The General Assembly Adds Some Clarity to Contracts and Unlicensed Contractors

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For years, the statute regarding performing construction without a valid license (Va. Code 54.1-1115) was a bit murky. While that statute listed several prohibited acts, among them contracting without the proper class of license or use of the license of another, the consequences of such activity, in particular the effect that such action would have on the enforcement of a construction contract (Section C of the statute), were less than clear.

During the most recent General Assembly session, a few changes were made to sections B and C of the statute at the behest of the Virginia Bar Association Construction Section Council in hopes of clarifying the consequences for Virginia construction professionals that contract without a license and their customers. HB 732 changes (effective July 1, 2018) Subsection C of the statute to read:

C. No person shall be entitled to assert the lack of licensure or certification as required by this chapter as a defense to any action at law or suit in equity if the party who seeks to recover from such person A construction contract entered into by a person undertaking work without a valid Virginia contractor’s license shall not be enforceable by the unlicensed contractor undertaking the work unless the unlicensed contractor (i) gives substantial performance within the terms of the contract in good faith and without (ii) did not have actual knowledge that a license or certificate was required by this chapter to perform the work for which he seeks to recover payment. (changes in original House Bill)

As you can see, the language is more direct and should be more easily interpreted by courts and importantly, more easily understood by the construction community in Virginia. Even with this change, I recommend that you consult an experienced Virginia construction attorney to discuss your rights under the laws affecting construction in Virginia.

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