{"id":897866,"date":"2020-08-25T14:50:04","date_gmt":"2020-08-25T20:50:04","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=897866"},"modified":"2020-08-25T14:50:08","modified_gmt":"2020-08-25T20:50:08","slug":"project-payment-more-crucial","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/project-payment-more-crucial\/","title":{"rendered":"Accounting for Payments on Projects Became Even More Crucial This Year"},"content":{"rendered":"\n

Christopher G. Hill | Construction Law Musings<\/a><\/p>\n\n\n\n

I discussed\u00a0several of the statutory changes affecting the construction industry\u00a0here at Construction Law Musings in the run-up to July 1, 2020.\u00a0 One of those changes, an amendment to\u00a0Virginia Code Section 43-13, may add another arrow to the collection quiver of subcontractors and suppliers.\u00a0 As part of the previously-linked rundown, I highlighted one of the big additions in 2020, namely the amendment making those pesky clauses that let those up the payment chain from you hold money on \u201cthis or any other project\u201d void as against public policy.<\/p>\n\n\n\n

The other big addition to 43-13 is the change that adds a possible civil cause of action for downstream and unpaid subcontractors and suppliers in the event that funds paid to a general contractor or subcontractor are not first used to pay their downstream contractors and suppliers.  Prior to July 1, 2020, this statute provided criminal penalties for such behavior but did not contain the possibility of a civil penalty.  The operative language for the change is as follows:<\/p>\n\n\n\n

The use by any such contractor or subcontractor or any officer, director, or employee of such contractor or subcontractor of any moneys paid under the contract before paying all amounts due or to become due for labor performed or material furnished for such building or structure for any other purpose than paying such amounts due on the project shall be prima facie evidence of intent to defraud. Any breach or violation of this section may give rise to a civil cause of action for a party in contract with the general contractor or subcontractor, as appropriate; however, this right does not affect a contractor\u2019s or subcontractor\u2019s right to withhold payment for failure to properly perform labor or furnish materials on the project.<\/p><\/blockquote>\n\n\n\n

In short, now there is even more incentive for construction companies to keep track of their payments on a job-by-job basis.  Where in my experience very few Commonwealth\u2019s Attorneys in Virginia were enthusiastic about prosecuting violators under Va. Code 43-13, I believe that this potential civil penalty will be a bigger \u201cclub\u201d because subcontractors and suppliers will have another way to get paid.<\/p>\n","protected":false},"excerpt":{"rendered":"

Christopher G. Hill | Construction Law Musings I discussed\u00a0several of the statutory changes affecting the construction industry\u00a0here at Construction Law Musings in the run-up to July 1, 2020.\u00a0 One of those changes, an amendment to\u00a0Virginia Code Section 43-13, may add another arrow to the collection quiver of subcontractors and suppliers.\u00a0 As part of the previously-linked… Continue reading Accounting for Payments on Projects Became Even More Crucial This Year<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14],"tags":[9895,12,9158],"class_list":["post-897866","post","type-post","status-publish","format-standard","hentry","category-construction-2","tag-advise-consult","tag-construction","tag-payment-clause","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nAccounting for Payments on Projects Became Even More Crucial This Year - 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