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Top Ten Keys to Preserving Mechanic’s Lien Rights
Top Ten Keys to Preserving Mechanic’s Lien Rights

The ability to enforce mechanic’s liens rights depends on careful consideration before, during, and after construction. 

Draft the lien with precision:  Judges are instructed to carefully review mechanic’s liens and invalidate certain inaccurate liens.  Ensure you have an accurate and precise description of the owner, contractor, property, type of work, licensure information, affidavit and notice.

File liens quickly if payment is uncertain:  Virginia courts have stated that owners are not required to pay contractors twice for the same construction work.  If the owner pays the general contractor and the contractor pays someone else, the owner does not then also have to pay that same amount to a subcontractor lien claimant.  To avoid this situation, file liens before the owner pays the general contractor if there is a concern that the general contractor will not properly disburse those funds.

Consider multiple contracts:  A lien corresponds to the contract under which the work is done.  Thus, in the event of multiple purchase orders without one master contract, each purchase order may require a separate lien.

Identify the right property:  When in doubt as to the scope or description of the property, get clarification rather than include all of the possible property.  Liens that include any additional land not subject to the work or contract may be unenforceable.

Apportion work among multiple parcels of land:  Many projects involve one contract and project that covers multiple tax parcels.  If possible, ensure that you are able to apportion the work and payment owed on each parcel.  Place on each invoice the separate parcel to which the work/materials are being directed.  Otherwise, the lien may be invalid as a ‘blanket lien’ and unenforcable.

Consider the 150 day rule:  You can only enforce liens for work provided within 150 days of the last day of your work.  For lengthy jobs on which you are receiving partial payment, keep tabs on the age of the outstanding balance.  If work outside that 150 day rule is included, the entire lien may be unenforceable.  (Retainage is not subject to this rule.)

File the lien in compliance with the 90 day rule:  You must file the lien within 90 days of the last day of the last month in which you do work, or within 90 days of project completion, whichever is earlier.  Any liens filed outside this period are unenforceable.  (For bond claims, the federal “Miller Act” and Virginia “Little Miller Act” require a supplier or sub-subcontractor to provide the general contractor with notice of the amount claimed and the party to whom the material was furnished, within 90 days of its last day of work, by certified, registered mail or private process personal service.  Suit must be filed more than 90 days after the last day of work, but within one year of the last day of work.)

File suit within the six month rule:  You must file suit on your lien within six months of its filing or the lien is unenforceable.

Note permits on residential projects:  For one or two family homes, carefully note up front whether a building permit has been issued with a mechanic’s lien agent noted.  This agent must be notified within 30 days of the issuance of this permit or start of construction.  Without this notice, a contractor or subcontractor cannot claim a lien.

Correctly specify interest:  Interest is appropriate and enforceable, but should only be claimed in strict accordance with the contract or pay application under which it corresponds. 

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