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Virginia/Owner Represenative/General Contractor Release Concerns

VirginiaConstruction AccountingJoint ChecksLien Waivers

Hi I am the owner representative on a med-large size condo renovation. Prior to my entrance at the request of the owners, they had paid their very inexperienced GC approximately 70% of the contract and they had only completed approximately 29% of the work. Upon my arrival, I immediately began to require all of the paperwork that would be required during the normal course of any construction job. Including lien releases from the GC and all subcontractors. The GC had been working with us and had requested additional payments (still overpaid) for contract change orders that he had not previously billed for, but needed to be reimbursed. He is refusing to provide the lien releases from anyone and expects payment in full to go to him (no joint checks, but also will not provide progress releases from his subs) Is there anywhere in VA Construction law that prohibits the use of Conditional Progress Releases Upon Payment and Unconditional Progress Releases for work that is already completed? Thanks

2 replies

Jun 16, 2020
There's nothing in Virginia's mechanics lien statute that prohibits the use of conditional mechanics lien waivers before payment is made. And, certainly, Virginia doesn't prohibit unconditional lien waivers after payment is made. Note, though, that if the contract doesn't state that lien waivers must be collected by the GC, then it might be hard to force the GC to collect those waivers - and withholding payment on that basis might be unjustified. Still, reaching out to those subs directly to collect lien waivers may be an option - and they may be willing to provide a waiver if they know it will speed up payments moving forward. Finally, regarding joint checks - joint checks should really only be used when they've been agreed upon in the contract. If the contract doesn't require or allow the use of joint checks, forcing the GC to utilize joint checks might spur a payment dispute - and a GC wouldn't necessarily be out f line for refusing to use joint checks if that wasn't a part of their deal. As a final note, this resource may be helpful: How To Handle Requesting & Tracking Lien Waivers.
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Jun 17, 2020
I agree with the above. I always recommend lien waivers or releases in exchange for payment, but without a contractual requirement there is not much leverage to require them.
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