What is a Mechanic’s Lien and How Does It Work?
A mechanic’s lien is established and governed by Virginia statutes. They protect contractors and subcontractors who have not been paid for their services and provide specific steps for contractors and subcontractors to file a lien against the real estate they added value to. The amount of the lien must be the value of what the lienholder provided in the form of construction, renovations, etc. (note that an auto mechanic can also file a lien for work performed on a vehicle; however, that is a different Virginia statute!).
Filing a mechanic’s lien against real estate has strict rules and the statutory requirements must be carefully followed, especially the following:
1. Time within which a mechanic’s lien must be filed; if not timely filed the Contractor or Subcontractor has waived its mechanic’s lien rights
2. Naming all parties (including a lender, if applicable)
3. Narrowly describing the property to which the added value applies
Once a mechanic’s lien is filed, if the debt has not been paid before the expiration of the six-month period following the filing, the contractor or the subcontractor who filed the lien must file suit in the Circuit Court where the mechanic’s lien is filed and where the real estate is located. Sometimes a mechanic’s lien is “bonded off,” meaning that a bond has been provided by the debtor assuring payment if the debt is determined to be valid. If a mechanic’s lien is bonded off, the same six-month time period applies. Failure to file suit within six months is fatal to the mechanic’s lien and it will be released.
If the amount due has been paid, the contractor or subcontractor must file a release of the mechanic’s lien in the Court where it was filed.
If you are a resident of Winchester, VA, Frederick County, Northern Virginia, or anywhere in between and are looking for an attorney with experience in business law, estate planning, equine law, real estate law, or civil litigation, contact Joan Fine today.