Jan 2011 , Vol. VI, No.1

ZzzZzZzZZzzZ…Why sleeping on your right to payment may cost you

Although the current population is plagued by overly-litigious, overly-eager individuals who sue at the drop of a hat, delay in and reluctance to taking action for non-payment often costs contractors and subcontractors through increased costs of asserting rights to payment, or forfeiture of those rights altogether.  For instance:
Notice Provisions:  Most, if not all, construction contracts contain notice provisions, requiring notice be given to a general contractor or owner prior to filing a claim.  Miss the deadline for filing such a notice and you may give up your right to bring a claim for payment.
Mechanic’s Lien Filing Deadlines:  Virginia’s mechanic’s lien statute imposes strict filing deadlines on the times to file a lien and file suit to enforce a lien.  Miss a statutory-deadline and say goodbye to your ability to file or enforce a mechanic’s lien.

General District Court Jurisdictional Limit:  Virginia has two types of trial courts:  general district courts and circuit courts.  The procedure in the general district courts is less complex and quicker, and it typically costs less to try a case in general district court than in circuit court, which is more formal, more engrained in procedure and more time-consuming.  The general district courts, however, can hear only those disputes totaling $15,000 or less.  Therefore, when an owner’s or a general contractor’s non-payment to you snowballs past the general district court’s $15,000 jurisdictional limit, a longer and more costly circuit court proceeding becomes your only trial option.

Deadlines and jurisdictional limits aside, out-of-court resolution typically is the most cost-effective way to handle a dispute.  However, while you strive to negotiate and resolve your problem without the assistance of a judge, be aware that inaction for too long can cost you.

Authored by attorneys, these articles are meant to bring awareness to these topics and are not intended to be used as legal advice.

For more information, contact Mike Sterling at 757-446-8626 or Bill Franczek at 757-446-8600. Visit www .vanblk.com, for our library of Construction Law Tips.  Suggestions for a topic? E-mail bfranczek@vanblk.com.