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Bill

SB 565

Virginia Contractor Transaction Recovery Fund; claim limits, license threshold amounts.

2026 Regular Session Introduced by Glen Sturtevant

SB 565 adjusts Virginia's contractor licensing thresholds and recovery fund claim limits to modify which contractors require licensure and how much defrauded homeowners can recover.

Fiscal Impact Statement from Department of Planning and Budget (SB565)
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Bill Summary · SB 565

Legislative bill overview

SB 565 modifies Virginia's Contractor Transaction Recovery Fund by adjusting claim limits and the license threshold amounts that trigger contractor licensing requirements. The bill updates financial thresholds that determine when home improvement contractors must be licensed and establishes new caps on claims homeowners can file against the recovery fund when contractors fail to complete work or commit fraud.

Why is this important

These threshold adjustments directly affect consumer protection in the construction industry. Changing claim limits and licensing thresholds determines which contractors must be regulated, which consumers have recourse if defrauded, and how much financial protection is available—impacting homeowners undertaking renovations and the contractors operating in Virginia's construction market.

Potential points of contention

  • Threshold increases may reduce contractor oversight: If licensing thresholds are raised, smaller contractors operating below the new threshold would escape regulation, potentially reducing consumer protections for lower-value projects
  • Claim limit adjustments affect consumer recovery: Whether claim limits are increased or decreased will determine homeowners' ability to recover losses; lower limits leave consumers underprotected while higher limits increase fund obligations
  • Fund solvency concerns: Expanding claim eligibility or increasing payout limits without corresponding fund contributions could deplete the recovery fund, leaving later claimants without recourse

Compiled from official sources — confirm details with the bill’s official record.

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