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THE PERILS OF ONLINE MECHANIC’S LIEN SERVICES

Authored by Attorney John R. Lockard, jlockard@vanblacklaw.com; 757-446-8622

There are several online services that prepare and file mechanic’s liens in jurisdictions throughout the United States.  I recently had the opportunity to review a memorandum for mechanic’s lien that was prepared by one of these services and filed in a local Virginia court.  In reviewing the document, I discovered several problems with the memorandum of lien, including:

- It did not conform to the format included in the Code of Virginia;

- It failed to identify the general contractor or the subcontractor for the project as required by the Code of Virginia; and

- It failed to identify the correct address or parcel of property upon which the work was performed.

There is no question that the lien’s failure to identify the correct property would be fatal to the lien. For the other issues, it is not clear that each problem on its own, or even in conjunction with the other issues, would invalidate the lien. However, even if those issues would not ultimately cause the lien to fail, they would almost certainly lead to litigation over whether the lien was valid, instead of focusing on the contractor’s right to payment.  The contractor could spend significant legal fees litigating these types of issues with the lien, and could still end up not being paid.

Preparing a mechanic’s lien in most jurisdictions and Virginia, in particular, is much more complex than simply filling in blanks on a form.  The lien must include complete and correct information for the project.  For example, the property description must match the legal parcel where the work was performed.  Someone also needs to make sure that all amounts included in the lien are for work performed on that particular parcel of land. If any work at all was performed outside the limits of the parcel as shown in the property records, the entire mechanic’s lien could be invalid.

Virginia law does not require that a memorandum of mechanic’s lien be prepared or filed by an attorney; but the law is complex on lien filing and enforcement, and the types of issues above illustrate the risks of liens prepared by someone unfamiliar with the requirements of Virginia law or the details of the particular construction project.  In the case described above, the lien would likely not be enforceable—meaning that the contractor would be left without security for payment for its work.  Contractors and suppliers should strongly consider contacting an attorney experienced in Virginia construction law to discuss the requirements for filing a mechanic’s lien.  An experienced construction law attorney can assist in preparing and enforcing a mechanic’s lien and also with pursuing other options to collect the debt. 

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