The forms provided in the Virginia Code for mechanic’s liens have been amended effective July 1, 2019. Virginia Code §43-5 will soon state:
The memorandum and affidavit required by §43-4 shall be sufficient if substantially in form and effect as follows:
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.
- Type of materials or services furnished
- 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)
- Type of structure on which work done or materials furnished
- Brief description and location of real property
- Date from which interest on the above amount is claimed
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).
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.)
In other words, the only change to this form is that after the provision of the amount claimed. If any part of that amount claimed is not currently due, the claimant must identify when or on what event each part of the claim will become due.
Virginia Code §43-4 has long been fairly clear that a mechanic’s lien can be filed before the funds are due, stating that the memorandum of mechanic’s lien shall “show. . . the time or times when the [claim] is or will be due and payable.” For example, a claimant may have no right to sue the contract debtor under the contact, because of a pay if paid clause, However, the claimant would still have the right to file a mechanic’s lien. Apparently, a claimant must now expressly state if any of the funds are not yet due. The policy grounds are not clear, but this will provide property owners more clarity as to whether their contractors are in breach of contract with Subcontractors.
What if a claimant provides inaccurate information on any amount claimed that is not currently due, or on what date event each part of the claim will become due? Does this make the entire mechanic’s lien invalid? The beginning of Virginia Code §43-5 states that the “memorandum. . . shall be sufficient if substantially inform and effect as follows:” We have always read this to mean that substantially following the form should mean that a claimant has succeeded in making a lien claim. Ulka Desai v. A. R. Design Grp., Inc., 293 Va. 426, 799 S.E.2d 506 (2017). However, this form should not create “requirements” that a claimant must necessarily follow.
Case law has long held that an inaccuracy in the amount claimed will not invalidate a lien. This is a matter that is often in dispute and must be determined by the court in a trial of the matter. Smith Mt. Bldg. Supply, LLC v. Windstar Props., LLC, 277 Va. 387, 391, 672 S.E.2d 845, 847 (2009) [The inclusion of a fine in a memorandum is akin to claiming a larger sum than the lien claimant’s proof would support rather than a violation of a statutory prerequisite to perfect a mechanic’s lien]. Accordingly, it is certainly the best practice to correctly state any amount claimed that is not currently due, or on what date event each part of the claim will become due. Claimants should always strive to place themselves in the “safe harbor.” However an inaccuracy should not make the entire mechanic’s lien invalid.
The “requirements” that a claimant must necessarily follow are found in the other portions of the Mechanic’s Lien Code. Virginia Code §43-4 is “strictly construed” and missing any of those requirements will invalidate a lien. There must be a substantial compliance with that portion of the statute which relates to the creation of the lien. American Standard Homes Corp. v. Reinecke, 245 Va. 113, 119, 425 S.E.2d 515, 518 (1993); Rosser v. Cole, 237 Va. 572, 576, 379 S.E.2d 323, 325 (1989).
After July 1, 2019, Virginia Code §43-4 will state “memorandum shall show the names and addresses of the owner of the property sought to be charged, and of the claimant of the lien, the amount and consideration of his claim, the time or times when the same is or will be due and payable, and the date from which interest is claimed . . . (revisions to Code italicized).” This seems to require that the Mechanic’s Lien identify the “address” of the owner of the property and the “date” from which interest is claimed. Here an inaccuracy would more likely make the entire mechanic’s lien invalid.
The legislative history and copies of the revised statute can be found here.
These changes to the Mechanic’s Lien Code will be effective on July 1, 2019. Pursuant to § 1-214 of the Code of Virginia, “All laws enacted at a regular session of the General Assembly, shall take effect on the first day of July following the adjournment of the regular session at which they were enacted, unless a subsequent date is specified.
© (2019) James D. Fullerton, Fullerton & Knowles, P.C. Clifton, VA (703) 818-2600