Mechanic’s Liens: Part One. Technical Risks

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Virginia law provides for a mechanic lien intended to insure payment to persons who supply labor or materials for construction projects. On first blush, the requirement is simple – to file the mechanic’s lien. But over the years judicial interpretations of the statutory provisions have made the requirements much more complex than that; and any disregard of the technicalities can defeat payment.

One example is the recent case involving Heads Up Sprinkler Systems. Heads Up filed a mechanic’s lien to secure payment of $134,390 for work it performed on a subdivision known as “Ashville Park” in Virginia Beach, Virginia. When Heads Up went to enforce its mechanic’s lien in court, one of the parties – the lender who was also owed monies and so trying to defeat the lien claim – raised as a defense to the mechanic’s lien that Heads Up had not included the statement in its mechanic’s lien that it intended “to claim the benefit of this mechanic’s lien.”

While it would seem obvious that anyone filing a mechanic’s lien was intending to claim its benefit, there is language in the Virginia Code requiring that statement to be included in the memorandum of lien. Applying prior Virginia Supreme Court decisions that the mechanic’s lien requirements must be “strictly” complied with, the judge held that Heads Up’s mechanic’s lien was invalid because it did not include that statement, and dismissed the lien claim; and so left Heads Up with no security to receive payment for its work after a five year battle for payment.

There are many other similar technical requirements that apply to Virginia mechanic’s liens. So while a mechanic’s lien that meets all of the necessary requirements can be an excellent means of insuring payment, those technical requirements create pitfalls for the unwary. Because of that, the assistance of experienced mechanic’s lien counsel is particularly beneficial.

Please click here to read Part 2: Practical Risks.

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