Not getting paid for the work you perform or the materials you provide on a construction project can be frustrating, to say the least. However, before you go ahead and file a Memorandum for Mechanic’s Lien (commonly known as a Mechanics Lien or Construction Lien) in the state of Virginia, you need to be aware of your Rights under Virginia’s Mechanics Lien Law. While the filing of a Virginia Memorandum for Mechanic’s Lien appears to be simple, the actual process is complicated and filled with requirements that – if gone unmet – could result in the loss of your Lien Rights altogether.
In an effort to keep Virginia contractors, subcontractors, materialmen and suppliers informed of their Rights in the state of Virginia, we have created a basic guide which covers many of the key requirements needed to file a Virginia Memorandum for Mechanic’s Lien. Keep in mind that the following is not presented as legal advice, you will surely need an attorney to help you interpret the law. However, if it is your goal to keep your job related accounts receivables secured, these nuggets of information may surely prove to be useful.
So, what should you be aware of when filing a Memorandum for Mechanic’s Lien in Virginia?
Be aware of the 90 Day Rule
In the state of Virginia, you have 90 days from the last day of the month in which you last performed labor or furnished materials to the project. There are no exceptions to this rule. If the project is not complete but your work is finished, then you need to count 90 days from the last day of the month you last performed work or furnished materials. Any Memorandum for Mechanic’s Lien filed outside of the 90 day period will be invalid, and you may lose your Lien Rights.
Understand what costs can be included in the Lien
Virginia has strict statutes regarding what you can and cannot claim in a Memorandum for Mechanic’s Lien. Under the 150-Day Rule, no Memorandum for Mechanic’s Lien can include amounts for labor and/or materials furnished more than 150 days prior to the last day on which the claimant provided work or materials for the project. In order to comply with Virginia’s Lien Law, the claimant must determine the last date on which he performed substantial work or provided materials to the project, then count back 150 days from the date preceding that day. Any unpaid amount that falls within this 150 day window can be included in the Memorandum for Mechanic’s Lien.
Please remember that claimants are only allowed to claim labor and/or materials furnished for the project at hand. Amounts due from the same client for labor or materials provided on other projects should NOT be included as they can jeopardize the entire Memorandum for Mechanic’s Lien. In addition, attorney’s fees and expenses incurred for reasons unrelated to adding value to the property in discussion should not be included. Interest on the lien amount, however, can be included and should be noted on the Memorandum for Mechanic’s Lien (referencing the date interest begins and the rate).
Residential projects are required to provide written notice to the lien agent
Residential projects vary from their commercial counterparts when it comes to the requirements for filing a Virginia Memorandum for Mechanic’s Lien. In the case of a residential project, the Property Owner may appoint a “Mechanics Lien Agent” to handle contractor legalities. Should a Mechanics Lien Agent be appointed to the property you are provided work or materials for, you must File and Serve a Notice to Mechanic’s Lien Agent (known as a Preliminary Notice in other states) within 30 days of last providing service or labor to the project OR 30 days from the date the building permit was issued. Any work performed or materials provided prior to providing a Notice to Mechanic’s Lien Agent cannot be included in the Memorandum for Mechanic’s Lien.
This article covers only a few of the tidbits regarding Virginia Liens. To fully comprehend your Lien Rights, we recommend a professional and experienced Preliminary Notice and Mechanics Lien Service to prepare and serve your Memorandum for Mechanic’s Lien, Notice to Mechanic’s Lien Agent and other notices. Using a service like CRM, will ensure that the proper research is performed so you don’t have to forfeit your Virginia Lien Rights to due any faulty or misinformation.
CRM Lien Services will thoroughly research and verify all of the information included in your Virginia Memorandum for Mechanic’s Lien and Notice to Mechanic’s Lien Agent so your Lien Rights are fully protected. We stay current with the changes to the Virginia Lien Law so your notices are prepared according to the latest statutes.
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