On the first day of 2009, I wrote a post about the “150-day rule” in Virginia: Virginia’s Interesting 150 Day Rule. Therein I offered a pithy explanation of the rule:

From the last day of work, the claimant must count backwards 150 days. Generally speaking, a contractor is not allowed to include any labor or materials supplied outside this window in its mechanics lien.

I was reminded about this often overlooked rule by Brian Loffredo (@LoffredoLaw)of Offit Kruman in an article recently published: The 150 Day Rule: The Real Deadline For Filing Your Mechanic’s Lien In Virginia.  The title to this article is fantastic – “The real deadline…” – because it underscores the two key points about any discussion of the 150 Day Rule:  (1) It matters a lot when filing a mechanics lien in Virginia; and (2) It’s usually overlooked.

How To Calculate Your Mechanics Lien Amount With The 150 Day Rule

It’s very important to responsibility set your claim amount when filing a mechanics lien. There are a number of things you have to consider in any state, such as whether you can include attorney fees, lien costs, interest, finance charges, or other non-labor or material charges. Virginia’s 150 Day Rule is another factor when setting your claim amount for work or material furnished in that state.

A mechanics lien must be filed within 90 days of the last day of the month that your company last furnishes labor or materials to the project.  The 150 Day Rule, however, states that you can only make a claim for the labor or materials you furnished within 150 days from the last date of work or furnishing.

So, take a look at this chart:

Graph Explaining Virginia's 150 Day Rule
This graph explains the overall period of time that work is subject to a mechanics lien in Virginia. You cannot file your lien later than 90 days from last furnishing, but you also cannot lien for any work or furnishing contributed earlier than 150 days before your last furnishing.

And this one, too:

Graph Explaining Virginia's 150 Day Rule
This graph may explain Virginia’s 150 Day Rule a bit more clearly. The arrow in green indicates all the work that is subject to a mechanics lien – everything furnished within 150 days from the last date work or materials were provided. However, for all work or materials furnished later than that (displayed in red), there is no right to include in your mechanics lien.

There are only 2 exceptions to the 150 Day Rule:

  1. Retainage.  Retainage withheld for labor or materials furnished prior to the 150 day period may be included in the mechanics lien claim.  The retainage cannot, however, exceed 10% of the contract price.
  2. Pay When Paid or Payment Issues.  If the lien claimant has not been paid because money has not yet been received from up the contracting chain, such as is frequently the case when parties have pay-when-paid type contracts, these amounts can be included as well.

These two exceptions can be found in Virginia Code § 43-4.

Getting This Calculation Wrong Could Destroy Your Entire Mechanics Lien Claim

You don’t want to make the mistake of including materials or labor outside the 150 day window in your Virginia mechanics lien claim. Making this mistake will invalidate your entire lien.

This situation was addressed by the Virginia Supreme Court in 2009 in Smith Mt. Bldg. Supply LLC v. Windstar Props. LLC, 277 Va. 387.

In the Windstar Prop. case, the mechanics lien claimant had included materials and labor furnished before the 150 day window in its claim amount. The question was whether the entire lien should be invalidated, or if the claim amount should be amended and reduced to the allowed figure.

The mechanics lien claimant relied on VA Code § 43-15 which provides that “no inaccuracy in the [mechanics lien] filed…shall invalidate the lien, if the property can be reasonably identified by the description given and the [lien] conforms substantially to the requirements…and is not wilfully false.”

The Virginia Supreme Court, however, considers filing a mechanics lien for furnishing outside the 150-day period to be a “violation of a statutory prerequisite to perfect a mechanic’s lien” rather than an inaccuracy in stating the claim amount. The entire lien claim was accordingly discharged.

If you commit this error, your mechanics lien will likely be discharged, too.