A Virginia “mechanic’s lien” is a security interest in real estate for contractors who supplied labor or furnished materials for that property. This security provides another avenue for recovery, and can be filed in conjunction with a breach of contract claim. It also can be invaluable when a higher tier contractor becomes insolvent. In order to file a mechanic’s lien, a memorandum of mechanic’s lien must be filed in the land records of the county where the construction project is located. Generally, your lien cannot seek recovery of labor or materials (other than retainage) furnished more than 150 days prior to the last day on which labor was performed.
Time is of the essence in filing your mechanic’s lien! Typically, a mechanic’s lien must be filed within ninety (90) days of the last day of the month the contractor last supplied labor or furnished materials. From there, you’ll have six (6) months to file a lawsuit in order to enforce the lien.
Owners of a project may be able to assert a number of defenses, including a defense of payment. The defense of payment recognizes that an owner should only be required to pay for the project once, and thus subcontractor liens will fail if the owner can establish prior payment. A skilled Virginia construction lawyer can assist in properly drafting and filing a memorandum of mechanic’s lien, enforcing the lien, or defending against such liens.
Due to policy considerations, contractors cannot file mechanics’ liens on public projects. Instead, prime contractors are typically required to provide payment bonds. At the federal level, these requirements are governed by the “Miller Act,” while the “Little Miller Act” governs state projects in Virginia. These bonds are intended to secure payment of subcontractors and second-tier subcontractors for performance of their work.
All bond claimants must file suit on the bond within one year of last supplying labor or material for the project. However, additional requirements are imposed on second tier subcontractors (i.e. sub-subcontractors). These claimants must provide written notice to the prime contractor within ninety (90) days from the date on which the second-tier subcontractor last supplied labor or materials for which the claim is made. A knowledgeable Virginia construction attorney can assist in properly providing such notice, and enforcing a payment bond claim.
In Virginia, it is prohibited to “engage in, or offer to engage in, contracting work” unless a contractor maintains a license. Va. Code § 54.1-1103. The penalties for engaging in contracting work without a license can be severe. In addition to being a class 1 misdemeanor, lack of licensure is considered a “prohibited practice” under the Virginia Consumer Protection Act (“VCPA”). Practicing without a license may also preclude recovery for work performed. However, unlicensed contractors may still be able to enforce payment obligations in instances where the contractor (i) gives substantial performance within the terms of the contract in good faith and (ii) did not have actual knowledge that a license or certificate was required by this chapter to perform the work for which he seeks to recover payment. Va. Code § 54.1-1115. A knowledgeable construction attorney can help you navigate the proper license requirements in Virginia, as well as pursuing or defending claims related to lack of licensure.