The exact description used for a structure in a Mechanic’s Lien under the Virginia Code does not seem to cause much controversy. Typical descriptions include “single family residential dwelling” or “two-story masonry and steel office building.”

However, it does seem necessary to have a qualified “structure” for lien rights to exist.[1] Virginia Code Section 43-3(a) states that all persons supplying labor or materials for the construction of “any building or structure permanently annexed to the freehold shall have a lien ... upon such building or structure and so much land therewith as shall be necessary for the convenient use and enjoyment ...” of the building or structure. In other words, the lien is on the “structure.” If there is no structure, there may not be any lien.[2]

Not all improvements to real estate will be a “structure” to which lien rights will attach. Years ago, contractors more often had trouble showing they supplied labor or materials to any type of structure. For example, an excavator may expend considerable time and energy digging a hole, but is that a “structure?” What about landscapers and equipment suppliers?

Many of these problems were solved by a special Virginia Code Section 43-2, which reads as follows:

Structures, materials, etc., deemed permanently annexed to freehold....a well, excavation, sidewalk, driveway, pavement, parking lot, retaining wall, curb and/or gutter, breakwater (either salt or fresh water), water system, drainage structure, filtering system (including septic or waste disposal systems) or swimming pool shall be deemed a structure permanently annexed to the freehold, and all shrubbery, earth, sod, sand, gravel, brick, stone, tile, pipe or other materials, together with the reasonable rental or use value of equipment and any surveying, grading, clearing or earth moving required for the improvement of the grounds upon which such building or structure is situated shall be deemed to be materials furnished for the improvement of such building or structure and permanently annexed to the freehold. (emphasis added)

This section states that a well, excavation, sidewalk, driveway, retaining wall, water or drainage system and the like “shall be deemed a structure.” If any of these items are supplied to a property, therefore, it will create rights to a mechanic’s lien, whether or not another building is ever completed.

Section 43-2 goes on to say that all shrubbery, earth, sod, sand, gravel, brick, stone, pipe, equipment supplied, surveying services and similar items “required for the improvement of the grounds upon which such building or structure is situated shall be deemed to be materials furnished for the improvement of such building or structure ...”[3]

There is very little case law on this code section, but the subtle difference in wording in italics above would indicate that a well, excavation, sidewalk, etc., is a “structure” and results in lien rights, whether any other building is constructed or not.[4] Shrubbery, earth, sod, sand, etc., however, would not result in lien rights unless there is eventually a “structure” completed in connection with these items.

This code section does make it clear that equipment use provides lien rights for their “reasonable rental or use value.”[5] This section also establishes that surveyors have lien rights. However, there is still uncertainty about other engineers and architects.[6] Lien rights are even more uncertain if plans are never used to construct a “structure.”[7]

Lumber yards, HVAC equipment manufacturers, electrical supply houses and similar material suppliers that do not actually deliver materials to the project still have mechanic’s lien rights so long as the materials can be “traced.” The supplier must be able to establish with reasonable certainty the amount of materials supplied to each project.[8] If the supplier cannot show where materials were used, the supplier may not have mechanic’s lien rights. If the supplier cannot show the materials were used in a qualified “structure,” the supplier may also not have mechanic’s lien rights.[9]

The Virginia Supreme Court has ruled that lien rights still exist if materials are removed from a structure once installed. The court stated that removal of the materials was “irrelevant” and that the “legislature could not have intended that the supplier’s mechanic’s lien may be avoided by simply removing from the building the materials furnished and incorporated in it.” This case may still require that the materials be delivered, accepted and installed, adding value to the structure.[10]

Readers are welcome to reprint or republish this article with the following attribution:

Use the Free Construction Law Survival Manual at www.FullertonLaw.com

James D. Fullerton
Fullerton & Knowles, P.C.

12642 Chapel Rd.
Clifton, VA 20124
(703) 818-2600, Ext. # 205
JFullerton@FullertonLaw.com

[1] Dallan Constr., Inc. v. Super Structures Gen. Contrs., Inc., 79 Va. Cir. 11, 1-2 (Va. Cir. Ct. 2009) [Lien invalid when nothing provided by or derived from the lien claimants efforts was employed in the construction of the building on the real property against which the mechanic’s lien is asserted]; Summit Cmty. Bank v. Blue Ridge Shadows Hotel & Conf. Ctr., 428 B.R. 231 (W.D. Va. 2010) [supply of sleeper sofas, lounge chairs, desk lamps, pillows, game tables, desks, benches, chairs, artwork, mirrors and design and purchasing services for these items were not for the improvement of the building within the meaning of §43-3].

[2] Weaver v. Harland Corp., 176 Va. 224, 230, 10 S.E.2d 547, 549 (1940) [It is not the contract for erecting the building which creates the lien, but it is the use of the materials furnished which gives the materialman his lien under the statute].

[3] Va. Code Anno. §43-2 (Michie 1950).

[4] Rosser v. Cole, 237 Va. 572, 379 S.E.2d 323 (1989).

[5] But see Able Equip. Co. v. Walter A. Ellis Constr. Corp., 27 Va. Cir. 498 (Va. Cir. Ct. 1989).

[6] See section above, Claimant; subsection, Architects and Engineers.

[7] Dallan Constr., Inc. v. Super Structures Gen. Contrs., Inc., 79 Va. Cir. 11, 13 (Va. Cir. Ct. 2009) [There are no mechanic’s lien rights where an architect (or any other laborer) performed work to enhance a building, but cannot show that their work enhanced the building].

[8] Addington-Beaman Lumber Co. v. Lincoln Sav. & Loan, 241 Va. 436, 403 S.E.2d 688 (1991).

[9] See subsection below, Structure.

[10] Moore & Moore General Contractors, Inc. v. Basepoint, Inc., 253 Va. 304, 485 S.E.2d 131 (1997); See also Summit Cmty. Bank v. Blue Ridge Shadows Hotel & Conf. Ctr., 428 B.R. 231 (W.D. Va. 2010).