Leasehold Lien Upheld in Bremerton Ice Arena Case
Division 2 holds in this case that a subcontractor has the right to lien site improvements under RCW 60.04.010 even though the underlying real property is nonlienable public property.
The case arose from a failed effort to build an ice arena in Bremerton. The City owned the land and hired a developer to build the facility on a leasehold basis. The developer in turn hired a GC who in turn hired the site work subcontractor who didn't get paid for its work.
The subcontractor liened the project as a whole, including the real estate. The Court first threw out the lien against the real estate, based on the bedrock rule that public property in Washington is not subject to liens. But the Court allowed the subcontractor to lien the leasehold improvements even though improvements are normally considered to be fixtures to the real estate itself.
The Court also held the sub's lien related back and took priority over the financing deed of trust, rejecting the lender's argument that relation-back under RCW 60.04.061 only applies to liens "upon any lot or parcel of land" as the statute seems to read. The Court disagreed & said the lender had taken an "overly literal" reading of the relation-back statute.
A copy of the decision is also available here Download file