Mechanics lien claims can be tricky, so any time there’s a form you can copy and paste from the statute – it’s a good idea to use that form. However, it’s not always required. For Virginia mechanics lien claimants, a recent case showed why it’s wise to rely directly on statutory forms, where possible. It also showed that Virginia lien claims won’t necessarily be tossed aside due to nitpicky issues.
Virginia mechanics lien claimants: flawed liens can still be effective
Virginia mechanics lien claimants have it (relatively) easy. Obviously, having to make a mechanics lien claim is never a good thing. But for Virginia claimants, at least there’s a form right there in the statute that the claimant can rely on. What’s more, a recent case shows that reliance on the form which was provided directly from the legislature gives the claimant a sort-of benefit of the doubt with their claim. Plus, the case shows that minor errors won’t (always) cause major issues in the Commonwealth.
Recent case shows the benefit of using statutory forms
If you’d like to read the case yourself, Findlaw has it here. For further analysis, try this article from Virginia Appellate News & Analysis, or this one from Construction Law Musings.
A recent case regarding Virginia mechanics liens, Desai v. A. R. Design Group, made it all the way to the Supreme Court of Virginia. The case showed that mechanics liens need not be perfect in order to be valid and enforceable. Considering how strict some courts can be regarding liens, the ruling came as a surprise to some.
Note: Virginia’s statutory forms were just tweaked in July, 2019
Virginia Mechanics Lien Forms Updated by Legislature | Legal Alert
Background
We won’t dive too deep into the background of this case. Essentially: the property owner for the project in question had passed away, and Desai, the trustee of the estate, hired A.R. Design Group to perform work. Ultimately, A.R. Design Group went unpaid and decided to file a mechanics lien.
When it came time to file a mechanics lien, A.R. Design Group’s Vice President downloaded a copy of the form provided at §43-5 of the Code of Virginia and filled it out himself. This is pretty common, and it’s worth remembering – mechanics lien filings don’t automatically create a lawsuit, and they rarely require an attorney. However, when their VP filled out the form, he didn’t necessarily do a great job at it. Due to some perceived issues with the filed lien, the owner challenged the filed lien.
Ultimately, there were really 3 alleged issues with the form. For one, the ownership information wasn’t technically correct on the form. It stated that Desai was the owner, but didn’t indicate that Desai was actually the trustee rather than the fee owner. Next, the VP accidentally filled in the lien form so as to indicate that he was claiming a lien – not A. R. Design Group. Finally, the “Date from which interest on the above amount is claimed” and the date when the lien amount became payable/was to become payable weren’t included on the lien claim, as required by § 43-4 and as seemingly required by §43-5, respectively.
What did the court say?
The court sided with the mechanics lien claimant without making too much of a fuss.
First, the court pretty nonchalantly shot down the notion that the “issue” with the ownership information should invalidate the lien. Regardless of whether Desai was the owner or was acting on behalf of the estate, Desai had control of the property and the lien filing showed that the property title wasn’t clear and would have alerted potential buyers of the property.
Next, the court set aside the notion that the lien should be invalidated because the VP was listed as the claimant, rather than A. R. Design. According to the court, this flaw on the face of the mechanics lien was insubstantial. The court held that Desai wasn’t prejudiced by the error, so the fact that the claimant was improperly named shouldn’t automatically invalidate the claim.
Regarding the dates…
The failure to include the date when the debt became payable/was to become payable got interesting. That date is required by §43-4 of the Virginia lien statute. However, the form that’s specifically allowed by statute (found at §43-5) actually didn’t include that date. As a result, the court found that the claimant shouldn’t be held accountable for using a form that the legislature specifically states is sufficient for a lien claim.
The non-inclusion of “Date from which interest on the above amount is claimed” was easier for the court. The court found that the date, though it appeared on the mechanics lien form created in §43-5, was optional. After all – if no interest was being claimed, then how could a claimant fill it out? Sure, the VP could have put a zero or “N/A” in the blank – but the court found that leaving that date blank was perfectly fine.
A step-by-step guide for Virginia lien filings:
How to File a Virginia Mechanics Lien
What’s the takeaway for Virginia mechanics lien claimants?
For me, the biggest takeaway was that the court gave the benefit of the doubt to the lien claimant since they’d used the statutory form created by §43-5 of Virginia lien statute. The date when the debt became payable/was to become payable is literally required by §43-4. But, because the form created in §43-5 didn’t have it, and because the statute states that the form at §43-5 is sufficient, the court found that the claimant’s form, ultimately, was sufficient. But, if the claimant had deviated from the statutory form, who knows what the court may have found.
The bigger takeaway, though, may be that minor errors in a Virginia mechanics lien claim won’t render the lien claim invalid and unenforceable. It’s fairly common for courts to strike down mechanics lien claims on a questionable basis. Perfectly valid payment claims can be thrown by the wayside due to simple errors. In Virginia, at least, it seems like courts are willing to be a little more lenient as long as a lien claimant gets the important parts right. That’s great news for Virginia mechanics lien claimants.
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