Posts Tagged ‘Virginia’

What Costs / Labor To Include In Your Lien?

On February 15, 2009 Author By Scott Wolfe Jr        

It’s been an interesting week on the web as it relates to mechanic’s liens, as I’ve run across a number of web posts about the types of services that can be included in a lien.

Let’s look at the matter theoretically.   Construction lien laws are normally drafted to protect contractors, who invest labor and expense into the improvement of a property.  However, since the laws also balance the property rights of persons or organizations, each state certainly does something to qualify what types of labor and expense can be represented in a lien, and which cannot.

The question here, therefore, is quite simple:   have you performed work or provided materials that can be the subject of a lien?

It’s one of the most important questions a contractor or supplier can ask when determining how to best collect on a non-paying account or project.   If you work does not qualify for a lien, for example, there is no need to even consider if notice is required and other lien filing requirements.

It’s important to consult the laws or your particular state to determine what type of materials and labor can be the subject of a lien, and which cannot.  However, two recently decided cases in Virginia and Kentucky are revealing of some general principals that are followed by most states.  The principal is essentially this:  you can only lien for labor and materials that actually go into improving the property.

What does this exclude?

In Virginia, Virginia Lawyers Weekly reports that a Hanover County Circuit Court invalidated a mechanic’s lien filed by a contractor that incurred costs in anticipation of construction of a steel building, but did not provide labor or materials actually employed in construction of the building.

The case is captioned Dallan Construction Co. v. Super Structures General Contractors, Inc, and can be downloaded here.

Similarly, in Kentucky, the Kentucky Court of Appeals held that “mowing, trimming, edging and street cleaning” did not “permanently improve the property,” and therefore, a mechanics lien was not allowed to be filed for the services provided.  That case is discussed at the South Carolina Community Association Law Blog, and is captioned Steeplechase Subdivision Homeowners Association, Inc. v. Thomas, Ky. Ct. App. 2008.

Posted in:     Filing Requirements, Mechanics Lien  /  Tags: , , , , , , , ,   /   2 Comments

Open Accounts and Mechanics Liens

On January 26, 2009 Author By Wolfe Guest        

The following post was written by a guest contributor to the Construction Lien Blog, Christopher Hill.    Chris a construction attorney in the state of Virginia, leading the construction practice group at Durrette Bradshaw.  He publishes a construction law blog titled “Construction Law Musings.”   [Chris' profile at Construction Lien Blog]

Scott Wolfe, one of the contributors to this blog asked me for a piece on Virginia Mechanic’s Liens.  Scott has written several good pieces on liens in the Commonwealth of Virginia, and I hope that this one proves as helpful.

In researching liens in the Commonwealth of Virginia, I ran across a question that should be on the minds of construction professionals in Virginia, particularly suppliers of materials.  The question is simply “On an open account (based on a credit agreement or other arrangement), is each delivery to a particular contractor its own “work” such that the 90 day clock runs from the completion of each delivery, or do all deliveries to a particular project constitute the “work” on that project such that the 90 day clock only runs from the last delivery to the job site?” (How’s that for simple!)

The answer to this question is (drum roll please!)- “It depends.” (I know, you are shocked at such a “lawyerly” answer.)

The Virginia Supreme Court weighed in on this question in United Savings Association of Texas, F. S. B. v. Jim Carpenter Company, Record No. 951470 (2006).  The Jim Carpenter case involved three different cases of liens that were filed by material men pursuant to various forms of open account contracts.  You can read the case to see the particular facts of the case but in essence the owners/general contractors on the project argued that the material men could not lien for any materials delivered to a particular project outside of the 90 day lien window and the material men argued that all of the materials were delivered to the same projects and therefore all constituted one continuous contract.

The Virginia Supreme Court held that the intent of the parties controls.  On the one hand, general deliveries to a contractor for general use (i. e. warehousing for use at some time in the future) each constitute a separate contract, each with its own 90 day clock.  On the other, if the material deliveries upon which the lien is based are all delivered for the benefit of a particular project then they all constitute one continuous contract and the 90 day clock does not start to run until the last delivery is completed.

What do you, as a construction professional, take from this case?  Be careful with your open accounts.  Make sure that when delivering materials to a job site based upon an open account you are exceedingly clear with your purchase order or takeoff language that certain materials are to be delivered to a certain project.  Failure to do so may lead a court to decide that the materials were a general delivery and cut off much or all of your recovery.

As with everything else to do with the picky issues with mechanic’s liens, all of the other requirements (150 day look back, notice, etc.) apply and good legal assistance is a must.

If you are interested in more thoughts on Virginia construction law, please check out my Construction Law Musings blog and join the conversation.

Posted in:     Filing Requirements, Mechanics Lien  /  Tags: , , , ,   /   1 Comment

Caution: Lien Laws in are Hyper-Technical

On December 29, 2008 Author By Scott Wolfe Jr        

In most states, the liens laws are hyper-technical.   This means that the laws have many requirements, and that courts strictly construe the rules against the party filing construction liens.

This is true for nearly every state.

While laws across the nation provide lien rights to those in the construction industry, because of the power of these instruments most states require that the liens be filed in exact accordance with the law to be valid.

This is especially the case with regard to the required contents of a lien.

Each state has different requirements for what must be stated within a mechanic’s lien, and how that information must be stated.

Every state, for example, will require the claimant to identify the property being liened.  In Louisiana, Washington, and Virginia, however, the law requires that the lien use the legal property description and not simply a municipal address.   The proper identification of property can be so important we’ve written an entire blog post about it here.

In Virginia, the laws are even stricter.   Because the Virginia lien law is land record based, the claimant is expected to perform a complete title search to acquire the exact legal owner and legal property description.   A lien that does not lien the exact owner, at the exact property for the exact amount due, can be deemed invalid by courts.

Zlien does this leg work for your company, helping your company properly prepare these important legal forms.   Our professional legal document preparers are familiar with the lien and notice forms in your state, and can help your company Lien Smarter.

Posted in:     Louisiana, Mechanics Lien, Washington  /  Tags: , , , , , , , , , , ,   /   1 Comment
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