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[dt_fancy_separator separator_style=”dotted” separator_color=”accent” el_width=”95″][dt_fancy_title title=”1. Who May Have A Lien?” title_align=”left” title_size=”h3″ title_color=”accent” separator_style=”dashed”]
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Laborers and furnishers of material or equipment of the value of $150 or more. Suppliers to suppliers may have lien rights; it hasn’t yet been determined. Though a supplier cannot bring a claim for rental equipment it uses to supply a project, a contractor or subcontractor who performs WORK on a project can lien for rental equipment uses in performing its work. NOTE that contractors and subcontractors are required to be licensed, and unlicensed contractors and subcontractors who have knowledge of the licensing requirement do not have lien rights. Further, if a contractor or sub has no lien rights, then those supplying them labor or materials will not have lien rights either, because a claimant’s lien rights are limited to the amount owed to their customer. NOTE that the claim of a person supplying labor or materials to a subcontractor cannot exceed the amount for which the subcontractor could file its claim. Note also that architects who supervise construction may also have lien rights. [43-3, 43-11, 43-7, 43-9; Dean Steel Erection Co., Inc. v. Chelsea GCA Realty, Not Reported in S.E.2d, 50 Va. Cir. 311, 1999 WL 1419252 (Va. Cir. Ct. 1999); Cain v. Rea, 166 S.E. 478 (1932); Schor at §47.03[B]]

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Subs, laborers and suppliers of materials to the general or first-tier subcontractors. Suppliers to suppliers are probably not covered. Rental charges and rental equipment are considered ‘material.’ [2.2-4337; R. C. Stanhope, Inc. v. Roanoke Const. Co., 539 F.2d 992 (1976)].

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Owner’s interest in build­ing or structure, and land necessary for the con­venient use and enjoyment thereof. [43-3] Where the work is only contracted for by the tenant, a lien cannot be placed on the property. [T&M Elec., Inc. v. ProLogis Trust, 70 Va. Cir. 403, Not Reported in S.E.2d, 2006 WL 1101740 (Va. Cir. Ct.,2006)]

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Contractor’s or subcontrac­tor’s payment bond. [2.2-4337] (Contrac­tor or subcontractor may provide certified check or cash escrow instead). [2.2-4337]

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ALL PROJECTS:

All claimants who wish to make the owner and/or the general contractor personally liable to the claimant. If claimant is willing to rely solely on its lien rights, a preliminary notice is optional, but not required. [43-11]

ONE- OR TWO-FAMILY RESIDENTIAL DWE­LLING:

All claimants, as long as the building permit contains the name, mail­ing address and telephone number of the mechanics lien agent. [43-4.01]

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A preliminary notice is not required.

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ALL PROJECTS:

-WHERE CLAIMANT SEEKS TO MAKE THE OWNER OR GENERAL PERSONALLY LIABLE: A preliminary notice is required. It should be given to the owner (or his agent) or the general contractor, or both. It is recommended that each notice be given to both, as that will make both the owner AND the general contractor personally responsible for the debt. If the claimant only wishes to make one of those parties personally liable for the debt, then the notices need only be given to that party. [43-11]

LIEN ONLY:

No one.

RESIDENTIAL:

Mechanic’s lien agent. [43-4.01]

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Not applicable.

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ALL PROJECTS, RE: PERSONAL LIABILITY:

No specific time is stated for giving this notice, but it is recommended that it be received prior to claimant’s first delivery or performance, or very shortly after commencing. NOTE THAT the claim of a person supplying labor or materials to a subcontractor cannot exceed the amount for which the subcontractor could file its claim. [43-11]

RESIDENTIAL:

Notice must be received within 30 days of first furnishing labor or materi­als, or within 30 days of date the building permit is issued. [43-4.01] If no­tice is received later, claim is limited to labor or ma­teri­als furnished on or after date notice is given. [43-4.01] If the building permit is not posted, or if it is posted but does not include the name of the mechanic’s lien agent, then the claimant must con­tact authorities to find out date permit was issued and the name of the mechanics’ lien agent, if any, than has been appointed. [43-4.01]

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Not applicable.

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ALL PROJECTS, RE: PERSONAL RESPONSIBILITY:

-Nature and character of claimant’s contract

-Probable amount of claimant’s claim.

NOTE that the claim of a person supplying labor or materials to a subcontractor cannot exceed the amount for which the subcontractor could file its claim. [43-11]

RESIDENTIAL:

-Name, mailing address & phone number of claimant and of person sending no­tice, as well as the person’s license or certificate number, if any, issued by the Board for Contractors, and the date the license or certificate was issued and the date it expires.

-Building permit number

-Description of the proper­ty as shown on building permit

-Statement that person fil­ing the notice seeks pay­ment for labor performed or materials furnished. [43-4.01]

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Not applicable.

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ALL NOTICES:

Registered or certified mail, or personal service, with a return receipt or other evidence of delivery. The notices may also be recorded and indexed in the county clerk’s office. Notices that are designed to make the general contractor or owner personally liable for the debt must be actually delivered to be effective. On a one- or two-family residential dwelling, where a preliminary notice is given to a mechanic’s lien agent, then a return receipt or other receipt showing delivery of the notice to the addressee or written evidence that such notice was delivered by the postal service or other carrier to but not accepted by the addressee shall be prima facie evidence of receipt. [43-14.1, 43-4.01, 43-11]

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Not applicable.

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An interim notice is not required.

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An interim notice is not required.

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All claimants. [43-3, 43-7, 43-9, 43-11]

Note that where the general files a lien but a sub or sup­plier doesn’t, the latter may still bene­fit from general’s lien if claim­ant gives writ­ten no­tice of his or her claim against the general or sub to the owner or agent before the general’s lien is actual­ly paid off or discharged. It is strongly recommended that the claimant not plan on this method of recovery, but instead follow the requirements for filing and enforcing a lien, to ensure maximum protection. [43-18]

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All claimants who have a contract with a sub, and who do not have a contract with the general, and seek to collect from general’s bond. [2.2-4341; §]

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ALL PROJECTS, RE: PERSONAL RESPONSIBILITY:

-County Clerk

-Owner and/or general contractor, whomever claimant is seeking to hold personally liable. [43-11]

LIEN CLAIM:

All Claimants:

County clerk. [43-4]

General contractor:

Must also give notice to Owner, and prepare a Certification of Mailing of the memorandum of lien. [43-4]

Sub and supplier to sub must also give notice to owner or agent. Per Schor, this notice should be given to the general contractor as well. [Schor at §47.03[D]]

Sub-sub and supplier to sub: Must give notice to owner (or owner’s agent) and general contractor. [43-7, 43-9]

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To the contractor. [2.2-4341]

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TO MAKE THE OWNER AND/OR GENERAL CONTRACTOR PERSONALLY LIABLE:

After the claimant’s labor or materials are furnished and within 30 days of completion or termination of the project. The sooner the better, however, because the owner’s and/or general’s liability will be limited to the amount owed to the general or, where supplying a sub, to the sub, at the time this notice is given. [43-11]

LIEN NOTICE:

Filed and received after work is commenced or material furnished, but within 90 days of the last day of the month in which claimant last furnishes labor or materials. (Also must be within 90 days of completion or termination of project.) NOTE, HOWEVER, that this Notice covers materials delivered within 150 days preceding the last day labor or materials were furnished before the notice was given, so give notice in time to cover outstanding materials. IF THE LIEN INCLUDES LABOR/MATERIALS PROVIDED MORE THAN 150 DAYS BEFORE THE LAST DAY LABOR/MATERIALS WERE PROVIDED, THE LIEN WILL BE INVALID. Note that even if the most recent labor or materials were actually paid for and not included in the lien, that last date of furnishing is the one that is used for calculating the covered items. [Smith Mountain Bldg. Supply, LLC v. Windstar Properties, LLC, 672 S.E.2d 845 (Va.,2009)] Claimant can file more than one lien notice, if necessary. NOTE ALSO, that the lien claim can include retainage and amounts not yet due because the party with whom the claimant contracts has not yet been paid for them, but the lien cannot exceed the amount owed to gen­eral or sub at the time the notice is received, so it is advantageous to file early. [43-4, 43-7, 43-9]

NOTE FURTHER that where the claimant supplies labor or materials to a condominium or development, in order to have lien rights on each lot or each condo, the claimant must file, IN ADDITION TO and together with the memorandum of lien, a notice with the clerk of the circuit court a document setting out (a) full disclosure of the lien to be claimed; (b) the amount claimed against each lot and (c) a description of the development. This notice must be filed before the property is sold. (43-3)

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Received within 90 days after claimant’s last delivery of the labor or materials for which it is making its claim. But this time limit does not apply to amounts withheld as retain­age. [2.2-4341]

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TO MAKE THE OWNER AND/OR GENERAL CONTRACTOR PERSONALLY LIABLE:

-Filed with the county clerk

-Mailed to owner and/or general contractor by registered mail or cer­tified mail, with return receipt. [43-11]

LIEN:

-Filed with the county clerk; [43-4]

-Mailed to owner or agent by registered mail or cer­tified mail, or personal service by sheriff or con­stable; and

-Mailed to general contrac­tor by registered or certified mail or by per­sonal service by sheriff or constable. NOTE that for condos, clai­mant may give notice for all units, if doing work under a sin­gle contract. [43-3]

-The general contractor who files a lien must simultaneously mail a copy to the owner , and it appears that mailing is all that is required, it is not essential (though it is recommended) that the general contractor ensure receipt. [43-4]

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Registered or certified mail. The consequences of refusal of delivery are not clear, thus strongly recommend ensuring actual receipt. [2.2-4341]

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TO MAKE THE OWNER AND/OR GENERAL CONTRACTOR PERSONALLY LIABLE:

A correct account, verified by affidavit, of the claimant’s claim against the general contractor or subcontractor, for work done or materials furnished and of the amount due. [43-11]

LIEN:

-Called a Memorandum of Lien

-Name of owner

-Name of lien claimant, as well as claimant’s license or certificate number, if any, issued by the Board for Contractors, and the date the license or certificate was issued and the date it expires.

-Amount and consideration of claim (Note that a claimant’s claim cannot exceed the amount for which its customer can claim, and where a claimant or a claimant’s customer is unlicensed and knows of the licensing laws, neither the customer nor the claimant will have lien rights. Note also that the lien claim can include retainage and amounts not yet due because the party with whom the claimant contracts has not yet been paid for them.) Remember also that the lien notice covers materials delivered within 150 days preceding the last day labor or materials were furnished before the notice was given, so give notice in time to cover outstanding materials. IF THE LIEN INCLUDES LABOR/MATERIALS PROVIDED MORE THAN 150 DAYS BEFORE THE LAST DAY LABOR/MATERIALS WERE PROVIDED, THE LIEN WILL BE INVALID. NOTE ALSO that work performed offsite should not be included in a lien, and if it is, it may invalidate the lien. [43-7, 43-9; Dominion Trust Co. v. Kenbridge Const. Co., Inc., 448 S.E.2d 659 (1994)] [43-3, 43-4, 43-11, 43-7, 43-9]

-Description of the type of materials or services provided

-Date(s) claim due and pay­able

-Brief description of prop­erty

-Verified by oath of claimant or claimant’s agent. Neither the statute nor the case law clarifies whether the claimant’s attorney may sign the lien.

-Statement declaring the claimant’s intention to claim the benefit of the lien.

NOTE that the General Contractor must also, at the time of filing the lien, file 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. [43-4; Britt Const., Inc. v. Magazzine Clean, LLC, 271 Va. 58, 623 S.E.2d 886 (Va. 2006)]

NOTE also that where the claimant supplies labor or materials to a condominium or development, in order to have lien rights on each lot or each condo, the claimant must file, IN ADDITION TO and together with the memorandum of lien, a notice with the clerk of the circuit court a document setting out (a) full disclosure of the lien to be claimed; (b) the amount claimed against each lot and (c) a description of the development.[ (43-3)]

Please contact Levy von Beck and Associates for form information.

-Subs and sub’s sup­pliers must file lien, but their notic­e to owner and gener­al need only in­clude the amount and char­acter of their claims. Or, simply send a copy of the lien. [43-7, 43-9]

-NOTE sub’s claim is ultimately limited to the amount due or to become due to general as of time notice is given, and sub’s suppli­er’s claim is ultimately limited to amount sub could then claim. [43-7, 43-9]

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-Amount claimed

-Name of person for whom work was performed or to whom material was furnished. [2.2-4341]

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Before the later of:

-Six months from filing the lien OR

-60 days from completion or termination of the project. [43-17]

Note that trustees and deed of trust beneficiaries are necessary parties to a foreclosure action, but the beneficiaries of a trust indenture are not. [Glasser & Glasser, PLC v. Jack Bays, Inc., 741 S.E.2d 599 (2013)]

NOTE that where a lien release bond has been posted, the principal and the surety on the bond are necessary parties, but the owner of the real estate, the trustee under the deed of trust, and the beneficiary of the deed of trust are no longer necessary parties when their only relation to the litigation is their interest in the property that had been subject to the lien but was no longer encumbered once the bond had been posted. Note, of course, that they may still be necessary parties to a breach of contract claim. [Synchronized Const. Services, Inc. v. Prav Lodging, L.L.C., 764 S.E.2d 61 (Va. 2014)]

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More than 90 days but less than one year after claimant’s last delivery. [2.2-4341] This deadline applies even if the terms of the bond do not expressly limit the bond to that time period or the limiting statute. [APAC-Atlantic, Inc. v. General Ins. Co. of America, 643 S.E.2d 483 (Va. 2007)]