Last week I posted about a few bills that should be noted by the construction community here in Virginia. Now that the “crossover” (passed Senate bills headed to House and vice versa), here are a couple of other bills that the AGC of Virginia has highlighted that were not included in the post and updates last week. I will just highlight two here but for a more complete list, check out this crossover update from the AGC of Virginia.
SB208 Mechanics’ liens; right to withhold payment. Specifies that the use of funds paid to a general contractor or subcontractor and used by such contractor or subcontractor before paying all amounts due for labor performed or material furnished gives rise to a civil cause of action for a party who is owed such funds. The bill further specifies that such cause of action does not affect a contractor’s or subcontractor’s right to withhold payment for failure to properly perform labor or furnish materials and that any contractual provision that allows a party to withhold funds due on one contract for alleged claims or damages due on another contract is void as against public policy.
UPDATE: This bill has passed the Senate unchanged and been reported from Committee in the House without amendment as of February 28, 2020.
HB1300 Virginia Public Procurement Act; statute of limitations on performance bonds; statute of limitations on construction contracts and architectural and engineering contracts. Provides that an action against the surety on a performance bond shall be brought within five years after the completion of the contract. The bill further provides that the statute of limitations on construction contracts and architectural and engineering contracts is 15 years after completion of the contract.
UPDATE: This bill has passed both the House and Senate as of February 26, 2020.
Both of these bills have passed their respective chambers and are being considered in the other chamber of the General Assembly. The first deals with offset by general contractors and the other should be good news for all who deal in public construction because it at least would give some certainty and mitigate so called “Hensel Phelps” problem.
As always, I recommend that you read the entire bill yourself and consult a Virginia construction attorney with any questions about how this will affect your construction business.
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