can petition the court to sell your property at public auction, i.e. Foreclosure, to satisfy the lien.

d. Yes. Anyone who has not been paid for labor, material, equipment or services on your project and has followed other statutory requirements has the right to a construction Lien.

8. Can someone record a construction lien even if I pay my contractor?

a. A construction lien is a legal instrument and public record that states there is a valid, unpaid debt against the specific real estate named. The possibility of a lien arises whenever improvements are made to real estate in the course of construction or remodeling projects.

b. It is your contractor’s legal responsibility to see that his Subcontractors and material suppliers are paid with monies you give him. Also, if you are financing the project your lender or Title company may help track your payouts and answer questions.

c. A lien is a serious threat to your property title. Aside from the embarrassment and immediate cloud to your title, the party placing the construction lien can petition the court to sell your property at public auction, i.e. Foreclosure, to satisfy the lien.

d. Yes. Anyone who has not been paid for labor, material, equipment or services on your project and has followed other statutory requirements has the right to a construction Lien.

9. How do I remove a construction lien from my property?

a. It is not likely that a lien will be released or "Satisfied" without payment to the lien holder. An attorney should be retained to determine if all elements of a lien have been done correctly. Upon payment and acceptance of the amount due, the owner has the right to demand a "lien satisfaction" from the lien claimant.

b. It is your contractor’s legal responsibility to see that his Subcontractors and material suppliers are paid with monies you give him. Also, if you are financing the project your lender or Title company may help track your payouts and answer questions.

c. A lien is a serious threat to your property title. Aside from the embarrassment and immediate cloud to your title, the party placing the construction lien can petition the court to sell your property at public auction, i.e. Foreclosure, to satisfy the lien.

d. Yes. Anyone who has not been paid for labor, material, equipment or services on your project and has followed other statutory requirements has the right to a construction Lien.

10. Lien laws were enacted to help protect _____________ and ______________ who, for one reason or another don’t receive payment.

            a. contractor

            b. honest workmen

            c. material suppliers

            d. both b and c

11. Lien laws are designed to prevent a property owner from getting the benefit of the work or materials without paying for them.

            a. true

            b. false

12. Every owner with a construction or remodeling project of any size or scope undertaken on their property should know about lien laws and how they may impact the project.

a. true

            b. false

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CONSTRUCTION LIEN PROCEDURES

The "LIEN NOTICE" form must be sent to the owner of the property by a sub-contractor (someone hired by a prime contractor), within 60 days after furnishing first labor or materials on the property. This Notice is not required to be sent to the owner by a prime contractor or on commercial buildings over 10,000 sq ft. See 779.02, Wis. Stats.

The "NOTICE OF INTENTION TO FILE CLAIM FOR LIEN" must be sent to the owner of the property if the sub-contractor did not get paid. This notice must be sent 30 days prior to filing a "CLAIM FOR LIEN" with the Clerk of Court.

The "CLAIM FOR LIEN" must be filed with copies of the "LIEN NOTICE" and "NOTICE OF INTENT TO FILE CLAIM FOR LIEN" and proof of service of those documents on the property owner.

A. Construction lien law is contained in Ch. 779, Wis. Stats.

B. The following persons have lien rights:

1. A prime contractor.

2. A person who contracts directly with a land owner.

3. A person who provides labor or materials for the construction (a subcontractor, or a laborer or mechanic employed by a prime contractor or subcontractor).

C. In order for a person to exercise these rights, the following must happen first (exceptions to this are contained in paragraph D):

1. A prime contractor must notify the land owner in writing that: (1) he/she; (2) any person who contracts directly with the landowner; and, (3) any person who gives the land owner notice of his/her rights within 60 days after they first furnish labor or materials for the construction have lien rights. The language of the notice is contained in sec. 779.02(2)(a); and,

2. Any person other than the prime contractor who furnishes labor or materials for the construction gives written notice of his/her lien rights to the land owner within 60 days after first furnishing labor or materials. The language of the notice is contained in sec. 779.02(2)(b).

 

D. The notices of lien rights identified in paragraph C are not required to be given by:

1. Any laborer or mechanic employed by any prime contractor or subcontractor.

2. Any lien claimant other than a prime contractor who has contracted directly with the owner for the work or materials furnished.

3. Any lien claimant furnishing labor or materials for an improvement where:

a) more than 4 family living units are to be provided or added, if the improvement is wholly residential in character; or

b) more than 10,000 total usable square feet of floor space is to be provided or added, if the improvement is partly or wholly nonresidential in character.

4. Any prime contractor who is personally an owner of the land to be improved, by any corporate prime contractor of which an owner of the land is an officer or controlling shareholder, by any prime contractor who is an officer or controlling shareholder of a corporation which is an owner of the land, or by any corporate prime contractor managed or controlled by substantially the same persons who manage or control a corporation which is an owner of the land.

5. By any lien claimant, other than a prime contractor, who furnishes labor or materials for an improvement on a project on which the prime contractor is not required to give a notice of lien rights.

 

 

13. The "LIEN NOTICE" form must be sent to the owner of the property by a sub-contractor (someone hired by a prime contractor), within ___ days after furnishing first labor or materials on the property.

 

            a. 10

            b. 30

            c. 60

            d. none of the above

 

14. This Notice is not required to be sent to the owner by a prime contractor or on commercial buildings over __________ sq ft. See 779.02, Wis. Stats.

 

            a. 500

            b. 5,000

            c. 1,000

            d. 10,000

 

15. The "NOTICE OF INTENTION TO FILE CLAIM FOR LIEN" must be sent to the owner of the property if the sub-contractor did not get paid. This notice must be sent ____days prior to filing a "CLAIM FOR LIEN" with the Clerk of Court.

 

            a. 10

            b. 30

            c. 60

            d. none of the above

 

16. The "CLAIM FOR LIEN" must be filed with copies of the "LIEN NOTICE".

           

            a. true

            b. false

 

17. The "CLAIM FOR LIEN" must be filed with copies of the "NOTICE OF INTENT TO FILE CLAIM FOR LIEN".

 

            a. true

            b. false

 

18. The "CLAIM FOR LIEN" must be filed with copies of the proof of service of those documents on the property owner.

 

            a. true

            b. false

 

19. Construction lien law is contained in Ch. 779, Wis. Stats.

 

            a. true

            b. false

 

20. The following person has lien rights: A prime contractor.

 

            a. true

            b. false

 

 

21. The following person has lien rights: A person who contracts directly with a lending institute.

 

            a. true

            b. false

 

 

22. The following person has lien rights: A person who provides labor or materials for the construction (a subcontractor, or a laborer or mechanic employed by a prime contractor or lending institute).

 

            a. true

            b. false

 

23. In order for a person to exercise these rights, the following must happen first (exceptions to this are contained in paragraph D): 1. A prime contractor must notify the land owner in writing that: (1) he/she; (2) any person who contracts directly with the landowner; and, (3) any person who gives the land owner notice of his/her rights within 30 days after they first furnish labor or materials for the construction have lien rights. The language of the notice is contained in sec. 779.02(2)(a);

 

            a. true

            b. false

 

 

 

24. In order for a person to exercise these rights, the following must happen first (exceptions to this are contained in paragraph D): Any person other than the prime contractor who furnishes labor or materials for the construction gives written notice of his/her lien rights to the land owner within 30 days after first furnishing labor or materials. The language of the notice is contained in sec. 779.02(2)(b).

 

            a. true

            b. false

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D. The notices of lien rights identified in paragraph C are not required to be given by:

1. Any laborer or mechanic employed by any prime contractor or subcontractor.

2. Any lien claimant other than a prime contractor who has contracted directly with the owner for the work or materials furnished.

3. Any lien claimant furnishing labor or materials for an improvement where:

a) more than 4 family living units are to be provided or added, if the improvement is wholly residential in character; or

b) more than 10,000 total usable square feet of floor space is to be provided or added, if the improvement is partly or wholly nonresidential in character.

4. Any prime contractor who is personally an owner of the land to be improved, by any corporate prime contractor of which an owner of the land is an officer or controlling shareholder, by any prime contractor who is an officer or controlling shareholder of a corporation which is an owner of the land, or by any corporate prime contractor managed or controlled by substantially the same persons who manage or control a corporation which is an owner of the land.

5. By any lien claimant, other than a prime contractor, who furnishes labor or materials for an improvement on a project on which the prime contractor is not required to give a notice of lien rights.

 

25. The notices of lien rights identified in paragraph C are not required to be given by: 1. Any laborer or mechanic employed by any lending institution.

 

            a. true

            b. false

 

 

26. The notices of lien rights identified in paragraph C are not required to be given by: 2. Any lien claimant other than a prime contractor who has contracted directly with the owner for the work or materials furnished.

 

            a. true

            b. false

 

27. The notices of lien rights identified in paragraph C are not required to be given by:  Any lien claimant furnishing labor or materials for an improvement where: a) more than 6 family living units are to be provided or added, if the improvement is wholly residential in character.

 

            a. true

            b. false

 

28. The notices of lien rights identified in paragraph C are not required to be given by:  Any lien claimant furnishing labor or materials for an improvement where: b) more than 1,000 total usable square feet of floor space is to be provided or added, if the improvement is partly or wholly nonresidential in character.

 

            a. true

            b. false

 

29. The notices of lien rights identified in paragraph C are required to be given by: Any prime contractor who is personally an owner of the land to be improved, by any corporate prime contractor of which an owner of the land is an officer or controlling shareholder, by any prime contractor who is an officer or controlling shareholder of a corporation which is an owner of the land, or by any corporate prime contractor managed or controlled by substantially the same persons who manage or control a corporation which is an owner of the land.

 

            a. true

            b. false

 

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E. If a person desires to enforce lien rights, he/she must serve on the land owner, at least 30 days before filing a claim for lien, a written Notice of Intention to File Claim for Lien. This is required regardless of whether the person was required to give notice of lien rights under paragraph C. See sec. 779.06(2), Stats.

 

30. If a person desires to enforce lien rights, he/she must serve on the ___________ .

 

            a. contractor

            b. sub contractor

            c. land owner

            d. none of the above

 

31. If a person desires to enforce lien rights, he/she must serve at least ____ days before filing a claim for lien.

 

            a. 10

            b. 30

            c. 60

            d. none of the above

 

32. This is required regardless of whether the person was required to give notice of lien rights under paragraph C. See sec. 779.06(2), Stats.         

 

            a. true

            b. false

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F. After the Notice of Intention to File Claim for Lien is served on the land owner, a Claim for Lien shall be filed in the Clerk of Court's office. It must be filed within 6 months from the date the lien claimant furnished the last labor or materials on the improvement. The Claim for Lien shall have attached to it a copy of any notice of lien rights given under Paragraph C and a copy of the Notice of Intent to File Claim for Lien. See sec. 779.06(1)8(3), Stats. The required filing fee to be paid to the Clerk of Court is $5.00.

 

33. After the Notice of Intention to File Claim for Lien is served on the land owner, a Claim for Lien shall be filed in the __________________.

           

            a. Small claims court

            b. Register of Deeds

            c. Clerk of Court’s office

            d. all of the above

 

34. It must be filed within ___ months from the date the lien claimant furnished the last labor or materials on the improvement.

 

            a. 3

            b. 4

            c. 6

            d. 12

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The Claim for Lien form must contain the following information:

1. A statement of the contract or demand upon which it is founded. Typically, this is a

statement that the claimant performed a certain type of work for the owner at the

direction of the owner or the owner's agent.

2. The name of the person against whom the claim is made.

3. The name of the claimant and any assignee.

4. The last date on which the claimant performed any labor or furnished any materials on

the job (within 6 months of filing the claim with the Clerk's office).

5. A.1egal description of the property against which the lien is claimed.

6. A statement of the amount claimed and other material facts.

7. The signature of the claimant or the claimant's attorney.

 

Use the above information to fill in the blank with the correct answer.

 

Question?   What seven items are required for the Claim of Lien form? (fill in the blank)

 

35.                                                                                                                                                                  

 

                                                                                                                                                                       

 

                                                                                                                                                                       

 

36.                                                                                                                                                                  

 

                                                                                                                                                                       

 

37.                                                                                                                                                                  

 

                                                                                                                                                                       

 

 

38.                                                                                                                                                                  

 

                                                                                                                                                                       

 

                                                                                                                                                                       

 

39.                                                                                                                                                                  

 

                                                                                                                                                                       

 

 

40.                                                                                                                                                                  

 

                                                                                                                                                                       

 

41.