Real Estate Law

Mechanic’s Liens Demand “Perfection” in Virginia

By Bradfute "Brad" W. Davenport, Jr. and Stanley W. Hammer

Mechanic’s liens can be powerful devices for contractors to secure payment. They receive priority over most other liens, and once a mechanic’s lien is recorded, the property in question is encumbered until the lien is resolved. As we have previously reported, however, Virginia courts have consistently recognized that if a claimant fails to scrupulously adhere to the requirements of the mechanic’s lien statute, his lien – and the leverage to secure payment that goes along with it – may be lost.

This feature of Virginia mechanic’s lien law is amply illustrated by recent cases decided by the Virginia Beach Circuit Court related to liens recorded on a residential subdivision project. Under the mechanic’s lien statute, one of the many lien “perfection” requirements is that the claimant must include “a statement declaring his intention to claim the benefit of the lien” in the memorandum of mechanic’s lien. In Heads Up Sprinkler System, Inc. v. Sandler at Ashville Park, LLC, Case No. CL09-874, a bank defending against enforcement of a mechanic’s lien argued that the lien was invalid, and could not be enforced, due to the claimant’s failure to include this simple statement in the lien memorandum – even though there was no allegation that the claimant had not completed the work, or had otherwise failed to satisfy any other lien perfection requirements. The Circuit Court agreed and invalidated the lien.

In two other pairs of cases related to the same residential project, Branscome, Inc. v. Sandler at Ashville Park, LLC, Case Nos. CL09-350 and -351, and Contractors Paving Co. v. Sandler at Ashville Park, LLC, Case Nos. CL09-3790 and -3791, a defending bank argued that mechanic’s liens filed by general contractors were invalid for failure to comply with the requirement that general contractors “file along with the memorandum of lien, a certification of mailing of a copy of the memorandum of lien on the owner of the property at the owner’s last known address.” In lieu of filing certifications of mailing along with their lien memoranda, the general contractors had filed notices addressed to the property owner listing certified mail numbers, indicating that the notices were sent to the owner. Even though it appeared that the owners received notice of the lien filings, the Circuit Court sided with the bank and invalidated the liens. The Circuit Court reasoned that because mechanic’s lien perfection requirements are strictly construed, only a certification that complied with the statute – and not mere notice – would suffice.

The results of these cases stress that courts examining mechanic’s liens will demand strict compliance with the complex web of statutory requirements for their perfection, even if the result might seem unfair. As a consequence, both mechanic’s lien claimants and defendants should engage experienced counsel familiar with the nuances of the statute to give them the best chance of recovering on a claim or securing a claim’s dismissal.

© TROUTMAN SANDERS LLP. ADVERTISING MATERIAL. These materials are to inform you of developments that may affect your business and are not to be considered legal advice, nor do they create a lawyer-client relationship. Information on previous case results does not guarantee a similar future result. Follow Troutman Sanders on Twitter.

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