Just Because You Record a Mechanic’s Lien Doesn’t Mean You Get Notice of Foreclosure
Virginia General Assembly (Photo credit: Wikipedia)
As longtime (or new readers for that matter) know, mechanic’s liens are near and dear to my heart here at Construction Law Musings. These powerful tools to collect for your hard work on a construction project are great when prepared and recorded in the very specific fashion required by the Virginia legislature and courts. In most situations, if done properly, a mechanic’s lien gives you some security and priority for your construction claim that you would not have with a simple judgment lien.
Despite the power of a properly perfected and enforced mechanic’s lien (and the fact that the end result of a full mechanic’s lien suit that remains unsettled is in fact a foreclosure), a recent case in the Eastern District of Virginia, Weinberg v. J.P. Morgan Chase, et. al., (thanks for the head’s up on this case to the folks at the Construction Payment Blog) held that under Virginia statute mechanic’s lien holders are not entitled to notice of foreclosure. In the Weinberg case, the plaintiff, a pro se lien claimant that recorded two different liens, one pre-foreclosure and one post-foreclosure, and who had not received notice of the intervening foreclosure, argued, among other things, that he should have been given notice of the foreclosure on the deed of trust on the property by J. P. Morgan Chase.
The Virginia federal court dismissed the Plaintiff’s claims for various reasons, and in the process interpreted Va. Code Sec. 55-59.1 to find that mortgage holders need not give notice of foreclosure to mechanic’s lien holders because these lien holders are not listed among those entitled to notice. The Court also listed the other myriad reasons for dismissing the claims, including failure to timely record the lien, failure to timely sue to enforce the lien, failure to carry the appropriate contractors license, and the fact that much of the work performed didn’t qualify as work that gave rise to a mechanic’s lien. I recommend this opinion for more than just the take away from this blog post as it outlines several of the pitfalls that can occur if you don’t consult with an experienced construction attorney when preparing a mechanic’s lien in Virginia.
In short (if it’s not too late for that), even if, unlike Mr. Weinberg, you carry a properly perfected lien on a piece of property, stay vigilant for foreclosures because you may or may not get separate notice of the foreclosure.
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