Virginia Construction Contracts Guide & FAQs

No, the ability to waive lien rights by contract (“no-lien clauses“) in Virginia is strictly prohibited under Va. Code §43-3(c)”

…a general contractor, 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 general contractor’s, 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.

No, there is no specific requirement to have a written contract for lien rights in Virginia. However, it’s never a good idea to work without having a written contract.

• Can a Contractor File a Lien Without a Written Contract?

There are two types of contingent payment clauses, a pay-if-paid and a pay-when-paid; both of which are enforceable in Virginia.

A pay-if-paid clause will be enforceable in Virginia if the provision clearly and unambiguously expresses the parties’ intent to create a condition precedent to payment. In Virginia, the court will consider evidence of the intent of the parties at the time the contract was executed; see: Pay When Paid Clauses: Virginia’s Unique Interpretation

Absent such clear and unambiguous intent, the clause will be deemed a pay-when-paid clause which only grants a “reasonable delay in making payment, and is not permitted to indefinitely withhold payment.” –Galloway Corp. v. S. B. Ballard Constr. Co.

Private projects

On private construction projects in Virginia, a no-damages-for-delay clause is generally enforceable. However, although not expressly recognized by VA courts, there are some generally accepted exceptions to the enforceability of these clauses, such as delays not contemplated by the parties, active interference, fraud or misrepresentation, or unreasonably long delays that constitute abandonment.

Public projects

No-damages-for-delay clauses on Virginia public works projects, however, are unenforceable under Va. Code §2.2-4335(A):

Any provision contained in any public construction contract that purports to waive, release, or extinguish the rights of a contractor to recover costs or damages for unreasonable delay in performing such contract, either on his behalf or on behalf of his subcontractor if and to the extent the delay is caused by acts or omissions of the public body, its agents or employees and due to causes within their control shall be void and unenforceable as against public policy.

Private projects

Virginia’s prompt payment laws do not regulate payments on private construction projects. The agreement between the parties will dictate when payment is to be made, and any interest penalties for late payment.

Public projects

On public works project in Virginia, payments to general contractors on state projects must be made within 30 days of receipt of invoice or services, and on local gov’t projects, within 45 days of receipt of invoice or services. On both types of projects, the timing may be modified by the contract between the parties.

All other payments to subs and suppliers must be made within 7 days of receipt of payment by the higher-tiered party. This timing cannot be modified by contract.

• See: Virginia Public Prompt Pay Act | Payment Help for VA Contractors

Private projects

Virginia does not regulate the withholding of retainage on private projects. Thus, the amount that can be withheld will be governed by the terms of the contract between the parties.

Public projects

On public works projects in Virginia, the amount of retainage that can be withheld is capped at no more than 5% of each progress payment. This amount cannot be increased under the contract or subcontract.

Generally, there is nothing specifically required to be included in a construction contract in Virginia. However, residential construction contracts must include the following information under 18 VAC 50-22-260(B)(9):

• When work is to begin and the estimated completion date;

• Total cost of the contract and amounts and schedule of progress payments; including any downpayment amount;

• List of specific materials and work to be performed

• A plain language “exculpatory clause concerning events beyond the control of the contractor and a statement explaining that delays caused by such events do not constitute abandonment and are not included in calculating timeframes for payment or performance;

• Statement of assurance that contractor will comply with all local requirements for building permits, inspections, and zoning;

• Disclosure of cancellation rights;

• (If contract is the result of door-to-door solicitation), a signed acknowledgment by the consumer that they were provided the Department of Professional & Occupational Regulation statement of protection;

• Contractor’s name, address, license number, class of license, and classifications or specialty services;

• Statement providing that any modification to the contract, which changes the cost, materials, work to be performed, or estimated completion date, must be in writing and signed by all parties; &

• Statement notifying consumers of the VA Contractor Transaction Recovery Fund, including contract and claim information.

The statute of limitations (deadline) to bring a breach of contract claim for nonpayment in Virginia differs, depending on whether the contract was oral or written:

• 5 years from the date of the breach of a written contract

• 3 years from the date of the breach of an oral contract

→ Va. Code §8.01-246