Virginia Construction Law: Mechanic's Liens

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 with a breach of contract claim. It also can be invaluable when a higher-tier contractor becomes insolvent. To file a mechanic’s lien within Virginia construction law, a memorandum of mechanic’s lien must be filed in the county’s land records where the construction project is located. Generally, your lien cannot seek recovery of labor or materials (other than retainage) furnished more than 150 days before 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 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 to enforce the lien.

Owners of a project may be able to assert several 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 initial payment. A skilled Virginia construction lawyer can adequately draft and file a memorandum of mechanic’s lien, enforce the lien, or defend against such liens in Virginia construction law.

Virginia Construction Law: Payment Bond Claims

Due to policy considerations, contractors cannot file mechanics’ liens on public projects in Virginia construction law. 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 their work performance.

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 when the second-tier subcontractor last supplied labor or materials for which the claim is made. A knowledgeable Virginia construction attorney can adequately provide such notice and enforce a payment bond claim.

Virginia Construction Law: Contractor’s License

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 as 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 formal license requirements in Virginia, as well as pursue or defend claims related to lack of licensure.

Contract Requirements for Contractors

The Virginia Department of Professional and Occupational Regulation (DPOR) requires specific provisions in a residential contractor’s written contract within Virginia construction law. The failure to do so can result in fines, penalties, suspension, or revocation of your license.

§9 18VAC50-22-260.

Failure of those engaged in residential contracting as defined in this chapter to comply with the terms of a written contract that contains the following minimum requirements:

  • When work is to begin and the estimated completion date;
  • A statement of the total cost of the contract and the amounts and schedule for progress payments, including a specific statement on the part of the down payment;
  • A listing of specified materials and work to be performed, which the consumer specifically requests;
  • A “plain-language” exculpatory clause concerning events beyond the control of the contractor and a statement explaining that delays caused by such events do not constitute abandonment and are not included in calculating timeframes for payment or performance;
  • A statement of assurance that the contractor will comply with all local requirements for building permits, inspections, and zoning;
  • Disclosure of the cancellation rights of the parties;
  • For contracts resulting from a door-to-door solicitation, a signed acknowledgment by the consumer that he has been provided with and read the Department of Professional and Occupational Regulation statement of protection available to him through the Board for Contractors;
  • Contractor’s name, address, license number, class of license, and classifications or specialty services;
  • A statement providing that any modification to the contract, which changes the cost, materials, work to be performed, or estimated completion date, must be in writing and signed by all parties; and
    Effective with all new contracts entered into after July 1, 2015, a statement notifying consumers of the existence of Virginia.
  • Contractor Transaction Recovery Fund includes information on how to contact the board for claim information.