{"id":898314,"date":"2020-12-10T11:56:54","date_gmt":"2020-12-10T18:56:54","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=898314"},"modified":"2020-12-10T11:56:55","modified_gmt":"2020-12-10T18:56:55","slug":"privity-of-contract-mechanics-lien","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/privity-of-contract-mechanics-lien\/","title":{"rendered":"Is Privity of Contract with the Owner a Requirement of a Valid Mechanic\u2019s Lien? Not for GC\u2019s"},"content":{"rendered":"\n

Christopher G. Hill | Construction Law Musings<\/a><\/p>\n\n\n\n

As any reader of this construction law blog knows,\u00a0mechanic\u2019s liens<\/a>\u00a0make up much of the discussion here at\u00a0Construction Law Musings.\u00a0 A recent case out of Fairfax County, Virginia examined the question of whether contractual privity<\/a> between the general contractor and owner of the property at issue is necessary.\u00a0 As a reminder, in most situations, for a contract claim to be made, the claimant has to have a direct contract (privity) with the entity it sues.\u00a0 Further, for a subcontractor to have a valid mechanic\u2019s lien it would have to have privity with the general contractor or with the Owner.<\/p>\n\n\n\n

The Fairfax case,\u00a0The Barber of Seville, Inc. v. Bironco, Inc.<\/em>, examined the question of whether contractual privity is necessary between the general contractor and the Owner.\u00a0 In\u00a0Bironco<\/em>, the claimant, Bironco, performed certain improvements for a barbershop pursuant to a contract executed by the two owners of the Plaintiff.\u00a0 We wouldn\u2019t have the case here at Musings if Bironco had been paid in full.\u00a0 Bironco then recorded a lien against the leasehold interest of The Barber of Seville, Inc., the entity holding the lease.\u00a0 The Plaintiff filed an action seeking to have the lien declared invalid because Brionco had privity of contract with the individuals that executed the contract, but not directly with the corporate entity.<\/p>\n\n\n\n

After reviewing the requirements for a valid mechanic\u2019s lien in Virginia, including\u00a0Va. Code 43-3\u00a0and the legal requirements for privity relating to subcontractors stated above, the Court rejected the argument by the Plaintiff.\u00a0 The Court first found that Bironco was not a subcontractor, but was in fact a general contractor under the lien statutes because it had a direct contract with the owners.\u00a0 After doing so and pointing out that Va. Code 43-3 does not have any privity requirement, the Court went on to specifically reject the privity argument with the following observation:<\/p>\n\n\n\n

This argument lacks merit because Virginia Code \u00a7 43-3 does not articulate a privity requirement. If such were the case, corporate entities could evade paying for services by having their agents enter written work contracts on their behalf.<\/p><\/blockquote>\n\n\n\n

In short, where a general contractor performs work that improves an owners\u2019 property, the Court would not allow an owner to avoid the possibility of a mechanic\u2019s lien simply because it had its agents execute the underlying contract with the contractor.<\/p>\n\n\n\n

The result in this case makes sense because mechanic\u2019s liens in Virginia,\u00a0while statutory and very picky, are there to assure payment to contractors that improve an owner\u2019s property and to avoid situations in which the owner gets the benefit of that work without payment.\u00a0 If privity were required in a situation that the Virginia General Assembly failed to require it, these dual goals could be thwarted by a savvy owner.<\/p>\n\n\n\n

As always, I recommend that you read the case and draw your own conclusions and that you consult with an\u00a0experienced Virginia construction attorney\u00a0prior to recording a mechanic\u2019s lien in Virginia.<\/p>\n","protected":false},"excerpt":{"rendered":"

Christopher G. Hill | Construction Law Musings As any reader of this construction law blog knows,\u00a0mechanic\u2019s liens\u00a0make up much of the discussion here at\u00a0Construction Law Musings.\u00a0 A recent case out of Fairfax County, Virginia examined the question of whether contractual privity between the general contractor and owner of the property at issue is necessary.\u00a0 As… Continue reading Is Privity of Contract with the Owner a Requirement of a Valid Mechanic\u2019s Lien? Not for GC\u2019s<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9,10772],"tags":[9895,11379,184],"class_list":["post-898314","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","category-mechanics-lien-law","tag-advise-consult","tag-contractual-privity","tag-mechanics-lien-law","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nIs Privity of Contract with the Owner a Requirement of a Valid Mechanic\u2019s Lien? 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