Any contractor or subcontractor or any officer, director or employee of such contractor or subcontractor who shall, with intent to defraud, retain or use the funds, or any part thereof, paid by the owner or his agent, the contractor, or the lender to such contractor or by the owner or his agent, the contractor, or the lender to a subcontractor under any contract for the construction, removal, repair, or improvement of any building or structure permanently annexed to the freehold for any other purpose than to pay persons performing labor upon or furnishing material for such construction, repair, removal, or improvement is guilty of larceny in appropriating such funds for any other use while any amount for which the contractor or subcontractor may be liable or become liable under his contract for such labor or materials remains unpaid and may be prosecuted upon complaint of any person or persons who have not been fully paid any amount due them.
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's or subcontractor's right to withhold payment for failure to properly perform labor or furnish materials on the project. Any contract or subcontract provision that allows a contracting party to withhold funds due under one contract or subcontract for alleged claims or damages due on another contract or subcontract is void as against public policy.
1932, p. 483; Michie Code 1942, § 6429b; 1968, c. 568; 1980, c. 390; 1982, c. 391; 1992, c. 713; 1998, c. 754; 2020, c. 873.
Structure Code of Virginia
Title 43 - Mechanics' and Certain Other Liens
Chapter 1 - Mechanics' and Materialmen's Liens
§ 43-2. Structures, materials, etc., deemed permanently annexed to freehold
§ 43-3. Lien for work done and materials furnished; waiver of right to file or enforce lien
§ 43-4. Perfection of lien by general contractor; recordation and notice
§ 43-4.1. Liens to be recorded in deed books and indexed in general index of deeds
§ 43-5. Sufficiency of memorandum and affidavit required by § 43-4
§ 43-8. Sufficiency of memorandum, affidavit and notice required by § 43-7
§ 43-10. Sufficiency of memorandum, affidavit and notice required by § 43-9
§ 43-13.1. Use of lien waiver form; forgery or signing without authority
§ 43-13.2. When an affidavit or a signed statement of payment required of owner prior to sale
§ 43-15. Inaccuracies in memorandum or description not affecting lien
§ 43-16. What owner may do when contractor fails or refuses to complete building, etc.
§ 43-17. Limitation on suit to enforce lien
§ 43-17.1. Hearing on validity of lien
§ 43-18. Lien of general contractor to inure to benefit of subcontractor
§ 43-19. Validity and priority of lien not affected by assignments
§ 43-20. Extent of lien where owner has less than fee in land
§ 43-21. Priorities between mechanics' and other liens