General Contractors: When was the last time a private owner asked you to waive your lien rights before you did any work? If you do in the near future, you cannot require the same of your subcontractors and lower tiers.
The Virginia General Assembly has passed, and the Governor will soon likely sign, Senate Bill 891. Under the new and revised Code sections, subcontractors and lower tier subs and suppliers cannot waive their rights to liens or claims before providing labor and materials. This has been true in Maryland for nearly two decades.
This new Virginia law does not invalidate lien/claim waivers executed after a subcontractor or supplier provides labor and materials. Indeed, Virginia case law is supportive of lien/claim waivers executed after providing labor and materials. A court’s interpretation of the waiver will depend on the specific language used. So, the waiver language used should be precise and, under the new Code section, will only apply to labor and materials already furnished.
Take care when requiring that subcontractors and suppliers execute lien waivers before receiving payment, you may later be relying on the language in those waivers.
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Jonathan J. Straw
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