Calculate the mechanics lien amount available to a subcontractor who performed $45,000 of electrical work when the general contractor was paid $180,000 by the owner, but the total contract amount was $220,000.
Correct Answer
B) $36,818
Under Virginia mechanics lien law, the subcontractor's lien is limited to the lesser of work performed or the proportional amount paid by owner: ($180,000 ÷ $220,000) × $45,000 = $36,818.
Why This Is the Correct Answer
Under Virginia mechanics lien law, a subcontractor's lien is limited to the lesser of: (a) the amount owed for work performed, or (b) the subcontractor's proportional share of what the owner actually paid the GC. The calculation is: ($180,000 paid ÷ $220,000 total contract) × $45,000 subcontractor work = 0.8182 × $45,000 = $36,818. This prevents subcontractors from recovering more than the owner actually paid the GC.
Why the Other Options Are Wrong
Option A: $40,909
$40,909 is the result of the wrong formula. This figure might come from $45,000 × ($180,000/$220,000) calculated incorrectly, or from using $45,000/$220,000 × $180,000 with rounding errors. The correct computation yields $36,818.
Option C: $180,000
$180,000 is the total amount the owner paid the GC, not the subcontractor's lien entitlement. The subcontractor cannot claim the entire payment made to the GC — only their proportional share.
Option D: $45,000
$45,000 is the full value of the electrical work performed, but VA lien law caps the subcontractor's claim at the proportional amount of what the owner paid, which is less than the full $45,000 when the GC was not fully paid.
Memory Technique
VA Sub Lien Formula: (Amount Owner Paid GC ÷ Total GC Contract) × Sub's Work Value. Think of it as the sub getting their 'proportional slice' of what the owner actually paid — not the whole pie.
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