Posts Tagged ‘Summit Community Bank v Blue Ridge Shadows Hotel & Conference Center’

Lien laws vary from state-to-state, but across the country it’s a consistent principle that contractors and suppliers can only file mechanic’s liens for work they perform on a construction improvement project.

This begs the very important questions – what is a construction improvement project? And beyond that, what is a construction improvement?

With respect to Virginia’s law on the issue, the Virginia Real Estate, Land Use and Construction Law Blog just posted on this topic: The Line Between Furniture and Fixtures: What Constitutes An Improvement, Part II. The post quotes a recent federal civil case, Summit Community Bank v. Blue Ridge Shadows Hotel & Conference Center, LLC, whereby the judge distinguished between installed cabinets (which can be liened) and furniture delivered to the project (which cannot be liened) saying:

It is not sufficient for materials to simply add value to a building by their mere presence without any further connection to the building.

The law in Washington and Oregon is very similar to Virginia. In both of these states, claimants may lien for work they perform in the “improvement of real property” or work used “in the construction of any improvement.”

Louisiana’s lien law is a bit more unique in this regard, and perhaps the most unique in the nation. In Louisiana, claimants may file a lien whenever they perform services in connection with a “Work.” A “Work” is defined as follows by the statute (LA RS 9:4808):

A work is a single continuous project for the improvement, construction, erection, reconstruction, modification, repair, demolition, or other physical change of an immovable or its component parts.

I once represented a claimant in a Louisiana action against it to remove a mechanics lien, whereby I submitted a memorandum to the court distinguishing “work” (little w” from “Work” required by the statute (big w). I quoted the 1985 Louisiana Fourth Circuit case Lake Forest, Inc. v. Crilot Co., et al (466 So.2d 61) wherein a subcontractor’s lien against a property for excavation work related to the operation of a sand pit was challenged.

Interesting about this case is that there was no building or “improvement,” but the lien was found valid because the work was considered a “Work,” with the court explaining as follows:

Although “improvement” language is used in this general statement, La. R.S. 9:4808 contains a broader wording. The definition of “work” as “a single continuous project for the improvement…or other physical change of an immovable…” appears to apply to this unique sand pit operation.

We conclude that this sand pit…was designed to improve Lake Forest’s property. At the very least the operation was for the “modification…or other physical change of an immovable.”

Summary

Here is a short summary of this post. It’s important to know what is and what is not an “improvement” to determine whether you can in fact file a construction lien for the work or materials you provided. It’s also important to answer that question within the context of the laws applicable to your project. Most of the stuff is black & white…but in some cases, there can be a little gray.

This article was originally posted on Express Lien’s topic-specific Construction Lien Blog.