The mechanics lien is a legal remedy available for construction participants seeking to recover payment from their clients. Filing a mechanics lien is almost always successful in getting claimants paid after a payment dispute.
Unlike other payment negotiation methods, the mechanics lien actually encumbers a property. It means that when a mechanics lien is recorded, the market value of the property is reduced because potential investors can see that it comes with outstanding payment issues. Owners are, therefore, more willing to find ways to release payment just so they can get rid of a mechanics lien.
In Virginia, filing a mechanics lien can get you paid as long as you follow the statutory rules and requirements to a tee. This guide discusses these rules to help you successfully file a valid Virginia mechanics lien.
Who can file a mechanics lien in Virginia?
Parties who provide construction services worth over $150 are entitled to file a mechanics lien in Virginia. These parties include but are not limited to general contractors, subcontractors, and material suppliers. Equipment lessors also have lien rights in Virginia.
Preliminary notices in Virginia
Virginia only has one required preliminary notice, also known as the Notice to Lien Agent.
Who must serve a Notice to Lien Agent?
The Virginia Notice to Lien Agent must be served by parties who are working on a one- or two-family residential project with a building permit that contains the name and contact information of the mechanics lien agent.
If you are not working on a 1- or 2-family housing project, or if you are but it does not have a building permit that mentions a mechanics lien agent, you are not required to serve a Virginia preliminary notice.
What must be included in the Notice to Lien Agent form?
The Virginia Notice to Lien Agent form must contain the following details:
- Your name, mailing address, and telephone number
- Your license or certificate number issued by the Board for Contractors, if any
- The date the license or certificate was issued and the date the license or certificate expires
- The building permit number in the building permit
- A description of the property as shown in the building permit
- A statement that the person filing the notice seeks payment for labor performed or material furnished
There is no statutory template for the Virginia preliminary notice. Your template will be considered valid as long as it contains all the required details as mentioned above. Note that most of the required pieces of information may be found in the building permit, so ensure that you verify your Virginia preliminary form against the details written in the permit.
When do you serve a Notice to Lien Agent?
The deadline for the Virginia preliminary notice is the 30th day since the date you first started furnishing labor or materials to a project. In case the building permit is posted after your first day of work, the deadline is moved to the 30th day since the date the permit is issued.
What happens if you do not serve a Notice to Lien Agent?
You will still have your lien rights, but the amount that you can claim will be limited to the amount that is yet to be disbursed to the general contractor or the party who hired you.
If, for example, you served a preliminary notice after the initial 30-day filing period and the balance to the general contractor is only $10,000, you can only make a mechanics lien claim for up to $10,000, regardless of whether you are owed more than that.
To ensure that your full lien rights are protected, serve your preliminary notice in Virginia early, way before the deadline.
When do you file a Virginia mechanics lien?
You must file your Virginia mechanics lien within 90 days of the date you last furnished labor or materials to the project, but no later than 90 days after the building, structure or railroad was completed.
You should also note that in Virginia, a mechanics lien can only cover the value of the services performed within the preceding 150 days of the last day of work. If you are working on a project for more than 150 days, you are allowed to file multiple mechanics liens.
How to file a mechanics lien in Virginia
The details required to be included in a Virginia mechanics lien form—also known as the Memorandum of Lien—are specified under Virginia Code § 43-4. Virginia laws state that your mechanics lien template must include the following details:
- the names and addresses of the property owner
- the name and address of the claimant of the lien
- the amount of your claim
- the time or times when the amount is or will be due and payable
- the date from which interest (of the stated amount) is claimed
- a brief description of the property
- a statement declaring your intention to claim the benefit of the lien,
- your license or certificate number issued by the Board for Contractors, if any
- the date the license or certificate was issued and the date the license or certificate expires
Virginia laws also prescribe two different templates for the mechanics lien. For general contractors, the Virginia mechanics lien template will be considered sufficient if it is substantially in the following form:
Memorandum for Mechanic’s Lien Claimed by General Contractor.
Name of owner: _______________________________________________________________________
Address of owner: _______________________________________________________________________
Name of claimant: _______________________________________________________________________
Address of claimant: _______________________________________________________________________
Contractor license or certificate number of claimant
(if applicable): _______________________________________________________________________
Issuance date of license or certificate
(if applicable): _______________________________________________________________________
Expiration date of license or certificate
(if applicable): _______________________________________________________________________If no contractor license or certificate number is included, the claimant certifies that such a valid license or certificate is not required by law for the work done for which the benefit of a lien is claimed.
1. Type of materials or services furnished: ______________________________________________________________________________________________________________________________________________ _______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
2. Amount claimed: $ _______________________________________________________________________
If any part of the Amount claimed is not due as of the date of this mechanic’s lien, identify the date or event upon which it will be due and the sum(s) to which the due date(s) or event(s) apply: _______________________________________________________________________
3. Type of structure on which work done or materials furnished: _______________________________________________________________________
_______________________________________________________________________
4. Brief description and location of real property:
_______________________________________________________________________
5. Date from which interest on the above amount is claimed:
Date: _______________________It is the intent of the claimant to claim the benefit of a lien.
The undersigned hereby certifies that he has mailed a copy of this memorandum of lien to the owner of the property at the owner’s last known address: ……………………………. (address), on …….. (date of mailing).
_______________________________________________________________________(Name of claimant).
Affidavit.
State of Virginia,
County (or city) of ………………, to wit:
I, _______________________ (notary or other officer) for the county (or city) aforesaid, do certify that …………………. claimant, or ……………., agent for claimant, this day made oath before me in my county (or city) aforesaid that ………………… (the owner) is justly indebted to claimant in the sum of ………….. dollars, for the consideration stated in the foregoing memorandum, and that the same is payable as therein stated.
Given under my hand this the …….. day of …………….., 20….
_______________________________________________________________________(Notary Public or Magistrate, et cetera.)
For subcontractors and other parties, the Virginia mechanics lien must substantially be in the following form:
The Virginia mechanics lien must be notarized before filing, regardless of your role in the project.
Note that prior to filing a mechanics lien, general contractors are required to deliver a copy of the lien to the property owner’s last known address. General contractors are required to prepare a certification that a copy of the mechanics lien was served on the property owner prior to filing the lien. This certification is recorded together with the actual mechanics lien.
2. Record the Virginia mechanics liens
Once the Virginia mechanics lien form is all filled out, you need to have it recorded in the office of the county clerk in the county where the property is located.
Recording a mechanics lien may be done by mailing the mechanics lien documents to the clerk’s office, or by actually paying a visit to the said office. The county clerk files your documents after you pay the filing fees.
If you are mailing your Virginia mechanics lien, you should call the clerk’s office to inquire how much the filing costs are. The exact amount must be included in your parcel. If you are personally filing the mechanics lien in the clerk’s office, be sure that you have enough amount to cover the costs.
Also, take note of the deadline for filing a Virginia mechanics lien. All Virginia mechanics liens must be filed within 90 days of your last day of work, but no later than 90 days after overall project completion. Failing to file a mechanics lien within the deadline will extinguish your lien rights over that project.
Note that general contractors must file the Virginia mechanics lien together with the certification that they have served a copy of the mechanics lien on the owner.
For parties who are not general contractors (e.g. subcontractors and material suppliers), you are also required to serve the page of the Virginia mechanics lien that says “Notice [to Owner]” on the property owner. Serving this Notice must be done on the day of filing the mechanics lien.
3. Enforce/release the mechanics lien
After recording the mechanics lien, you will either finally receive your payment or you won’t. If you get paid—which is most likely to happen—you are technically not obligated to do anything further.
Virginia does not have clear rules on releasing a satisfied mechanics lien. However, you can still file a satisfaction of the lien in the same county clerk’s office to get rid of the recorded lien. This step is usually discussed with the property owner as part of the payment terms.
It is also possible that you will not receive your payment at all. If this is the case, the next step is to enforce the mechanics lien by initiating a foreclosure lawsuit. Winning the lawsuit means that you can recover your payment through the foreclosure sale of the property.
Note that a mechanics lien in Virginia expires within 6 months of the recordation date or within 60 days of project completion/termination, whichever is later. You should enforce a mechanics lien before the mechanics lien expires; otherwise, your foreclosure suit will not succeed as the lien will no longer be enforceable.
Before filing the foreclosure lawsuit, consider serving on the owner a Notice of Intent to Foreclosure. This notice lets them know of your plan to launch a full-blown lawsuit, which could prompt them to release your payment to avoid facing a legal battle.
Important deadlines to remember in filing a Virginia mechanics lien
Best practices when filing a mechanics lien in Virginia
1. Serve the required preliminary notice early
Virginia requires only a small pool of construction participants to serve a preliminary notice. If you are one of the parties required to serve the Notice to Lien Agent, be sure to serve this preliminary notice as early as possible to ensure full coverage for your mechanics lien. You do not want to limit the amount that you can file on a Virginia mechanics lien simply for failing to serve the preliminary notice on time.
2. File multiple mechanics liens if necessary
In Virginia, a mechanics lien can recover the value of your services starting from the preceding 150 days before your last day of furnishing labor or materials. If your work on a project lasts for more than 150 days, you are allowed to file multiple mechanics liens. Take note of this rule to ensure that you do not unintentionally lose your lien rights.
3. Serve a Notice of Intent to Foreclose before initiating a lawsuit
A foreclosure lawsuit will be expensive and it will require your time and resources. You could potentially avoid having to go through it by serving on the property owner a Notice of Intent to Foreclose prior to initiating the suit. The owner might finally release your payment once they receive your ultimatum, as they are also most likely not willing to go through a full-blown lawsuit.
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