Authored by attorney Jay Rixey
On April 15, 2015, the General Assembly enacted legislation amending Virginia Code § 43-3, providing that a subcontractor, lower-tier subcontractor, or material supplier may not waive or diminish his lien rights, right to assert bond payment claims, or the right to assert claims for additional costs in advance of furnishing any labor, services, or materials. Any provision in a contract that prospectively waives or diminishes such rights executed in advance of providing any labor, services, or materials is null and void. The amended provisions are effective July 1, 2015.
Previously, Section C of Virginia Code § 43-3 provided that any right to a lien may be waived in whole or in part, by any party, without exception. The revised Section C now provides, in relevant part (amended language in italicized bold):
“Any right to file or enforce any mechanics’ lien granted hereunder may be waived in whole or in part at any time by any person entitled to such lien, except that a subcontractor, lower-tier subcontractor, or material supplier may not waive or diminish his lien rights in a contract in advance of furnishing any labor, services, or materials. A provision that waives or diminishes a subcontractor’s, lower-tier subcontractor’s, or material supplier’s lien rights in a contract executed prior to providing any labor, services, or materials is null and void.”
This revised statute now brings the Commonwealth of Virginia in line with the majority of states that find it against public policy to allow prospective waivers of certain rights, including lien rights. Ultimately, this revised statute protects subcontractors and suppliers by providing them with a stronger bargaining position during negotiations by knowing that any prospective lien waivers required in their contracts will be null and void after July 1, 2015.
It is important to point out that this statute does not cover general contractors. As a result, general contractors may still waive their lien rights by contract. Furthermore, the statute only prohibits the waiver of prospective lien rights by subcontractors and suppliers, and does not prohibit the waiver of lien rights by subcontractors and suppliers after the provision of labor, services, or materials.
You must read and accept these terms in order to send us email.
Use of this website for communication does not constitute or create an attorney-client relationship for any legal matter for which we do not already represent you. Please do not send any confidential or privileged information electronically via this website unless we have already agreed to represent you.
If you send us information electronically via this website, you agree that our review of that information, even if you submitted it in a good faith effort to retain us, and, further, even if it is highly confidential, does not preclude us from representing another client directly adverse to you, even in a matter where that information could and will be used against you.