Construction Law Insights

Under the current law in Virginia, there is no time limit on when the Commonwealth of Virginia or any of its agencies (ex. VCU, UVA, Virginia Tech, etc.) can bring a lawsuit against contractors for alleged defects in public construction projects. The rule is that “no time runs against the king” and is codified in Virginia Code § 8.01-231 (“No statute of limitations which shall not in express terms apply to the Commonwealth shall be deemed to bar any proceeding by or on behalf of the same.”).

This issue was highlighted in November 2016 when the Supreme Court of Virginia decided the case of Hensel Phelps Construction Company v. Thompson Masonry Contractor, Inc., et al. In that case, Hensel Phelps completed a building for Virginia Tech in 1998. Twelve (12) years later, Virginia Tech asserted a claim against Hensel Phelps for allegedly defective construction. Because of Virginia Code § 8.01-231, there was no time limit for Virginia Tech (as an agency of the state) to assert a claim against Hensel Phelps. For construction contracts between private parties, Virginia’s five (5) year statute of limitations would have barred any claim. In short, if you contract with the Commonwealth of Virginia or one of its agencies, you currently are liable for an eternity.

To address this problem, two identical bills, HB 1667 (Kilgore) and SB 1369 (Norment) have been presented in the General Assembly. These bills bring the Commonwealth and its agencies into the same limitations period under which private parties operate in Virginia. In short, the bills would require Virginia and its agencies to assert a contractual claim within five (5) years after completion of the construction contract, a warranty claim within one (1) year after the expiration of the warranty, and would further limit the liability of the surety under a performance bond. On January 21, 2019, the Senate Courts of Justice Committee voted 13-0 in favor of the Senate Bill (SB1369) and was referred to the Courts of Justice on January 21, 2019.To address this problem, two identical bills, HB 1667 (Kilgore) and SB 1369 (Norment) have been presented in the General Assembly. These bills bring the Commonwealth and its agencies into the same limitations period under which private parties operate in Virginia. In short, the bills would require Virginia and its agencies to assert a contractual claim within five (5) years after completion of the construction contract, a warranty claim within one (1) year after the expiration of the warranty, and would further limit the liability of the surety under a performance bond. On January 21, 2019, the Senate Courts of Justice Committee voted 13-0 in favor of the Senate Bill (SB1369) and was referred to the Courts of Justice on January 21, 2019.

In an effort to get the bill passed, the Associated Builders and Contractors (“ABC”) and its lobbying team have met with numerous delegates and senators, as well as public entities from around the Commonwealth of Virginia, including Virginia’s Department of General Services, various schools of higher education, and associations that represent cities and counties in Virginia. Scott Kowalski, an experienced construction attorney with PLDR and a member of ABC’s Board of Directors, has been working with ABC’s lobbyist to meet with legislators and gain support for the bills. For questions about the status of the bills, please feel free to contact PLDR at (434) 846-2768.

PLDR Law Scott Kowalski 1 PLDR Law Andrew P Pearson 1 PLDR Law Mark Burgin 1

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