With VA Mechanic’s Liens Sometimes “Substantial Compliance” is Enough (but don’t count on it) [UPDATE]

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A recent opinion may provide a “safe harbor” from the form over function nature of a mechanic’s lien.

October 14, 2019
Christopher G. Hill - Construction Law Musings

Virginia mechanic’s liens are a powerful and tricky beast that in most cases require absolute precision in their preparation. However, an interesting opinion recently came out of the Virginia Supreme Court that may provide a bit of a “safe harbor” from the total form over function nature of a mechanic’s lien.

In Desai, Executrix v. A.R. Design Group Inc., the Court considered a lien memorandum that had what could be described as technical flaws in the preparation of the mechanic’s lien by A. R. Design Group. The basic facts are that A. R. Design Group used the form of lien found in Va. Code Sec. 43-5 (also found as Form CC-1512 at the Virginia Judiciary website) when it recorded two lien memoranda for two pieces of property owned by a trust. Relating to one of the two properties, the memorandum failed to identify the “Owner” as the trustee of the trust. On the memoranda relating to both properties the affidavit verifying the amounts claimed did not identify the signatory as agent for A. R. Design Group, instead listing the agent as the claimant and further failed to state a date from which interest is claimed or a date on which the debt was due.

Needless to say, the owner argued that each of these technical defects invalidated the memoranda and therefore they should have been released. Somewhat surprisingly the Fairfax, Virginia Circuit Court disagreed and held the liens to be valid. On appeal, the Virginia Supreme Court affirmed the lower court. The held that the failure to add the word “Trustee” after Ulka Desai’s name did not invalidate the lien because the trustee had all of the rights of ownership and furthermore that naming Desai in the memorandum served the purpose of putting third parties on notice of the lien.

Mr. Hill may be contacted at chrisghill@constructionlawva.com



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