Virginia General Assembly Tweaks Pay-if-Paid Ban

Legislation word on paper in typewriter

During this most recent legislative session, and among some other construction-related bills, the General Assembly sought to clarify its past enactment.

April 3, 2023
Christopher G. Hill - Construction Law Musings

Last year, the Virginia General Assembly passed into law a ban on the so-called pay-if-paid clauses, effective January 1, 2023. I shared my thoughts and concerns with the legislation as drafted at the time of its passage. During this most recent legislative session, and among some other construction-related bills, the General Assembly sought to clarify its past enactment.

The enrolled bill fills in certain gaps in the law as follows:

  • For both private and public contracts, the General Contractor, if it has good reason to withhold any payment, now has a maximum of 50 days from receipt of a proper invoice to notify its subcontractor of the reason for the withholding, including the contractual noncompliance, the amount to be withheld, and the lower-tier subcontractor responsible for the contractual noncompliance.
  • For private contracts, the Owner now has 45 days in which to provide any written notice of intention to withhold payment. This notice must include the specific contractual non-compliance and the dollar amount to be withheld. NB- Owners do not need to specify the subcontractor responsible for the non-compliance.

Mr. Hill may be contacted at chrisghill@constructionlawva.com



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