New statute has power to nullify lien waivers in Virginia
Effective July 1, 2015, any provision of a construction contract or lien waiver that “waives or diminishes” the payment bond or mechanic’s lien rights of a subcontractor, lower-tier subcontractor or material supplier before services are rendered is “null and void” in Virginia. The new language in Va. Code § 11-4.1:1 and Va. Code § 43-3 represents a sharp turn from previous Virginia law on payment bonds and mechanic’s liens, which expressly allowed such waivers “at any time.”
So what is the takeaway for suppliers, contractors, owners and sureties on construction projects in Virginia? Read your contracts closely in light of the new law. You may have more leverage than you think, or you may be giving away leverage by failing to update your documents.