Virginia Enacts Law to Protect Subcontractors, Lower-Tier Subcontractors and Material Suppliers

Virginia Senate Bill 891 amends  Section 43-3 of the Code of Virginia and add Section 11-4.1:1 to protect subcontractors (defined in Section 43-1 as “contractors, laborers, mechanics, and persons furnishing materials, who do not contract with the owner but with the general contractor”), lower-tier subcontractors and material suppliers.  Subdivision (c) of Section 43-3 now provides, in relevant part, that “a 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.”  In addition, new Section 11-4.1:1 prohibits a subcontractor, lower-tier subcontractor or material supplier waiving or diminishing its right to assert payment bond claims or claims for demonstrated additional costs in a contract in advance of furnishing any labor, services, or materials. A provision in a contract that purports to waive these rights is null and void.  Senate Bill 891 was effective July 1, 2015.