Builders and Contractors Exchange
Weekly Bulletin: 11 Apr 2005
Determining The "Last Day Of Work" For Mechanic's Liens And Payment Bond Claims
By: John Lockard
The deadline to file a mechanic's lien under Virginia law is 90 days from the last day of the last month that the contractor "last performs labor or furnished material" for the project (but no later than 90 days after the project is complete). On federal construction projects, a contractor has one year from when "the last of the labor was performed or material was supplied" to file a lawsuit against the Miller Act payment bond surety. The requirement is similar on Virginia public projects. (Other deadlines apply for second tier and lower subcontractors on public construction projects and for commercial bonds each bond's terms governs.)
The difficulty, however, is determining what work counts as the "last labor or materials furnished" for calculating the start of the deadlines.
The courts have answered this question on federal construction projects, where for the most part the courts have rule that only original work or materials, not warranty requirements, are included. Some grey areas remain, however, such as punchlist work.
Virginia's court have been less clear, but at least one Virginia Supreme Court case holds that replacement materials to replace previously delivered lost, damaged or stolen materials did not extend the mechanic's lien filing deadline. However, a recent Virginia Circuit Court opinion has held that warranty work could be included in calculating a payment bond deadline, leaving the door open for claims months and even years after completion of the original work.
In the absence of clear and binding court rulings, contractors should rely on the most conservative reading of the statutes and bond terms. Therefore, contractors should not rely on punchlist or warranty work for the purposes of calculating the deadline to file mechanic's liens or make payment bond claims, and instead should calculate their filing and claim deadlines from the date they last performed labor or supplied materials for which they originally submitted invoices on the project, not including invoices or payment applications for retainage. In other words, the earlier the better, and do not put yourself in a position of having rely upon a judge's interpretation to keep you claim alive.
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This article is meant to bring awareness to this topic and is not intended to be used as legal advice.