VB CGC Practice Group

VB CGC Practice Group
Vandeventer Black's Construction and Government Contracts Practice Group focuses on serving our business clients in the construction industry. We currently have offices in Norfolk and Richmond, VA, the OBX and Raleigh, NC, and Hamburg, Germany. For more information about Vandeventer Black, clink on the VB logo.

Monday, December 20, 2010

Owner responsibility for constructability, or not?

Historically, construction is Virginia is design-bid-build; that is the owner hires a designer to design the project, put the design out for bid, and the awardee contractor builds pursuant to the design. But what if the design is insufficient? Who's responsible for resulting damages? Generally, that responsibility lies with the owner, who according to Virginia Supreme Court precedent from 1924 impliedly warrants the accuracy of plans and specifications furnished to a contractor for construction; that is the owner warrants that if the contractor builds per specs the project should be constructable and sound.

That case was Southgate v. Sanford, etc., Co., 147 Va. 554, 137 S.E. 485 (1927). In it, the owner provided contract documents for the construction of a bulkhead. The bulkhead failed. The contractor blamed latent deficiency with the plans, while the owner claimed negligent construction by the contractor. The Virginia Supreme Court followed federal "Spearin Doctrine" precedent and concluded that so long as the contractor had no reason to know the plans were deficient before it started work that the owner bore responsibility for the latent defect in the plans.

In rendering that decision, the court further held that even though the contract had a common "disclaimer" obligation for the contractor to familiarize itself with the project or the plans, and that unless the contractor had actual notice of the deficiency then it would not be responsible if there turned out to be a problem with the plans or resulting construction. However, the court left open the possibility that a clear disclaimer could in fact shift the risk of responsibility, just holding in that case that the contract language did not clearly transfer that risk.

Lesson learned: Contractors are not held to a higher standard of guarantying results from plans furnished by owners; however, it is contractually responsible to shift that liability with clear and unambiguous contract terms. This result is one reason why design-build has become more popular, as that approach allows the owner to transfer virtually all construction risk to the builder. Again we have the theme here that, absent statutory prohibition, most risks are contractually allocable, so carefully consider what you might want to include, or alternatively what you are willing to accept, in your contracts; depending upon your position and risk tolerance.

Monday, December 13, 2010

150-day look back for mechanic's liens: What's the big deal?

This revisits Virgina mechanic's liens. One of the quirks of the Virginia code prohibits inclusion in a mechanic's lien of amounts for labor or materials furnished more than 150 days prior to the last day labor was performed or materials were furnished preceding the filing of the lien. But what if you do include prohibited amounts?

Most practitioners expected the answer as the court would simply deduct the unallowable amounts; however, the Virginia Supreme Court held in Smith Mountain Bldg. Supply v. Windstar Props., 277 Va. 387, 672 S.E.2d 845 (2009) that including prohibited amounts invalidates the entire lien; a much more draconian result. Therefore, establishing dates the dates of work is critical to lien enforceability.

Virginia Code § 43-4 provides, in pertinent part, that “no memorandum filed . . . shall include sums due for labor or materials furnished more than 150 days prior to the last day on which labor was performed or material furnished to the job preceding the filing of such memorandum.” However, Virginia Code § 43-15 provides as follows:

No inaccuracy in the memorandum filed, or in the description of the property to be covered by the lien, shall invalidate the lien, if the property can be reasonably identified by the description given and the memorandum conforms substantially to the requirements of §§ 43-5, 43-8 and 43-10, respectively, and is not wilfully false.

One would think the latter statute could be used to "save" a lien that might include proscriptive amounts. But the court in Smith Mountain in contrast held that the inclusion of sums for labor or materials outside of the 150-day period was not an inaccuracy, and therefore invalidated the lien in its entirety and denied any mechanic's lien relief to the contractor. One interesting aspect of that decision was how the court distinguished an earlier case where it applied the saving provision of Virginia Code § 43-15 to not invalidate the lien of a contractor that had included monies for a fine levied by the state beyond the 150-day deadline.

In doing so, the court noted that the fine was not labor or materials. Therefore, even though the earlier decision was written then in terms of discussion of the 150-day rule, the court noted in distinguishing it later in Smith Mountain that since the fine was not labor or materials it fell with the definition of an inaccuracy, whereas - it concluded - including non-allowable sums for labor or materials was a prohibition and not an inaccuracy.

While such thin distinctions are regularly made by courts, one of the key problems with that decision lies in the impracticality of determining every date of labor or materials, and their values, and the unfairness to contractors who look to mechanic's liens as their best, and often only, means of getting paid. Lesson learned: days count, and the dates of when labor or materials were furnished and their value in relation to the filing of a mechanic's lien are critical and must be analyzed before filing a lien.

Friday, December 10, 2010

PR: Careful what you tell you PR company; it may come back to haunt you

With the ever-increasing media world, public relations assistance to help manage public perceptions respecting companies, projects, or specific project events, like a casualty, are increasingly helpful and common. However, for your PR company to help effectively spin those perceptions, they need information. Companies seek to cloak such disclosures with the attorney-client or work product privileges, but there are conflicting views in the courts about that.

For example, the Southern District of New York has looked at similar privilege claims in two separate cases. In one, the PR company was hired for general PR assistance, but helped on the specific matter. In the other, the PR company was specifically retained for crisis management with respect to the underlying litigation. In the former case, the court held that disclosure of information to the PR company was a waiver of any privilege, but in the latter the court held that there was no waiver, relying in part upon the close working relationship with counsel.

As a result, there's no clear cut answer. The closer the relationship is to one of assisting counsel than simply managing public perception, the more likely the communications are to be privileged, but it is important to recognize that because there is no hard and fast rule any communications to PR companies might be subject to later discovery. That is not to say PR companies should be avoided for that reason; to the contrary they are an increasingly important part of many casualty or crisis management situations; just recognize that, even if retained by counsel, the information exchanged with them is not sacrosanct.

Wednesday, December 8, 2010

Think those materials are warranted? Maybe not.

Manufactured products typically come with installation instructions. If the installer follows them, one would presume the warranty would stand. But one Virginia Supreme Court case, Bridgestone/Firestone v. Prince William Square, 250 Va. 402, 463 S.E.2d 661 (1995), calls that presumption into question.

In that case, the installer installed per manufacturer's instructions. Although the installer used fasteners not furnished by the manufacturer, the manufacturer inspected and accepted the roof, and the fastener use was per the instructions. But after several years of responding to warranty claims for leaks, the manufacturer claimed its warranty was void because the installer used the fasteners that the manufacturer did not furnish.

The lower court rejected that claim, but the Virginia Supreme Court agreed with the manufacturer because it concluded the written warranty terms were clear that the manufacturer only agreed to repair leaks caused by workmanship or materials it supplied and it had not supplied the fasterners that had been determined as the cause of the leaks. The court refused to consider the installation was consistent with the installation instructions and by an authorized applicator of the manufacturer, and instead applied the warranty strictly as written.

Bottom line, warranties need to be carefully reviewed to verify the exact terms and conditions of the warranty, and that language you think might be insignificant could very well be the deciding factor in whether the warranty exists or has been voided.

Monday, December 6, 2010

Virginia Public Bodies Cannot Avoid Delay Damages With Limited Markup Provisions

Increasingly over the years, public bodies have sought to use express markup provisions as the limited extent of their liability for delay damages; however, the Virginia Supreme Court has rejected that approach as contrary to Virginia's statutory prohibition of delay damage waivers for public projects in Virginia Code Sec. 2.2-4335. That code section voids any provision purporting to require a contractor to waive, release or extinguish rights to recover costs or damages for unreasonable delay in performing a public construction project if the delay was caused by the public body. Liquidated damages agreements are excepted from this provision, and in Martin Bros. Contractors, Inc. v. VMI, 277 Va. 586, 675 S.E.2d 183 (2009), the school argued the contract provision limited delay recover to the agreed percentage markup was such a permissible liquidation. The Virginia Supreme Court disagreed, noting that the markup was for administration, but not delay impacts of themselves, and that the markup provision sought to operate as an absolute bar to the recovery of the contractor's delay expenses, and therefore was void and unenforceable. This can be good news for contractors whose delay costs exceed such an agreed markup; however, they must be able to prove the delay, and its cost, rather than relying upon any agreed formula. Even despite this case holding, I have heard of several agencies trying to enforce a similar limiting percentage markup. If, however, your delay costs exceed the agreed percentage, you'll want to point out, respectfully of course, the error of their position. Of note, the Martin Bros. case only applies to public projects subject to the Virginia Public Procurement Act, and in particular it would not apply to void such a percentage liquidating agreement in a commercial project; leaving for such commercial contracting parties the need to consider either requiring or accepting such a liquidating percentage provision. As discussed in other posts about contract terms, it's all about risk allocation versus dollars.

Friday, December 3, 2010

New Crane & Derricks Standard

For those unaware, there's a new OSHA standard for cranes & derricks in construction. That standard, CFR 29 Part 1926 Subpart CC was published July 9, 2010 and became effective last month on November 8, 2010. It's a 200 page standard so I'm not going to try and summarize it all; however, there are several notable changes, which include personnel titles and minimum qualifications, with options to meet those qualifications. Charlie Bird did an excellent job discussing the new standard in a recent edition of the Commonwealth Contractor, Issue 15 of November 2010. Below is a link to his article and if you're work involved cranes & derricks it's an important read:

http://www.abcva.org/Service/Information/Commonwealth_Contractor.aspx

Wednesday, December 1, 2010

Surety Project Completion: No one size fits all

What happens if a party who's bonded doesn't or can't complete their work? There's no single answer to this, but if you're the party that issued the contract (the "obligee") you should pat yourself on the back for getting the performance bond in the first place. If not for the performance bond, you'd be out of luck and have to complete yourself, and then try and recover any overage against the non-performing party. But if there's a surety bond, the surety will at least come into the picture, although that doesn't mean the surety will necessarily complete the work for you.

The surety's rights and obligations will be dictated by the wording of the performance bond, which like any other contract will be enforced as written. There are some form performance bonds, like the AIA performance bond, but many other individualized forms are used. Remember, the surety's obligation is limited by the "penal sum" or amount of the bond, less the value of accepted work to date reducing the contract value. That means one option of the surety is to do nothing and just pay any remaining balance that can then be used to offset the obligee's cost to complete.

More commonly, the surety will either "tender" a completion contractor who will then be put under direct contract to the obligee under the bond or will hire its own "takeover" contractor to complete the work through the surety. Both have pros and cons, although most sureties will often prefer the tender approach, which often is of benefit to the obligee to as it involves one less party in completion.

As in most completion circumstances, there's no single approach and the best approach will vary depending upon any number of facts. Again, the good news is there is a performance bond though, which as least provides those various approaches for consideration.  I'll talk more specifically about these various approaches in later posts.

Monday, November 29, 2010

Indemnity and Defense Obligations: Not Necessarily Absolute

Now that everyone's had their fill of Thanksgiving food and good cheer, it's time to get back to the old grindstone. One way to burn off those holiday calories is to exercise the old mind; hey, in my book, every calorie burned counts, not matter how you burn it!

The Virginia Supreme Court recently dabbled into the indemnity and hold harmless field in the case of Uniwest Construction, Inc. v. Amtech Elevator Services, Inc., 280 Va. 428, 699 S.E.2d 223 (2010), in which it considered whether a subcontractor had an absolute obligation to indemnify and hold a general contractor harmless. While the court held the subcontractor did have to indemnify and hold the contractor harmless, it held that obligation was not absolute, and only found the obligation after voiding another more specific obligation in the parties' subcontract.

The subcontract had a very specific indemnity / hold harmless provision that required the subcontractor to indemnify the contractor even if the contractor was negligent. The court held that verbiage was too broad and conflicted with Virginia Code Sec. 11-4.1, which statutorily voids any provision contained in any contract relating to construction, alteration, repair or maintenance of a building, structure or appurtenance (including connected moving, demolition and excavation) if it contains language purporting to require one party to indemnify or hold harmless another party against liability for damage arising out of bodily injury or property damage caused by or resulting solely from the other party's negligence.

So even though the facts didn't give rise to a situation in that instance where the contractor was trying to hold the subcontractor liable for the contractor's sole negligence, the court held the clause was nevertheless void in its entirety because it was contrary to the statue, and so there was no duty to defend or hold harmless under that provision. But the contractor wasn't totally out of luck because it had been smart enough to include other flow-down language in the subcontract in the form of a general flow-down provision elsewhere in the subcontract, and the court held that flow-down provision established a more broad pass-through requirement to indemnify and hold harmless that nevertheless applied.

Major lessons learned: 1) overbroad indemnity / hold harmless clauses are void, regardless of whether the facts involve the sole negligence of the party seeking to enforce the provision, so avoid them; and 2) courts will construe contracts as the parties make them, so be careful what you include or accept in your contracts; and 3) the Virginia Code does have some provisions voiding otherwise agreed terms, but those public policy restrictions are not extensive and will not void other valid terms in the contract; and 4) those general flow down provisions can play important roles in the parties' obligations owed to each other, so don't ignore them or figure they're just standard language without significant meaning.

Wednesday, November 24, 2010

Holiday Cheer: WKRP Old School Sitcom Humor

The holiday season is always one of the best of the year. Getting ready for turkey day reminded me (showing a bit of my age here) of an old episode of WKRP in Cincinnati, in which the radio station tried a turkey giveaway promotion, but the station owner didn't realize turkey's (at least big domestic ones intended for turkey dinner) didn't fly. Here's a weblink to the episode if you need a good chuckle:

http://www.kewego.com/video/iLyROoafYtDe.html

Tuesday, November 23, 2010

Ordinary Building Materials versus Equipment or Machinery: The Difference is Time

Following up an earlier post, the Virginia Supreme Court In Jamerson v. Coleman-Adams Construction, Inc., 280 Va. 490, 699 S.E.2d (2010) recently discussed the distinction between ordinary building materials, which are subject to Virgina's 5-year statute of repose, and equipment or machinery, which are exempt. At issue was a specially fabricated steel platform that failed after construction and injured a firefighter while he was standing on it before sliding down the fire pole. The fireman filed suit more than 5 years after the contract was completed, because of which the trial court dismissed the case as beyond the 5-year repose period (Va. Code Sec. 8.01-250).

Below are the firefighter's arguments, and the Virginia Supreme Court's response:

- The pole and platform were equipment because there were warranted.  No because the court distinguished independent manufacturer warranties and a basic policy to stand behind one's product.

- The pole and platform were equipment because their erection was subject to close quality control. No because associated inspections were just reviews of the work and not quality control processes.

- The pole and platform were equipment because fabricator provided plans and installation instructions with them. No because the drawings were shop drawings prepared based on adaptation of the underlying contract requirements and the installation instructions were suggested guidelines.

- The pole and platform were not equipment because they were specially fabricated. No because uniqueness does not preclude characterization as ordinary building materials.

Confused? Obviously the distinction is very grey. One justice's ordinary building material can very easily be another justice's equipment or machinery. But it is important to keep abreast of such questions as it can have significant long term liability implications.

Monday, November 22, 2010

No License? - No Pay (Maybe)

Most states, including Virginia, have licensing requirements for contractors. Virginia's requirements apply regardless of trade and regardless of whether the contractor is a prime contractor or one of the prime's lower tier subcontractors.

Unlike some other states, Virginia has a 3-level "class" system for contractors, based - in general - on contract value: $10,000 or less = Class C; $10,000 or more up to $120,000 = Class B; and more than $120,000 = Class A (similar to an "unlimited" license in some other jurisdictions). Not only are there civil penalties for being unlicensed, but it is also a crime. There are certain exceptions, but rarely would they apply to a commercial project.

Besides being a crime, from a practical standpoint, non-licensure can also affect entitlement to payment. Non-licensure was previously judicially held as a total bar to payment in Virginia (and still is in North Carolina), but a key statute was revised to allow non-licensure as a defense to payment (but not the rest of the code requirements) if, even if not licensed, the contractor: 1) substantially performed with the contract terms; 2) in good faith; and 3) without actual knowledge of the licensure requirements.

It is always important to determine whether your contractor is licensed. There are sound practical reason for licensure, and while a license alone does not insure good workmanship, it is at least an indicator that the contractor has had requisite training and is not "fly by night."

Conversely, if you are a contractor, it is important be be licensed. Not only is there the practical issue of entitlement to payment for your work, but non-licensure also establishes the basis for civil penalty, and criminal prosecution.

More information about Virginia's licensure requirements is available at the Virginia Board for Contractor website: http://www.dpor.virginia.gov/dporweb/con_main.cfm

License holders can be looked up on line at the Virginia Department of Professional and Occupational Regulation:
http://www.dpor.virginia.gov/regulantlookup/selection_input.cfm?CFID=3377027&CFTOKEN=95458217

Friday, November 19, 2010

Delays: Time can, but doesn't alway, equal money

Time is almost always "of the essence" for construction projects. But that doesn't necessarily mean that every delay results in monetary loss. Absent "liquidated" damage agreements (i.e., each day of day = $x.xx), damages resulting from delays have be proven. The most undisputed aspect is extended field or general conditions (i.e., the costs of running the project for each delay day). The most disputed aspect is unallocated or underabsorbed home office overhead, typically calculated using the so-called "Eichleay" formula. But either way, the party claiming money damages because of delay must substantiate that they were delayed, that the delay was along the critical path of the work, that there were not other concurrent delays, and that the party claiming delay did not cause the delay or fail to mitigate its affects or its damages. Typically this will require some sort of Critical Path Method analysis. CPM analysis is the "standard" in federal procurement case law and is increasingly becoming so in other tribunals too; however, some courts, like Virginia's Supreme Court, recognize that delay damages are recoverable by any proven methodology involving admissible testimony, and so that may or may not involve true CPM analysis. As with most claim issues, the key is documentation, so if you are claiming delay you can substantiate your claim or if conversely you are rejecting a delay claim you can refute it.

Thursday, November 18, 2010

Payment Bond: It's not insurance

Many subcontractors presume that if there is a payment bond on a project they have insurance of payment from the surety, but that's not true. A payment bond is not insurance. It only comes into play if the claim is covered by the payment bond and the claimant makes proper claim under the payment bond, or applicable statute. Typically that includes a written notice requirement and then filing suit to enforce the bond claim within a specified period. There is no set periods or form for either for commercial construction projects, but for Virginia public projects (if bonds are required) the notice must be given within 180 days of last work or delivery and suit must be filed within one year of last work or delivery. The time period varies in NC for those that cross the border. A common norm is 90 days for notice and 1 year for suit, but again that will vary by specific bond or statute. If claim is made, that does not, of itself, require the surety to pay the claim. The surety typically will investigate the claim first, and then decide if it believes payment is due; but even then it is not obligated to make payment unless the claimant provides notice when required and brings suit. Some states have "bad faith" statutes allowing pursuit of a surety that "drags its heels" in either investigation or payment, but Virginia is not one of them, so the surety does not always have incentive to move quickly if at all. That all said, payment bonds remain a comfortable assurance of likely payment at some point, and projects with bonds are unquestionably better from a lower tier standpoint as a means of ensuring payment; but again perhaps not as prompt of payment as desired.

Wednesday, November 17, 2010

Pay if Paid II - Mechanic's lien affect

Some states prohibit mechanic's lien waivers. But not Virginia. By statute, mechanic's lien rights can be waived in Virginia. Construction attorneys have generally (I think I correctly speak for most) presumed that meant a clear and express waiver of lien rights. However, a recent Circuit Court opinion agreed with the theory of bank counsel trying to void various mechanic's liens on a project by arguing that: 1) because subcontractor subcontracts had enforceable pay if paid provisions; and 2) because the owner went bankrupt and was not going to ever be able to pay the prime contractor; that, therefore, the pay if paid clause had the effect of a mechanic's lien waiver, and voided filed mechanic's liens. I respectfully disagree with the court's analysis, and think this a totally wrong result; but this is another example of risk allocation that must be considered by any subcontractor before accepting a pay if paid provision in its subcontract, and another reason for prime contractors to consider adding such provision in their subcontracts, or of owners mandating such provisions to be flowed down in their prime contracts. Whether that decision is appealed remains to be seen, but it is clearly another warning shot over the bow of subcontractor rights.

Tuesday, November 16, 2010

Controversial Contract Provisions - No Damages to Delay

Another controversial contract provision is a no damages for delay clause. Essentially, it provides that the sole remedy in a delay situation is a time extension, but no money for the delay impacts. Depending upon how the clause is written, it could go further to all time related impacts, including acceleration or disruption too. Again, the question is risk allocation. The Virginia Public Procurement Act voids no damages for delay provisions for covered public projects, but the statute does not apply generally to all construction projects, nor is there a general voiding statute like in some other states. So for commercial projects, the money impacts of delay are something the courts will leave to the contracting parties. That risk allocation can make or break projects and parties, as the costs of delays can be tremendous. So like with every contract clause, much thought should be given to whether this type of clause is appropriate to your needs and your risk tolerance. 

Monday, November 15, 2010

Controversial Contract Provisions - Pay if paid

Following up an earlier theme about contracts, it occured to me that there are various controversial contract provisions regularly used that warranted discussion. I will not say they are good or bad because, like opinions about art, such opinions are in the eye of the beholder; or in this case the party with control over what terms go into a contract. As I've noted before, contracting is about allocating risk. One common way the risk of non-payment is allocated is a "pay if paid" clause. While variously worded, the key concept from the verbiage is that one party acknowledges pre-payment to the other as a condition precedent to payment to that other party. The most common example is in a subcontract, wherein the general contractor includes a provision that payment to a subcontractor is not due unless and until the general contractor is paid by the owner. Some states, like North Carolina, have legislatively voided such provisions as being against state public policy; however, Virginia has not, and the Virginia Supreme Court, who has considered that question, has expressly upheld such provisions as being valid and enforceable if clearly and unambiguously written. There are certainly justifiable reasons for arguing both sides of enforceability and voidability. For example, general contractors will argue they are not banks and so if they have not been paid upstream they should not have to pay downstream, whereas conversely subcontractors will argue they are not banks and in the business of doing work for free and as between they and the general contractor the general contractor has better means of controlling payment. The most common way this comes to a head is, as is more frequently occuring of late, an owner becomes insolvent or bankrupt and has no ability to pay for work in place. Pay if paid clauses push that risk down to the lower level; a result welcome to the general contractor but untenable to its subcontractors.  Again, fair or unfair depends upon your point of view, but prudence regardless dictates that if you are involved in the contract process you consider the pay if paid application; one way or the other.

Friday, November 12, 2010

Industry Forms: Is consensus really an advantage?

Many projects utilize industry forms such as the AIA or ConsensusDocs family of documents. The AIA family has, particularly, been an accepted "standard" in the industry for many years, and the Consensus have developed more recently as another series of alternative documents. The clear advantages of these documents are their consensus; however, that conversely is their detriment. Contracting is all about risk allocation. Consensus tends to equate that risk, but not always equally; rather, the more prominent player in the consensus effort tends to maintain greatest advantage (much like in politics). For example, in the AIA (American Institute of Architects) series, the most protected party is - don't be suprised here - the architects. Each job and each contract have their own indivudal characteristics, important issues, needs, lack of needs, etc.; therefore, to rely upon any form as one-size-fits all should be looked at very, very carefully, and strong consideration given to individualized contracts to fit one's specific needs and interests. There's an old proverb I think equally applicable to industry forms that goes something like this: A camel is a horse designed by committee. But, of course, camels too serve their purposes, so the question is do you need a camel for your purposes or do you really need a horse? The answer governs whether such industry forms are suitable for your particular need.

Thursday, November 11, 2010

Service Contract Act Webinar - Nov. 30, Noon - 1 pm EST

Our law firm is presenting a free webinar on November 30, 2010, from noon to 1pm ET, regarding Wages, Hours, and Benefits under the Service Contract Act.  For more information on this webinar opportunity, please go to our firm website at http://www.vanblk.com/, where you can also register for the webinar, or you can register at https:www1.gotomeeting.com/register/3787726072.

Is that One Year Warranty Really Just One Year?

Commercial and public construction projects typically have a one year warranty provision . . . often steaming from the "standard" established by consensus contract documents such as the AIA or ConsensusDocs families of documents. But does that really mean a contractor or supplier is only on the hook for deficient work or defective materials or equipment for only one year? Typically no. Leaving aside for another time discussion of the fact that warranties can, for the most part, be effectively disclaimed, if there is an express warranty for one year, there is still a continuing time period during which suit can be brought for the warranty breach that took place during that one year of warranty. For verbal contracts that enforcement period is three years and for written contracts it is five years. There are also some different rules for residential construction and condominium construction, but generally that means the one year is not a hard and fast date as many think. There are many implications to this, including respecting document retention to preserve either claims or defenses. Also, again, much of this can be changed by contractual agreement, including limiting the enforcement period as well as the warranties or warranty periods themselves. As a humurous aside to this, a friend forwarded the attached video, which may or may not be staged. If real, I hope the guy didn't have the gumption to sue the elevator installer or manufacturer, but in this day and age he probably did:

video

Wednesday, November 10, 2010

Complexity of Mechanic's Lien

Weren't mechanic's liens supposed to be a simple, certain way for contractors or supplier to get paid for the work or materials they provided or furnished for a construction project? Yes, but for over a century the Virginia Supreme Court has not seen it that way, nor has the Virginia General Assembly taken opportunity to do so legislatively. Instead, mechanic's liens have become technical traps for the unwary who don't exactly follow the code provisions or case law. Common filing errors include: misnaming the owner (it's not always the contracting party or the name they go by); not properly describing the property (it's not always the address you think, if there even is an address) or not segregating / assigning your work or materials to specific legal parcels (generally only to be found by a title search); and including amounts beyond the statutory prerequisites (both from the last date work and preceding it - the latter being Virginia's "look back" rule). It should be simple and court's should be able to correct non-intentional errors without voiding a lien entirely, but they are not simple and court's typically cannot correct even non-intentional errors; at least not as the law currently stands. But generally, other than for a bonded project, mechanic's liens are still one of the best means of trying to secure payment for a commercial project. Lesson learned: look into filing a lien early and make sure you follow all necessary filing requirements and constricts.