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Idaho Code Title 45, Chapter 5 sets forth Idaho law applicable to liens of mechanics and materialmen. The statute and common law application of the provisions demonstrate Idaho’s public policy favoring the protection of contractors, materials suppliers, and certain professional service providers with regard to improvement of real property. Specifically covered are contractors, subcontractors, materialmen, licensed surveyors, and professional engineers. Idaho mechanic and materialmen lien statutes permit immediate lien rights to secure payment for work and services performed, and are liberally construed in favor of those to whom the lien is granted. Parkwest Homes, LLC v. Barnson, 149 Idaho 603, 238 P.3d 203 (2010). To create a valid lien, the lien claimant must substantially comply with the statutory requirements.

Every person performing labor upon or furnishing materials to be used in the construction of any building or any other structure, or who otherwise improves any land, and who is legally authorized to perform such work, has a lien upon the building, structure, or land for the work or labor done subject to compliance with the procedures set forth in the Idaho Code §§ 45-501. The lien has priority over and is preferred to any lien, mortgage or other encumbrance, which may have attached subsequent to the time when the improvement or structure was commenced, work done, equipment, materials or fixtures were rented or leased, or materials or professional services were commenced to be furnished. In most circumstances, the claimant’s priority will relate back to the date the claimant commenced work or supplied materials to the property or project.

Lien Procedures and Requirements

The claim of lien must be filed within 90 days after the completion of the labor or services or furnishing of materials. Idaho authority defines “completion” to mean “substantial completion” of the claimant’s work , and trivial work done or materials furnished after contract has been substantially completed will not extend the time in which a lien can be filed.” Baker v,. Boren, 129 Idaho 885, 895, 934 P.2d 951, 961 (1997). Idaho authority defines “completion” to mean “substantial completion” of the claimant’s work, and trivial work done, or materials furnished after contract has been substantially completed will not extend the time in which a lien can be filed.” Baker v,. Boren, 129 Idaho 885, 895, 934 P.2d 951, 961 (1997). The claim of lien must be filed in the records of the county recorder for the county in which such property is situated. An untimely or improperly recorded lien is invalid.

The claim of lien shall include the following:

• A statement of the demand, after deducting all just credit and offsets;
• The name of the owner or reputed owner, if known (whether done or furnished at the instance of the owner of the building or other improvement or his agent. The property interest subject to the lien will only extend to the interest the person requesting the services, work or materials has in the land; for example, under certain circumstances the lien may only attach to a leasehold interest. See Nelson Bennett Co. v. Twin Falls Land & Water Co., 14 Idaho 5, 17-18, 93 P.789, 792 (1908));
• The name of the person by whom the claimant was employed or to whom s/he/it furnished the materials; and
• A legal description of the property to be charged with the lien, sufficient for identification.
• For work or materials subject to the provisions of Idaho Code § 45-525 [GENERAL CONTRACTORS — RESIDENTIAL PROPERTY — DISCLOSURES], the required proof of disclosure and acknowledgment of receipt.
• The claim of lien must be verified by the oath of the claimant, its agent or attorney, to the effect that the affiant believes the same to be just.
• A true and correct copy of the claim of lien shall be served on the owner either by delivering a copy to the owner personally by process server or by mailing a copy by certified mail to the owner no later than five business days following the recordation of the claim of lien.
• In any Court proceeding regarding a lien, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs.

Duration of Lien

The duration of the lien is six months following recording of the lien unless proceedings are commenced within the six month period to foreclose the lien. In addition, if the lien claimant agrees to an extension of credit or accepts partial payment from the owner, and an endorsement is made and recorded on the lien, the lien duration is extended for another six months.

Procedure for Release of Lien by the Posting of a Bond

In the event a lien has expired, is untimely or otherwise invalid, and the claimant refuses to record a release, an owner may bring a cause of action to strike or quash the lien from the record, usually via a declaratory judgment action.

If an owner of real property subject to a valid claim of lien is unable to secure the release of the lien of record through negotiation with the claimant, the owner may post a surety bond. To secure a release of a lien by posting a security bond, the debtor of the lien claimant must obtain a surety bond executed by such debtor from a corporation authorized to transact surety business in the state of Idaho, in substantial conformance with the statutory form. The surety bond must be in the amount of one and a half times the sum of the claim of lien.

Once a bond has been issued, a Petition for Release is filed in the District Court of the county where the property is located and must include the requisite allegations set forth in Idaho Code § 45-520. The petitioner must obtain an order from the Court setting forth the time and date of the hearing on the petition, which time and date must be at least five days after the date of the order and not more than 10 days after the date of the order. A copy of the petition and the order must be served on the lien claimant at least two days before the hearing date. At the hearing, the Court shall enter its order releasing the lien upon the petitioner’s filing in open court the original bond and introducing into evidence a receipt for payment of the premium. The order will refer to the property which is the subject of the lien and the lien by instrument number and will recite that the lien is released of record for all purposes to the same extent as if released of record by the lien claimant. Upon entry of the order, the lien is released of record in its entirety and for all purposes and the real property that was subject to the lien is released from the encumbrances of the lien. The claimant may then bring an action against the claimant’s debtor and the surety for amount due to the claimant, costs and attorney fees, as well as the cost of preparing and filing the lien claim and interest. In addition, the claimant is entitled to a priority of hearing upon the service of a demand for 30-day setting.

Lien Foreclosure Action.

The District Court in the applicable county has jurisdiction of all actions brought for foreclosure. The foreclosure action is equitable in nature and separate from a cause of action for breach of the underlying contract. If a lien is foreclosed and a judgment is entered in favor of the lien claimant, the judgment lien shall be valid for 10 years from the final judgment date. In addition, if a lien claimant successfully forecloses on a lien, it is entitled to an award of the costs and reasonable attorney fees associated with the recording of the claim of lien, together with the foreclosure action.

Careful attention to substantial compliance with Idaho Code Title 45, Chapter 5 is essential. This article identifies a number of considerations that clients may want to address with their attorney. This article is not all inclusive or substantively complete. Contractors, professionals, owners and others may want to timely consult with counsel on all lien matters.