VIRGINIA COURT REQUIRES “MERS” TO BE NAMED IN MECHANIC’S LIEN ENFORCEMENT SUIT

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VIRGINIA COURT REQUIRES “MERS” TO BE NAMED IN MECHANIC’S LIEN ENFORCEMENT SUIT

VIRGINIA COURT REQUIRES “MERS” TO BE NAMED IN MECHANIC’S LIEN ENFORCEMENT SUIT

Offit – Kurman –

The Fairfax County Circuit Court has recently decided that Mortgage Electronic Registration Systems, Inc. must be named as an interest party in certain mechanic’s lien enforcement suits. Failure to do so can result in the inability to enforce a mechanic’s lien.

The act of recording a mechanic’s lien in Virginia is commonly referred to as “perfection” of the lien. While perfecting a lien is powerful, and frequently forces a resolution to a payment problem, it is not technically the end of the line. If perfecting the lien does not force payment, the next step is to “enforce” the lien. Enforcement requires the filing of a lawsuit, with the goal of selling the property and collecting amounts owed from the proceeds of the sale.

Suits to enforce a mechanic’s liens are not typical debt collection suits. Since the goal is to sell the property, the suits must comply with additional requirements as set forth by the Virginia Mechanic’s Lien Law and the Virginia Courts. One such requirement is that all parties with an interest in the property be named as defendants in the suit. Doing this allows those parties to defend their interests in the property and the proceeds.

Over the years, Virginia Courts have made several determinations as to which parties must be named in a mechanic’s lien enforcement suit. Without question, a lender who is secured by a deed of trust on the property must be named as a party. Judgment holders who have liens against the property also must be named. The Virginia Supreme Court has made clear that trustees named in a deed of trust must also be named as defendants in a mechanic’s lien suit. See Bush Construction v. Patel, 243 Va. 84 (1992) and Robbins v. Camon Corp., 232 Va. 43 (1986). Interested parties typically can be ascertained by reviewing a title search on the property.

[OFFIT -KURMAN]

image: bmartinlaw.com

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