Mechanics’ Liens and the Priority Dilemma by John R. Jameson

Bag of money with magnifying glass.

by John R. Jameson

Idaho mechanics’ lien statutes reflect the public policy favoring protection of construction contractors, materialmen, and providers of certain professional services to receive renumeration for improvements made to real property. In essence, a right to a mechanics’ lien evens the playing field between property owners and persons improving the real property. Without the mechanics’ lien statutorily created security interests, builders, materialmen, and other contractors would only have judicial remedies of a breach of contract, or other operable cause of action, to obtain an enforceable right to collect monies owed. In the meantime, property owners would be able to profit from the property improvements without any consideration to the contractor performing the property improvements. The mechanics’ lien statutes change this dynamic by providing an immediate lien to secure payment for the work and services performed.

Application of Idaho’s mechanics’ liens statutes requires a thorough analysis of the law and the facts giving rise to a mechanics’ lien. Attorneys should be aware of several factors when dealing with mechanics’ liens. The actual work performed and the location thereof is important information when considering the property, or interest therein, subject to a potential mechanics’ lien. Furthermore, determining the priority of a mechanics’ lien is a dilemma that should be resolved to protect clients’ lien rights. Failure to address the issues of ownership of the property and the priority of a mechanics’ lien may result in substantial negative impacts on the interests of many of the parties involved in real estate transactions.  This article will identify some of the considerations that attorneys should discuss with their clients, as well as offer practical steps that can be taken to perfect and protect the priority of a mechanic’s lien.

A Mechanics’ Lien is an Inchoate Lien

Mechanics’ liens “are preferred to any lien, mortgage, or other encumbrance, which may have attached subsequent to the time when the building, 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 […].”[1]

Mechanics’ liens have priority over any lien, mortgage, or other encumbrance that attached subsequent to, or was unrecorded, or of which the lienholder had no notice as of (as applicable) the commencement of physical work; the date that materials were delivered, leased, or rented; or the date that “materials or professional services were commenced to be furnished.”[ii] The Idaho Supreme Court has consistently construed this statute to mean that each contractor, subcontractor or supplier has independent priority based upon when their specific work, services, or materials were supplied to the property or project.[iii] 

For most persons with lien rights under this statute, the lienholder’s priority will relate back to the date that the contractor, subcontractor, or materialman physically commenced work or supplied materials to the property.[iv] A lien may encompass the entirety of the work performed under a single contract.[v] Therefore, pauses in work, waivers of lien claims, or even acceptance of partial payments for work performed may not affect the priority date for that lien claimant for work performed under a single contract. If work is performed or services are rendered under separate contracts, whether by the same or unrelated contractors, subcontractors or materialmen, the priority date for each contract and work conducted thereunder is determined independently of one another. [vi] The priority date for a resulting mechanics’ lien will be set by the commencement of work by each individual contractor, subcontractor, or materialman and not the execution of each provider’s contract for work to be performed.

Furthermore, the Idaho Supreme Court recently held that the priority of an engineer’s lien under I.C. § 45-501 relates back to the date “when the engineer commenced to furnish ‘any authorized, professional services’ under the contract regardless of where the services were rendered” and not to the date that physical work was commenced on the property at issue.[vii] By extension, this would also include work performed by a licensed surveyor in relation to the property.[viii] Therefore, certain mechanics’ lien rights may have priority over subsequent encumbrances, even if there has been no physical work commenced on the property. Thus an inchoate lien may have priority regardless of whether an actual claim of lien has been recorded in the county real property records.

Perfection of Lien

A person claiming a mechanics’ lien must file a claim of lien with the county recorder within ninety days after that claimant’s substantial completion of the labor or services or furnishing of materials.[ix] The Idaho Supreme Court has interpreted “completion” in this statute to mean “substantial completion” of the claimant’s work, and “trivial work done or materials furnished after the contract has been substantially completed will not extend the time in which a lien can be filed.”[x] Failure to properly record a claim of lien within this window may result in a total loss of lien rights against the property, though the claimant likely retains a personal action for collection of the debt.

The claim of lien is effective for six months after the claim of lien is filed, unless court proceedings are commenced to enforce the lien within that six-month period.[xi] If payment is made on the account or the lienholder extends credit with a set expiration date, the lien may be extended for an additional six months after the date of such payment or expiration of extension of credit so long as the payment or extension of credit is endorsed on the recorded claim of lien.[xii] The lien of a final judgment from a lien foreclosure action will be enforceable for ten years from the date of the judgment.[xiii] 

Property Rights Subject to a Mechanics’ Lien

Idaho Code § 45-501 outlines a party’s right to lien real property for which labor, materials and/or services have been performed. The code section states in part, “[The contractor] has a lien upon the same for the work or labor done or professional services or materials furnished, whether done or furnished at the instance of the owner of the building or other improvement or his agent.”[xiv] Idaho Code § 45-505 defines the real property, including the “ownership” of the property less than fee simple, that is potentially subject to mechanics’ liens within the State of Idaho. The property interest subject to the lien only extends to the interest the person requesting the services, work, or materials has in the land.[xv] For example, if the person requesting such services, work, or materials only holds a leasehold interest, the lien will only attach to the leasehold interest.[xvi]  

There are instances where a less-than-fee interest holder could potentially be considered an agent of the owner and bind the fee interest to mechanics’ liens. In such instances, the property owner must in some manner indicate that the agent is to act for him, and the agent must act or agree to act on his behalf and subject to his control.[xvii] However, merely acting in concert with one another, without a right of control, does not give rise to an agency relationship.[xviii] In most matters concerning the creation of an agency relationship, whether such relationship exists is a question of fact to be judicially determined.[xix]

The claimant has the right to lien all the “land upon which or in connection with which” the services were rendered, or the building, improvement, or structure is constructed, plus a “convenient space about the same” if the person that caused the services to be rendered or work to be performed also owns the adjacent land.[xx] “What area of land is subject to the lien in a given case largely depends upon the character of the improvement.”[xxi] “The question is not so much as to the amount of land required for the area to be occupied by the [improvement], but rather as to the amount of land to be improved and benefitted by the creation and use of the [improvement].”[xxii] “[T]he amount of land necessary for the convenient use and occupation of the property to be sold under the terms and conditions of the lien and judgment” must be determined by the court decreeing foreclosure.[xxiii] 

Tenancy in Relation to Mechanics’ Liens

Real property rights in Idaho consist of the proverbial “bundle of sticks” taught during the first year of law school. One of the lesser explored or considered “sticks” is the property rights belonging to a tenant or lessee of real property. As a general rule, lessees hold a property interest less than that of property owner’s fee interest. This leasehold interest, as it is commonly referred, is limited in scope and duration. It also generally prohibits lessees from transferring or affecting the freehold estate possessed by the property’s vested owner.

One area where this general rule does not automatically apply is when tenant causes certain improvements to be made to the real property. The common law rule is that contractors “cannot recover for improvements made to a landlord’s property absent an agreement to reimburse ….”[xxiv] However, when the improvements and/or repairs are made “beyond what mere tenants typically make to a real property,” such as electrical improvements and tree removal, a fee owner cannot generally avail themselves of such improvements without some type of restitution to the tenant upon the termination of the tenancy.[xxv] Such an instance begs the question of whether a contractor, material supplier, and/or a professional service provider can encumber a landlord’s interest in the property should a tenant fail to pay for the improvements.

"Such an instance begs the question of whether a contractor, material supplier, and/or a professional service provider can encumber a landlord’s interest in the property should a tenant fail to pay for the improvements."

The facts of Tri-Circle v. Brugger Corp are instructive in determining an agency relationship in an owner-tenant context. That case concerned a farmer landlord tenant arrangement, in which the tenant was granted express authority to purchase irrigation materials and retain workers to perform certain repairs to the irrigation system. Subsequent to the authorized repairs being completed, which were paid for by the landlord, the tenant proceeded to charge additional expenses to the landlord’s account for further irrigation upkeep. At trial, there was no evidence presented that demonstrated the third-party vendor should have understood the charges incurred by the tenant were for irrigation start-up costs only, and the tenant was therefore cloaked under express, implied, and apparent authority to continue to charge the account for irrigation system materials and repairs.[xxvi]

Although Tri-Circle did not involve an issue of mechanics’ liens being charged against the owner’s real property, Idaho Courts have directly defined which acts or implications would give rise to a tenant being treated as an agent for purposes of mechanics’ lien attachments.

A tenant or lessee is not generally considered the agent of the lessor within the interpretation of the mechanics’ lien law merely by virtue of the relationship of landlord and tenant, and a tenant or lessee cannot subject the interest of his landlord to a mechanics’ lien by reason of the tenant’s contract with a materialman or laborer, unless the owner does some act in ratification of, or consent to the work done and the furnishing of the material or labor.[xxvii]

Subsequent Idaho case law clarifies that “consent for certain repairs specified in the lease to be made by the lessee was not sufficient to extend that materialman’s lien to the lessor’s interest.”[xxviii] “The estate or property of a lessor is not subject to a mechanics’ lien for improvements contracted for by his lessee unless the lessor has made him his agent or otherwise conferred the requisite authority on him, or ratified his acts, or is estopped to deny the validity of the lien.”[xxix]

In Idaho Lumber, a property lessee contracted with Idaho Lumber to remodel a building and construct a parking lot on the property. During construction on the property, the lessee made unilateral changes to the construction plans. Although the property owner visited the site during the construction, the facts showed that the lessee had complete control over the work performed on the property. Lessee subsequently defaulted on both the construction contract and the property lease. The contractor filed a mechanics’ lien against the property and sued the property owner to foreclose on the lien, amongst other claims. The court ultimately held that the “authorization” given by the property owner for the property alterations really amounted only to consent to have the lessee expend money on the property remodeling efforts and was therefore deemed insufficient to support a lien on the fee interest.[xxx]

If the landlord maintains control over property improvements requested by a tenant, Idaho Courts have deemed the tenant to be the agent of the landlord. In such a limited instance, the owner’s fee interest in the property may be subject to the lien.[xxxi] However, merely consenting to a tenant conducting the property improvements is generally not considered sufficient control to subject the fee interest to such a mechanics’ lien.[xxxii] As an example, many commercial leases will contain terms allowing for tenant improvements to the property, but only after obtaining landlord approval of the plans. This hypothetical is contrary to the facts of Idaho Lumber in that the landlord still holds oversight and approval rights as opposed to merely authorizing the tenant to construct the improvements.  

Whether a tenant’s property improvements subject the property to a lien against the owner’s fee interest is a highly fact-specific analysis. The facts must be analyzed in every instance whether tenant improvements are being, or are contemplated to be, performed on the property. Items to consider during the analysis include, but are not limited to, the lease agreement, indications of actual control by the landlord, and/or tenant reimbursement terms.

Lender Protections Against Inchoate Mechanic’s Liens

Idaho does not have any statutory protections for the benefit of mortgagees or bona fide purchasers against valid, prior mechanic’s liens other than notice of the lien through a title search.  However, there are still a few methods to mitigate mechanic’s lien risk in Idaho. 

Lien Waivers and Subordinations

Express waivers of mechanics’ lien rights are valid and enforceable in Idaho so long as they are supported by adequate consideration.[xxxiii] “[W]here a lien waiver is not incorporated as part of a more comprehensive agreement, the lien waiver must be supported by independent valuable consideration.”[xxxiv] For example, when there is work performed outside the scope of the construction contract by a sub-contractor, there will likely need to be additional consideration to support a waiver from the subcontractor.[xxxv] 

Idaho does not have statutory forms of or requirements for mechanics’ lien waivers, and waivers are customarily drafted and provided by contractors.  While there is no required language, the intent to waive must be clear: “In order to establish a waiver, the intention to waive lien rights must clearly appear, and a waiver of the lien will not be presumed or implied, contrary to the intention of the party whose rights would be injuriously affected thereby.”[xxxvi] Lien waiver and subordination agreements must be so unambiguous to evidence the parties’ intent to waive, alter and/or subordinate the effective priority date of the subordination.[xxxvii]

Express subordinations of mechanic’s and materialmen’s lien rights to later-recorded security instruments are also enforceable in Idaho.[xxxviii] The subordination agreement will only establish priority as between the parties to the agreement and does not waive the subordinating party’s right to lien the property. Regardless,  these agreements can be a useful tool to insure the relative priority of a security instrument in Idaho. 


"The facts must be analyzed in every instance whether tenant improvements are being, or are contemplated to be, performed on the property."

Posting a Bond

If a mechanic’s or materialman’s claim of lien is recorded against real property, I.C. § 45-518 provides an expedited procedure for release of the lien by posting a bond with a court of competent jurisdiction.  While a party responsible for payment may occasionally be reluctant to use this process for fear of admitting responsibility for payment, Idaho law is well established on this point: “the lien release bond is merely meant to act as substitute security for the real property and does not otherwise affect the rights of the interested parties.”[xxxix]

Title Insurance

The ability to ascertain the relative lien priority is an important component for a title insurance company in underwriting the issuance of a title policy for a construction loan. Both the ALTA 2006 and 2021 loan policies may provide coverage for mechanics’ lien risks due to lack of priority of the insured lender’s mortgage or deed of trust. Coverage of mechanics’ lien risks may also be provided through particular endorsements to the title policy. Due to the potential liability of insuring a lender’s priority, even in known sitiautions where it may not exist, title insurance companies will generally take great care in underwriting mechanics’ lien risks.


In the context of mechanic’s liens, legal representation of property owners, contractors or lenders mandates a highly factual, specific analysis in determining whether any work performed on the property gives rise to mechanic’s liens. Unlike many property encumbrances, mechanics’ liens are inchoate liens, which dictates a duty to analyze when and if a lien attaches. Further, attorneys should consider whether non-owner parties have caused any improvements to the property, which can potentially encumber the fee owner’s interest. As for preparing mechanic’s lien filings on behalf of contractor clients, strict compliance is required. Practitioners should be well versed in the nuances of I.C. § 45-501, et seq. before commencing representation concerning the perfection, court foreclosure actions, and lien priority rights.            

Note: Nothing contained in this article is to be considered as the rendering of legal advice for specific cases, and readers are responsible for obtaining such advice from their own legal counsel. This article is intended for educational and informational purposes only.

Photo of John Jameson

John R. Jameson

John R. Jameson has spent his legal career specializing in real property matters. Currently, John is Underwriting Counsel for First American Title assigned to Idaho, Montana and Oregon. John is an active member of the Idaho State Bar, serving on the Lawyer Assistance Program Committee, Chairman of the Unauthorized Practice of Law Committee, and is the Secretary/Treasurer of the Real Property Section. John is also a 2023 graduate of the Idaho Academy of Leadership for Lawyers. In his spare time, John enjoys running, camping, fishing, and anything that gets him outside.


[1] Idaho Code § 45-506.

[ii] Id.

[iii] See Ultrawall, Inc. v. Washington Mutual Bank, FSB, 135 Idaho 832, 25 P.3d 855 (2001) (Emphasis added); Pacific States Sav. & Loan & Bldg. Co. v. Dubois, 11 Idaho 319, 83 P. 513 (1905).

[iv] See Credit Suisse AG v. Teufel Nursery, Inc., 156 Idaho 189, 199, 321 P.3d 739, 749 (2014), citing Terra-West, Inc. v. Idaho Mut. Trust, LLC 150 Idaho 393, 400, 247 P.3d 620, 627 (2010).

[v] Terra-West, Inc. 150 Idaho at 400, 247 P.3d at 627.

[vi] Credit Suisse, 156 Idaho at 197, 321 P.3d at 747. 

[vii] Hap Taylor & Sons, Inc. v. Summerwind Partners, LLC, 157 Idaho 600, 607, 338 P.3d 1204, 1211 (2014).

[viii] See I.C. § 45-501.

[ix] I.C. § 45-507. 

[x] Baker v. Boren, 129 Idaho 885, 895, 934 P.2d 951, 961 (1997).

[xi] I.C. § 45-510(1).

[xii] Id.

[xiii] Id; See also I.C. § 10-1111.

[xiv] I.C. § 45-501 (Emphasis added).

[xv] I.C. § 45-505. 

[xvi] Nelson Bennett Co. v. Twin Falls Land & Water Co., 14 Idaho 5, 17-18, 93 P. 789, 792 (1908).

[xvii] Herbst v. Bothof Dairies, 110 Idaho 971, 973, 719 P.2d 1231,1233 (1986).

[xviii] Id. at 736, 366 P.3d at 1096.

[xix] John Scowcroft & Sons Co. v. Roselle, 77 Idaho 142, 146, 289 P.2d 621, 623 (1955).

[xx] Id.

[xxi] Durfee v. Parker, 90 Idaho 118, 123, 410 P.2d 962, 964 (1965).

[xxii] Id.

[xxiii] Robertson v. Moore, 10 Idaho 115, 77 P. 218 (1904), overruled on other grounds by Dover Lumber Co. v. Case, 31 Idaho 276, 170 P. 108 (1918).

[xxiv] Asher v. McMillan, 169 Idaho 701, 706, 503 P.3d 172, 177 (2021).

[xxv] Id. at 708, 503 P.3d at 179.

[xxvi] Tri-Circle, 121 Idaho at 954, 829 P.2d at 544.

[xxvii] Bunt v. Roberts, 76 Idaho at 161, 279 P.2d at 630 (Emphasis added).

[xxviii] Idaho Lumber, 109 Idaho at 742, 710 P.2d at 652.

[xxix] Id. at 743, 710 P.2d at 653.

[xxx] Id.

[xxxi] Bunt v. Roberts, 76 Idaho 158, 161, 279 P.2d 629, 630 (1955).

[xxxii] Idaho Lumber v. Buck, 109 Idaho 737, 742, 710 P.2d 647, 652 (1985).

[xxxiii] Pierson v. Sewell, 97 Idaho 38, 42-43, 539 P.2d 590, 594-95 (1975). 

[xxxiv] SI Constr., LLC v. Ridge at Black Rock Bay, Inc., 2011 Ida. Dist. LEXIS 19, *23.

[xxxv] See eg. G.R. SPonaugle &Sons, Inc. v. McKnight Construction Co. 304 A.2d 339, 345 (Del. Sup. Ct. 1973).

[xxxvi] Smith v. Faris-Kesl Const. Co., 27 Idaho 407, 150 P. 25, 32 (1915).

[xxxvii] See e.g. In Re Tamarack Resort foreclosure and Related Proceedings, Valley County Case No. CV-08-114C, pp. 12 (ID 4th Dist., 2009).

[xxxviii] See, e.g., Am. Bank v. Wadsworth Golf Constr. Co. of the Southwest, 155 Idaho 186, 307 P.3d 1212 (2013). 

[xxxix] Wadsworth Golf, 155 Idaho at 192, 307 P.3d at 1218.