- Mechanics' lien filings in Virginia used to provide contractors and suppliers with a five-month period--after completing work or delivering supplies--during which they could place a lien on the property owned by the consumer for whom the work was done, or who took delivery of the goods. This created a headache for title insurance companies that found it virtually impossible to keep up with the clouded titles and demands for insurance payments from irate consumers. Starting in 1992, the Virginia legislature amended its mechanic's lien law to introduce the services of a mechanic's lien agent.
- An applicant for a building permit may name an independent third party, the mechanic's lien agent, whose name and contact information is printed onto the permit. Usually such an applicant is a general contractor; by including a lien agent on the paperwork, any subcontractor who is hired to do any work on a Virginia property must register the work with the lien agent. A 30-day window limits the number of days a subcontractor can perform work on the property without notifying the mechanic's lien agent. If the subcontractor fails to notify the agent during this time, he may not file a lien for any unpaid work conducted during this period of time.
- If you would like to serve as a mechanic's lien agent, you must be a representative of a title insurance company, a lender's agent, or an attorney licensed to practice in Virginia. Moreover, you must be formally appointed as an agent and then formally accept this appointment.
- As a mechanic's lien agent, you fulfill a twofold duty: first, you act as the real property owner's representative and keep track of all entities doing work in the construction process. Secondly, you work for the lender or title insurer by ensuring that there are no unanticipated liens that may cloud the title of the property for which a loan may be granted. Subsequently, you protect title insurance companies from having to deal with a number of claims that arise from liens filed many months after completion of the actual work.
- The mechanic's lien agent concept is not perfect. Paperwork gets lost and, depending on the volume of subcontractors and lien filings, there is a chance that some liens will be placed on properties that were supposed to be under the supervision of a lien agent. Moreover, the lien agent process is voluntary and contractors may choose specifically--at the time that they apply for a building permit--to not have a mechanic's lien agent named on the permit.
