More thoughts on Virginia Mechanic’s Liens

As we settled yet another construction case on the courthouse steps today, I began to think about what I should post to begin 2009. Of course, given the construction industry slowdown that is predicted, and the trend at construction projects around the Commonwealth of Virginia that looks to me as if payments will be harder to come by from Owners less willing, for financial reasons, to work with contractors, mechanic’s liens will be more useful, and necessary, now than ever.

Virginia mechanic’s liens are unusually strong because your memorandum of lien takes priority over all prior liens on the property that you have improved (including from the bank that is financing the project) except in very limited circumstances. What this means is that, should you properly file and sue to enforce your lien, you get to foreclose and have first crack at any money. By contrast, a judgment lien takes priority only over liens filed after the lien is recorded.

As I stated in my primer on Virginia mechanic’s lien law in an earlier post, filing a mechanic’s lien in Virginia is a picky business. You need to be sure that you meet your time limits, include the correct information in your memorandum, and assure that you do not lien for a penny more than that to which you are entitled.

Failing to do any of these things can, and will, cause you to lose your lien, killing any advantage that you could have gained by filing the lien and leaving you with run of the mill contract rights (I will be writing on basic do’s and dont’s for construction contracts in a later post). While a breach of contract suit is a viable option, a mechanic’s lien gives you leverage that a mere lawsuit will not.

Scott Wolfe at the Construction Lien Blog has posted several short items on Virginia Lien Law that are worth checking out. However, while these posts are accurate and give the basics of lien law in Virginia, please hire an attorney (whether it’s me or another experienced construction lawyer) to help you file a lien and enforce it in Virginia because of the pitfalls that can occur from the slightest mistake.

Please also check out my links for other construction resources.

Please let me know your thoughts and feel free to e-mail me or comment with any questions.  Also, please subscribe to keep up with this and other Construction Law Musings.