What is a lien on funds?
In addition to the subrogation lien discussed above, Chapter 44A also provides subcontractors with a lien on funds. A lien on funds attaches to the funds owing to the party the subcontractor contracted with as opposed to the real property improved. Thus, a first tier subcontractor that has not been paid is entitled to a lien on the funds due and owing the general contractor from the owner, if it follows the necessary steps. Likewise, a second or third tier subcontractor is entitled to a lien on the funds due and owing the party with which it contracted, and is subrogated to the lien on funds available to that party, if it follows the necessary steps. If after receiving the requisite notice, a party makes a payment despite receiving the notice of claim of lien on funds, the lien not only continues as to the funds in possession of the subsequently receiving party, but also the party that makes the wrongful payment is liable to the subcontractor asserting the lien to the extent of the wro
