Authored by attorney James Harvey
The General Assembly was unusually busy this year in passing legislation that impacts construction and government contracts in Virginia. This is part 1 of 3 on these new laws every contractor should know:
Mechanic’s Liens and Bond Waivers
Senate Bill 891 changes Virginia law and now prohibits any attempt to have a subcontractor or supplier waive or diminish its payment bond claim rights or right to assert contractual claims for demonstrated additional costs prior to providing any labor, services, or materials. This makes agreements at the outset of the work that waive a subcontractor’s right to file mechanic’s liens or bond claims unenforceable. Importantly, this same protection is NOT afforded to general contractors. General contractors need to take precautions in their contracts with owners not to waive such rights when they cannot pass that waiver onto their subcontractors and suppliers. This also raises questions as to the enforceability of other common contractual limitations on subcontractor lien and claim rights such as “no damage for delay” clauses.
While the intent of the legislation was undoubtedly to level the playing field for subcontractors and suppliers, this new law will raise many new questions. Consult with Vandeventer Black LLP before signing your next contract!
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