When contractors, subcontractors and suppliers do not receive payment on a construction project, they often turn to a special legal device – filing a lien against the property itself in Land Records. Commonly known as a “mechanic’s lien,” every jurisdiction has its own rules and procedures for asserting a lien. Here is a comparison of the lien rules in the District of Columbia, Maryland and Virginia:
|District of Columbia||Maryland||Virginia|
|Threshold for amount of work||No minimum||Improvement must reach 15% of building value||$150 or more|
|Notice requirement by general contractor||Within 90 days after the earlier of the completion or termination of the project||None||Within 90 days of last day of month in which work was performed|
|Notice requirement by subcontractor||Same as above||Within 120 days from date of work completion or materials delivered||Same as above|
|Right to record lien before judgment entered||Yes, file notice of intent to lien in DC Recorder of Deeds||No||Yes, file memorandum of lien in county Land Records|
|Documentation required for filing lien notice||Notice form, copy of contractor’s current license, certificate of good standing||N/A||Memorandum form sworn under oath|
|Service of lien notice on owner||Personal service or posting on premises||N/A||Certified or registered mail, return receipt|
|Time for petition to enforce lien||Within 180 days after notice of intent is recorded||Within 180 days from date work finished or materials delivered||Within later of: six months of filing memorandum of lien or 60 days of completion/termination of work|
As noted in the table, Maryland does not permit a lien to be recorded in Land Records prior to a hearing in circuit court. This is a significant difference with the other jurisdictions. Instead, the contractor must file a petition to establish a lien with supporting documentation and request a show cause hearing. After service of the court papers, the owner has 15 days to file a response with documentation. If the court determines there is “probable cause” for a lien, an interlocutory lien will be entered until a full trial on the merits. By statute, the trial must be scheduled within six months of the interlocutory order.
There are many nuances (read “pitfalls”) to pursuing a mechanic’s lien. Contractors, subcontractors and suppliers are best served by hiring an attorney to initiate the lien process. Michael Campbell has been representing contractors and subcontractors in the DMV for over 25 years.
Michael Campbell is a partner in the litigation group at Miller, Miller & Canby and regularly represents property owners, contractors and subcontractors in Maryland, Virginia and the District. Please feel free to contact Mr. Campbell at 301.762.5212 or send him an email for legal assistance.