NewsMakers: West Virginia
June 6, 2014
In West Virginia, June 6 marks the effective date of change to the 1931 Code of West Virginia in which it becomes a full-price lien state, instead of an unpaid balance state, for commercial and certain residential projects. Residential owners will not be indebted to a contractor when the property is an existing single-family home, if the residence in question is a new owner's primary residence or if the property is an owner-occupied single-family dwelling. According to the statute, "This subdivision does not apply to a developer or builder of multiple residences except for the residence that is occupied as the primary residence of the developer or builder."
"States with unpaid balance lien laws require an extra level of diligence for suppliers and contractors," said Chris Ring, of NACM's Secured Transaction Services (STS). "These parties can't rely on a definitive date of last furnishing to file their lien because the lien is limited to funds remaining to be paid on a general contract. Because these parties are often not aware of when draw payments are cut, they are often forced to consider filing their lien well before a date of last furnishing. This is especially problematic for trades that are last on the job, such as flooring, casement and paint."