Bonds, Payment Bonds – Virginia’s “Little Miller Act”

Here at Musings, we have discussed the topic of mechanic’s liens extensively.  However, a mechanic’s lien may not be appropriate depending on the type of project that you work on.  For instance, in Virginia (as in most states), a contractor cannot place a mechanic’s lien on a public project.

In Virginia, the legislature has adopted the “Little Miller Act,” modeled after its federal counterpart.  The Virginia Act requires that a contractor post both a payment and procurement bond on any public project valued at over $100,000.00.  These bonds secure just what you would think that they would, i. e. payment of subcontractors and performance of the work. The payment bond is a substitute for the lien rights that a subcontractor would have on a private project.

Essentially, the Little Miller Act allows a subcontractor or material supplier the right to collect under the bond if it has not been paid within 90 days of the date that the last material or labor was provided to a project. Once the subcontractor or material man shows that the labor or material was in fact provided, the claim is collectible absent some proof by the bonding company or contractor that it has some sort of payment defense (setoff, delay, etc.).

In order to take advantage of this powerful tool, you need only file a claim within a year of the last date of work/material supply if you are in direct contract with the general contractor.  If you are not in direct contract with the general contractor (or other party against whose bond you are claiming), you must send a notice to that party within 90 days of the last date of work.

This brief overview should give the basics of Virginia’s Little Miller Act.  As always, consult with a knowledgeable attorney when making any sort of construction claim.

Update:  Since the publication of this post, the Virginia General Assembly has made some changes to the Little Miller Act, including a reduction of the notice period to 90 days.

If you find this helpful, please subscribe or comment below.  Also, feel free to contact me with any questions or other concerns you may have.