Mechanics liens are the best mechanism in construction payment to promote fairness. By filing a lien, a lienholder secures their right to payment by encumbering the property. Unfortunately, in some cases this can lead to a party paying twice on a project. However, on the whole, lien rights are used to enforce payment when a contractor, sub, or supplier seeks what they are owed.
Throughout Donald Trump’s career, there have been a number of mechanics liens filed on his properties. Throughout the campaign trail the subject was a regular topic of discussion, as well as other issues in the construction industry. While electing Donald Trump should have a positive effect on the construction industry, his lien troubles are not far behind him on his way to the White House. Recently, subcontractors have filed mechanics liens against Trump’s new D.C. hotel. At least one of the contractors voted for the president elect.
The Liens
The Trump International Hotel in Washington D.C. has been in the news quite a bit lately due to poor reviews and a dispute with celebrity chef Geoffrey Zakarian. Piling onto the property’s woes, three mechanics liens have recently been filed by those subcontractors who worked at a breakneck pace to finish the project on time. The liens were filed by Joseph Magnolia Inc., who completed the plumbing and HVAC work, A&D Construction, a small outfit that seeks payment for wall base and crown molding work, and AES Electrical, who stated its staff worked 12 hour shifts for over a month and a half straight to complete the lighting, electrical, and fire systems in time for a September 16 campaign event.
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The first sub to file a mechanics lien against Trump was Magnolia Inc., which is owed $2.98M for its plumbing and HVAC work on the project. According to Magnolia, Trump paid most of the money owed but has yet to make final payments. Before these payment issues arose, John Magnolia, the company’s president, actually voted for president elect Donald Trump. However, amid the pressure mounting against Trump to remove himself from the lease before taking office, Magnolia had to make the business decision to secure its right to payment.
A&D construction is a smaller firm and filed a lien for $76K for its work on wall bases and crown molding. According to the subcontractor’s attorney, A&D is a smaller outfit and would struggle to absorb such a loss, a position many subcontractors across the country find themselves in. Despite filing the lien, A&D has yet to receive any response from the Trump organization.
AES held a much larger role on the project, committing 45 workers to the site for 12 hour shifts for 50 consecutive days in order to finish the project on an ambitious schedule. Since the completion of the project, AES has not received payment. As a result, the company filed a mechanics lien against Trump for just over $2M. While AES is considerably larger than A&D, the prospect of lost payment is no easier to swallow. AES’s Executive Vice President, Tim Miller, put it perfectly in a quote for the Washington Post:
“We’re not in this for any sort of political reasons. We have no ax to grind, political or otherwise. We’re a business. We have 700 employees that we pay every week. We have bills. We are effectively financing this work, and we don’t think it’s right. That’s really it.”
Takeaway
Mechanics liens are a useful tool for contractors and subs to ensure payments are made. Liens are a bit of a last resort in construction payment, but unfortunately filing a mechanics lien against Trump has become a regularity for those working on his projects. Such payment trends might be alarming considering the massive infrastructure plan the president elect has proposed, however, with the Miller Act in place, subcontractors can rest assured that they will receive payment on federal projects.
For more on lien laws in Washington D.C., check out our Washington D.C. Construction Payment Resources, or take a look at our other Washington D.C. posts on the blog.
