It’s been an interesting week on the web as it relates to mechanic’s liens, as I’ve run across a number of web posts about the types of services that can be included in a lien.
Let’s look at the matter theoretically. Construction lien laws are normally drafted to protect contractors, who invest labor and expense into the improvement of a property. However, since the laws also balance the property rights of persons or organizations, each state certainly does something to qualify what types of labor and expense can be represented in a lien, and which cannot.
The question here, therefore, is quite simple: have you performed work or provided materials that can be the subject of a lien?
It’s one of the most important questions a contractor or supplier can ask when determining how to best collect on a non-paying account or project. If you work does not qualify for a lien, for example, there is no need to even consider if notice is required and other lien filing requirements.
It’s important to consult the laws or your particular state to determine what type of materials and labor can be the subject of a lien, and which cannot. However, two recently decided cases in Virginia and Kentucky are revealing of some general principals that are followed by most states. The principal is essentially this: you can only lien for labor and materials that actually go into improving the property.
What does this exclude?
In Virginia, Virginia Lawyers Weekly reports that a Hanover County Circuit Court invalidated a mechanic’s lien filed by a contractor that incurred costs in anticipation of construction of a steel building, but did not provide labor or materials actually employed in construction of the building.
The case is captioned Dallan Construction Co. v. Super Structures General Contractors, Inc, and can be downloaded here.
Similarly, in Kentucky, the Kentucky Court of Appeals held that “mowing, trimming, edging and street cleaning” did not “permanently improve the property,” and therefore, a mechanics lien was not allowed to be filed for the services provided. That case is discussed at the South Carolina Community Association Law Blog, and is captioned Steeplechase Subdivision Homeowners Association, Inc. v. Thomas, Ky. Ct. App. 2008.