This February, we focused a lot of attention on state bond claims, authoring a series of blog posts that discussed state bond claim issues that ranged from basic to technical. Through the years of consulting with companies about lien rights, I’ve learned that a lot of folks are confused about bond claims. This is especially the case in our current economy, when many are working on state jobs for the first time because of the slowdown in the private market.
The posts in our “State Bond Claim Series” addresses a spectrum of issues related to payment bond claims, from the most basic of queries to some rather technical legal nuances. These posts give the reader a big picture overview of how state bond claims or claims against payment bonds work, and also issue some warnings for problems that can arise when working in one of these claims.
Here is a summary of the posts from this series:
When Is A Project Considered A State Project?
The State Bond Claim Series starts off with an essential question: when are you on a state project (versus a private or federal project)? If you aren’t sure about being on a state or county project, you’ll be clueless about which type of lien remedy is available. This post breaks down the differences between federal, private and state works.
How Lien and Bond Claims Against State Projects Work
Now that you know what constitutes a state or county public work, you may not fully understand how to make your claim for payment, and what happens after you make this claim. This post fills in the gap, offering the reader a big picture overview of the payment bond claim process.
What Is A Payment Bond?
It is sometimes useful to get down to the basics when discussing a topic. Insofar as state bond claims are concerned, it’s really important for the supplier or subcontractor to have a grasp on what exactly a payment bond is. This post defines the payment bond and explains how payment bonds work.
Tip: Send Your Bond Claim To The Surety To Ensure Maximum Attention
Moving away from the big picture or definitional type posts, this post addresses a simple way to make your bond claims move faster and be more effective: by sending it to the surety. In many states, you’re not required to do this, but that doesn’t mean you can’t…and shouldn’t. To the contrary, you should so send your bond claim, and this post explains why.
Are Bond Claims Actually Filed With The Recorder or County Clerk?
A myth about state bond claims is that they are a “lien,” and even further, that they are “filed” or “recorded” just as a mechanics lien is recorded against a private work. In most states, as this post exposes, this is not the case. The term “filed” is still used in many state statutes, but it has an entirely different meaning. Understanding this is crucial to making a successful bond claim, and understanding the payment bond claim process.
Knowing A Project’s Final Settlement Date Is Key For State Bond Claim Deadlines
How do you know when to file a state bond claim? In many states the answer is simple, as the bond claim is due a certain number of days after last furnishing to the project. But a substantial number of states calculate the deadline differently, from the end of the entire construction project. How do you know when this is? This post explores the options available to you.
What If State Law Conflicts With Provisions Of A Construction Bond?
Filing a claim against a bond on a state construction project is governed by statute in every state, but each of the underlying bonds have associated contractual terms. What if the terms of the payment bond conflict with the statutory requirements? This happens, and happens frequently, and each state handles the discrepancies differently.
Good Practice: Get A Copy of The Payment Bond On State Projects
Too often, subcontractors and suppliers who aren’t paid on a construction project are ready to make a bond claim, but have no idea which surety holds the payment bond. While it may not be needed information, it is certainly great information to have, and can increase the speed and success of your claim. Everyone furnishing materials or labor to a state project is entitled to a copy of the payment bond, and this post explains why and how to get it.
Why Bond Claims Can Be Better Than Mechanic Lien Claims
Many think they can file a lien claim against a state project, and become disappointed to learn they can only file a bond claim. However, this is no reason to be disappointed. In many ways, the bond claim is a better remedy than the lien claim, and this post discusses why.
Why You Can’t File A Mechanics Lien On A State Project
Now that we’ve talked all about the payment bond claim, distinguished it from a mechanics lien claim, and explained that mechanics lien claims are not allowed on state projects, it’s time to reveal why lien claims aren’t an option on state public works. And this post discusses the reason behind this principle.
Preliminary Notice Required on State Construction Projects, Too
While there are a lot of differences between state public works and private works, preliminary notice is not usually one of them. Each state has different notice obligations, and obligations may be different in a single state for state and private projects, but state projects are not excused from preliminary notice as a matter of rule (unlike on federal projects, where there isn’t a notice requirement). This post explores.
Are Bond Claim Regulations The Same In Every State?
Since payment bond claims on state projects are considered a sort-of “government” claim, and since all payment bond claims are the same on federal projects, many presume that the rules related to state bond claims are identical state-to-state. In many cases, states have adopted the Miller Act and formed a “Little Miller Act,” which means the rules can be quite similar. But, each state is different, and sometimes drastically so.
A Guide To Virginia Payment Bond Claims
Chris Hill from the Construction Law Musings Blog visits our blog to contribute this great guest post. Rather than focus simply on payment bond claims in general, Chris discusses how payment bond claims work in the State of Virginia. This not only gives Virginia readers a great how-to guide on filing bond claims against state works, but it also demonstrates how each state can have preferences and differences in administrating these claims.
Who Do I Send My Bond Claim To, and How?
This post gets down to the brass tax. Who receives the bond claim, and how do you get it to them? Unlike some of the other posts that address the concept of payment bonds, this discusses some practicalities.
A Guide To Louisiana Payment Bond Claims
A guest post from Wolfe Law Group’s Seth Smiley addresses payment bond claims in Louisiana, where allegiance to the Napoleonic Code makes the claims process a bit different from the rest of the country.
A Guide to California Payment Bond Claims and Stop Notices
California’s claim process on state and public construction projects is unique to the rest of the country, as it offers unpaid suppliers and contractors two independent types of claims. One is against the payment bond, and the other is against construction funds. Using both of these remedies is best, as this post explains how they are different and can work together.
FAQ: The Difference Between Payment and Performance Bonds
Closing out the State Bond Claim Series, this post mentions something that has gone unmentioned throughout the month. Every state public work usually has two bonds posted to the project, a payment and a performance bond. These two bonds are completely different and can sometimes be confused, but this post clears the confusion to help contractors and suppliers understand which bonds do what, and which to turn to for payment.