New Restrictions on Mechanic’s Lien in Virginia

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Authored by attorney James R. Harvey

The 2013 Virginia General Assembly passed a new law further complicating Virginia’s mechanic’s lien laws. The bill, which passed with wide support in the House of Delegates and Senate amends Va. Code §43-3 to now prohibit liens by those without a valid Virginia contractor’s license. “A person who performs labor without a valid license or certificate issued by the Board for Contractors, … or without the proper class of license for the value of the work to be performed, when such a license or certificate is required by law for the labor performed shall not be entitled to a lien pursuant to this section.” Importantly, the Memorandum for Mechanic’s Lien has now been changed so that “the memorandum shall also contain the claimant’s license or certificate number issued by the Board of Contractors, … if any, and the date such license or certificate was issued and the date such license or certificate expires.

This new law raises many issues:

  • What if I am not required to have a contractor’s license?
    Material and equipment suppliers, and certain specialty trades such as painters may not be required to obtain a Virginia Contractor’s license, and they must now certify on the Memorandum of mechanic’s lien “that such a valid license or certificate is not required by law for the work done for which the benefit of a lien is claimed.”
  • What if the Contractor makes a mistake in identifying its license?
    An inaccuracy in the memorandum as to the claimant’s license or certificate number, if any, the date such license or certificate was issued, or the date such license or certificate expires shall not bar a person from perfecting a lien if the claimant can otherwise be reasonably identified in the records of the Board for Contractors.” It is unknown if an “inaccuracy” includes a duly licensed contractor who fails to include any reference to its contractor’s license number on the memorandum. An individual in your organization that holds your contractor’s license may not suffice to identify your company with the Board of Contractors.
  • Could this cause a conflict with other laws?
    Virginia Code §54.1-1115 is an existing statute that already dealt with the impact of claims by unlicensed contractors. It provides a civil penalty for performing work without a license, and states that “No person shall be entitled to assert the lack of licensure or certification as required by this chapter as a defense to any action at law or suit in equity if the party who seeks to recover from such person gives substantial performance within the terms of the contract in good faith and without actual knowledge that a license or certificate was required by this chapter to perform the work for which he seeks to recover payment.” In the past, courts held a hearing in mechanic’s lien cases of unlicensed contractors to determine if this statute applied. Now, it remains unknown how this statute will interact with the changes to the mechanic’s lien statute.
  • Is it me or are mechanic’s lien confusing?
    No, mechanic’s liens are a trap for the unwary. This law just adds more complications to the process.These articles are meant to bring awareness to these topics and are not intended to be used as legal advice.

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