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Does a supplier to a supplier have lien rights in Virginia and DC?

I just found out that our client that we supplied materials to (Tile company) hires subcontractors to do the installs. This means that our client does not need a contractors license. So I believe this makes us a supplier to a supplier. Correct? if that is the case can we file liens in VA and DC if we are a supplier to a supplier?

1 reply

Jul 21, 2020

If you were hired to supply materials by another party who is merely supplying materials to the job, then that'd generally look like a supplier-to-supplier relationship. Granted, it's relatively common for a contractor to sub out all of their labor and materials, so it's possible the customer might be considered something else.

Do suppliers to suppliers have mechanics lien rights in Virginia?

It seems like the answer is yes - suppliers to suppliers should be entitled to mechanics lien rights in Virginia, provided that the supplier who hired you was hired by the owner or the GC. § 43-7 of Virginia's lien statute states that subcontractors hired by the "general contractor" will be entitled to lien. § 43-9 of Virginia's lien statute states that those providing labor or materials to a "subcontractor" is entitled to mechanics lien rights. § 43-1 of Virgnia's mechanics lien statute defines the term "general contractor" to include "contractors, laborers, mechanics, and persons furnishing materials, who contract directly with the owner..." (emphasis added). That same section defines a "subcontractor" as "all such contractors, laborers, mechanics, and persons furnishing materials, who do not contract with the owner but with the general contractor." (emphasis added). So, a material supplier hired by the owner would be considered a GC, a supplier hired by a GC would be considered a subcontractor, and both parties are entitled to lien rights. Plus, a supplier hired by a "subcontractor" is entitled to lien rights, too.

Do suppliers to suppliers have mechanics lien rights in Washington DC?

If your customer was hired directly by the property owner, Washington DC lien rights should be available. Under § 40-303.01 of the Washington DC lien statute, a supplier who furnishes work to a contractor hired by the owner is entitled to lien. Even if your customer subs out labor to another party, they should still generally be deemed a "contractor" for the purposes of DC lien rights. If your customer was hired by someone other than the owner, then lien rights won't be on the table. That's why, typically, suppliers to suppliers won't be able to pursue lien claims in Washington DC.

Mechanics liens and licensing issues

First, note that mechanics lien statutes' terminology and the given state's licensing requirements might not always match up. So, it's possible a party could be deemed a "contractor" under mechanics lien laws without actually triggering a state's contractor licensing requirements.

Virginia licensing and mechanics liens

If your customer is required to be licensed, but if they don't hold a license, then you would quite likely be unable to file a valid and enforceable mechanics lien in Virginia. Though, if the work they're doing generally does not require a license, then licensing shouldn't be an issue.

Washington DC licensing and mechanics liens

Washington DC's lien statute doesn't impose the same customer licensing rules. Nothing in the DC lien statute seems to indicate that if the customer is unlicensed, their sub cannot pursue a lien claim there.

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