Virginia

Retainage

Public works. Virginia limits retainage on public construction contracts to 5 percent of each progress payment, and requires the same limit to be applied to subcontractors, with release after completion and acceptance.

Private works. Virginia does not set a general percentage cap on retainage for private construction; the percentage is set by contract.

Prompt payment

Private works. A Virginia law effective January 1, 2023, applies to most private construction contracts. An owner must pay a general contractor within 60 days of receiving an invoice for work completed in accordance with the contract. A general contractor must pay its subcontractors within the earlier of 60 days after receiving the subcontractor's invoice or 7 days after receiving payment from the owner for that work, and the same requirement flows down. Pay-if-paid provisions in those contracts are unenforceable. Payment may be withheld for defined reasons with written notice stating the reason and the amount, and unjustified late payments accrue interest at 1 percent per month.

Public works. Virginia's Prompt Payment Act requires state agencies to pay within 30 days after receipt of a proper invoice or receipt of the goods or services, whichever is later, and sets a 45-day period for local governments. Contractors on public work must pay subcontractors within 7 days of receiving payment for their work, with interest for late payment. Separate provisions govern construction contracts with public bodies.

Official sources

• Code of Virginia, section 2.2-4333 (public retainage)
• Code of Virginia, section 2.2-4347 (Prompt Payment Act, start of the article)
• Code of Virginia, section 11-4.6 (private construction payment)