Well, its that time of year again, the Virginia General Assembly is in session and looking to make changes to all kinds of things here in the Commonwealth. While most of those changes are well outside of the subject of Construction Law Musings, changes to the mechanic’s lien statutes certainly are not. This year, the Virginia General Assembly is poised to make some big changes if certain legislation gets out of committee and passes the legislature, a description and some comments on these follow:
HB752 – Mechanics’ liens; liens attaching to property; memorandum of lien. [Original Description] Removes the exclusion of the attachment of a mechanic’s lien to property improved or repaired when the lien is based on a claim for repairs or existing structures. The bill further removes (i) the ability of a lien claimant to file any number of memoranda of lien including the details relating to the lien and (ii) the provisions of the Code specifying that no memorandum filed shall include sums due for (a) labor or materials furnished more than 150 days prior to the last day labor was performed or (b) material furnished to the job preceding the filing of such memorandum.
[As Recently Amended]- An amendment increases the time to record a mechanics lien to 120 days and reinstates the ability to file any number of memoranda.
Update– As of February 4, the subcommittee has recommended no action until 2027.
Comments: This change would remove some of the “gotcha” type defenses regarding the so called “150 day rule” and, in my opinion, reduce the need for multiple mechanic’s lien memoranda burdening a property because there would be no need to record a lien prior to the end of the project. The 120 days is necessary given the relatively recent ban on “pay if paid” clauses that have made payment terms from owners and general contractors essentially 60 day terms. Of course, if the legislature did not want to extend the lien deadline for filing, it could require payment within 45 days (just saying). In short, this one is more good than bad in my thinking.
HB42 – Posting of building permit; identification of mechanics’ lien agent. Requires a building permit issued pursuant to the Uniform Statewide Building Code to be conspicuously and continuously posted on the property for which the permit is issued until all work is completed on the property. The bill further provides that no person may claim a lien or otherwise perfect and enforce a lien if such person fails to notify any mechanics’ lien agent identified on such building permit. The bill requires a person performing labor or furnishing materials on which a building permit is not posted at the time he first performs his labor or first furnishes his material or, if posted, does not state the name of the mechanics’ lien agent, to determine whether a permit has been issued, the date on which it is issued, and the name of the mechanics’ lien agent, if any, that has been appointed. Under current law, these specifications are limited to one or two-family dwelling units.
Update– As of February 4, the subcommittee has recommended no action until 2027.
Comments: This is a terrible idea in my opinion. Not only does it keep the unjust requirement that the burden is on the contractor to contact the building official to determine if a mechanic’s lien agent is named (as required of the property owner by statute) where a building permit is not posted or the permit fails to name a mechanic’s lien agent (“MLA”), it extends both the requirement to name a MLA and the undue burden on contractors to all projects by removing the one or two-family dwelling unit restriction. In short, this makes all mechanic’s lien rights subject to both the owner of the project and the building official having properly followed the statute (maybe a good thing), but then places the burden of determining if a MLA has been named on the contractor, a party not required to name a MLA. I would hope you, the reader, sees the problem inherent in this legislation. The link above provides some other thoughts on the prior MLA legislative changes leading up to this one.
As always, the help of an experienced Virginia construction lawyer can help you navigate these legislative changes and avoid the pitfalls that these tricky mechanic’s lien statutes put before contractors in Virginia.
I would love to hear any thoughts on this newly introduced legislation.
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