LLC Must Register as Contractor; Member Registration Not Sufficient

Stonebrook Constr. LLC v. Chase Home Fin., No. 37868, 2012 WL 1433471 (Idaho Apr. 26, 2012)

The Idaho Supreme Court made clear that a contractor entity cannot foreclose a lien unless it is a registered contractor; registration of an LLC member is not sufficient.  Here, Stonebrook performed construction services for homeowners who had given a deed of trust to Chase.  Homeowners did not pay Stonebrook, so Stonebrook placed a lien on the property and commenced a foreclosure action.  Chase moved to dismiss because, while one of Stonebrook’s members was a registered contractor, Stonebrook itself was not.  The Court affirmed the trial court’s dismissal of the lien claim, rejecting claims of substantial compliance and unreasonably harsh results.
 

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