Maryland Bond Claim (Little Miller Act) Overview

It’s easy to file and manage your Maryland bond claims with zlien, the industry’s only all-in-one bond claim and security rights management platform. Get complete control over your bond claim rights on a state, county, or municipal project, by using intelligent technology. To learn more about Maryland’s bond claim laws and requirements, read the frequently asked questions below.

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Maryland

Preliminary Notice Deadlines
None / not applicable.

Maryland

Bond Claim Deadlines
None / not applicable.

Maryland

Preliminary Notice Deadlines
None / not applicable.

Maryland

Bond Claim Deadlines
90 Days

For those who did not contract with the prime, must file a bond claim with the prime contractor within 90 days of last furnishing labor or materials to the project (good practice for those who did contract with prime as well). Enforcement lawsuit must be filed within 1 year from final acceptance of the project.

Maryland

Preliminary Notice Deadlines
None / not applicable.

Maryland

Bond Claim Deadlines
90 Days

For those who did not contract with the prime, must file a bond claim with the prime contractor within 90 days of last furnishing labor or materials to the project (good practice for those who did contract with prime as well). Enforcement lawsuit must be filed within 1 year from final acceptance of the project.

Maryland Bond Claim (Little Miller Act) FAQs

Maryland Bond Claim FAQs

Who Is Protected under Maryland Bond Claim Laws?

In Maryland, all parties supplying labor or materials to the prime contractor, subcontractor, or sub-subcontractor on a public project may bring suit on a payment bond. A bond is required for all public projects larger than $100,000. Suppliers to suppliers are not protected.

File A Maryland Bond Claim

When is the Deadline to File a Maryland Bond Claim?

Bond Claim: Written notice must be given within 90 days from the date of last furnishing labor and/or materials. Note that the 90-day period is a requirement for when the claim must be received, not the time by which the notice of claim must be sent.

Contract Funds on State Job: The claim must be received by the general more than 10 days after the general has received payment from the state if the claimant remains unpaid at that time.

Who Should Receive the Maryland Bond Claim?

Bond Claim: The claim must be given to the general contractor, however it may be best practice to also notify the public entity and the surety (if known).

Contract Funds on State Job: Claim must be sent to the State Procurement Officer.

Note that to obtain a copy of the bond, the claimant must send final notice to the Comptroller or other officer in charge of the office in which the bond is required to be filed.

When is the Deadline to Initiate Suit, or, How Long is My Maryland Bond Claim Effective?

After 90 days from last date work was performed or material supplied for which claim was made, but before one year of date of final acceptance of work performed under prime contract.

What Must the Maryland Bond Claim Include?

Bond Claim: The amount being claimed and the name of the party to whom the material was furnished or for whom the labor was performed.

Contract Funds on State Job: The name of the contractor, identification of the project, the amount in dispute, an itemized description of the facts on which the dispute is based, and an explanation of the dispute if known.

What Are the Lien Waiver Rules?

Maryland does not have statutory lien waiver forms, and therefore, you can use any lien waiver forms. Since lien waivers are unregulated, be careful when reviewing and signing lien waivers. See this article: Should You Sign That Lien Waiver?.

Also, Maryland state law prohibits contractors and suppliers from waiving their right to file a mechanics lien in contract. You can learn more about the prohibition of such “no lien clauses” at this article: Where Can You Waive Your Lien Rights Before Payment?

Can Suppliers to Suppliers File Bond Claims?

No, suppliers to suppliers likely cannot file a bond claim in Maryland.

How Must the Maryland Bond Claim Be Sent?

Bond Claim: The claim must be sent to the general contractor by certified mail to the contractor’s residence or where contractor has an office or does business. Verification of receipt is generally good practice, as the consequences of the general’s refusal of the mailing is unclear.

Contract Funds on State Job: No method provided by statute, but must be actually received.

Maryland Public Project Preliminary Notice FAQs

Do I Need to Send a Maryland Preliminary Notice?

No. However, on a state project a subcontractor must notify the state procurement officer if the general receives a payment but does not timely pay the subcontractor.

When do I Need to Send a Maryland Preliminary Notice?

N/A

What if I Send the Maryland Preliminary Notice Late?

N/A

How Should the Maryland Preliminary Notice be Sent?

N/A

To Whom Must the Maryland Preliminary Notice be Given?

N/A

Maryland Bond Claim (Little Miller Act) Statutes

When you perform work on a state construction project in Maryland, and are not paid, you can file a “lien” against the project pursuant toMaryland ‘s Little Miller Act. Since the claim is not against the state or county’s actual property, but instead against a posted bond, the claim is not really called a “lien” but is more frequently referred to as a “bond claim” or “little miller act claim.”

Maryland’s Little Miller Act is found in the Maryland Code, Division II, title 17, Subtitle

Maryland Little Miller Act

§ 17-101. Definitions.

(a)  In general.- In this subtitle the following words have the meanings indicated.

(b) Payment security.- “Payment security” means security to guarantee payment for labor and materials, including leased equipment, under a contract for construction.

(c)  Performance security.- “Performance security” means security to guarantee the performance of a contract for construction.

(d) Public body.- “Public body” means:

(1) the State;

(2) a county, municipal corporation, or other political subdivision;

(3) a public instrumentality; or

(4) any governmental unit authorized to award a contract.

(e)  Supplier.-

(1) “Supplier” means a person who supplies labor or materials.

(2) “Supplier” includes a lessor of equipment to the extent of the fair rental value of the equipment.

§ 17-102. Scope of subtitle.

(a)  In general.- This subtitle does not limit the authority of a public body to require performance security in addition to, or in cases other than, those specified under §§ 17-103, 17-104, 17-106, and 17-107 of this subtitle.

(b) Application to construction contracts.- This subtitle applies only to security for a construction contract.

(c) Application to Baltimore City.-

(1) By ordinance, Baltimore City may provide for a program to satisfy the bonding requirements under §§ 17-103, 17-104, 17-106, and 17-107 of this subtitle with respect to any construction contract:

(i)  that does not exceed $200,000; and

(ii) for which State money is not used.

(2) The program shall provide for payment security of at least 50% of the total amount payable under the contract.

§ 17-103. Security on construction contracts.

(a) Contracts exceeding $100,000.-

(1) Before a public body awards a construction contract exceeding $100,000, the contractor shall provide payment security and performance security that meet the requirements of § 17-104 of this subtitle.

(2) The security shall be:

(i)  for performance security, in an amount that the public body considers adequate for its protection; and

(ii) for payment security, at least 50% of the total amount payable under the contract.

(b) Contracts exceeding $25,000 but not exceeding $100,000.- A public body, other than the State or a unit of the State government, may require payment security or performance security for a construction contract if:

(1) the contract exceeds $25,000 but does not exceed $100,000; and

(2) the amount of the security does not exceed 50% of the contract amount.

§ 17-104. Type of security

(a)  In general.- Payment security or performance security required under this subtitle shall be:

(1) a bond executed by a surety company authorized to do business in the State;

(2) cash in an amount equivalent to a bond; or

(3) cash in an amount that is satisfactory to the public body awarding the contract.

(b) Amount of mortgage or deed of trust included.-

(1) Subject to paragraphs (2) and (3) of this subsection, performance security may include the granting of a mortgage or deed of trust on real property located within the State if such security is satisfactory to the public body awarding the contract.

(2) The face amount of a mortgage or deed of trust on real property granted as security under this subsection may not exceed 75% of the contractor’s equity interest in the property.

(3) A mortgage or deed of trust accepted under this subsection shall be recorded by an official designated by the public body accepting the mortgage or deed of trust in the land records of the county where the real property is situated in accordance with § 3-103 of the Real Property Article.

§ 17-105. Form of security; filing.

(a)  In general.- Security under this subtitle:

(1) if required by the State or a unit of the State government, shall be payable to “the State of Maryland”; or

(2) if required by any other public body, shall be payable to that public body.

(b) Approval.- The form of payment security or performance security shall be approved:

(1) for the State or a unit of the State government, by the Attorney General; and

(2) for any other public body, by its attorney.

(c)  Filing required.- The contractor shall file the security or evidence of a trust account established as security:

(1) if payable to the State under this section, in the Office of the Comptroller; or

(2) if payable to any other public body, in the appropriate office of that public body.

§ 17-106. Certification of payments.

Before a contractor receives a progress or final payment under a contract covered by payment security, the contractor shall certify in writing that, in accordance with contractual arrangements, suppliers:

(1) have been paid from the proceeds of previous progress payments; and

(2) will be paid in a timely manner from the proceeds of the progress or final payment currently due.

§ 17-107. Waiver of mechanics' liens.

A contractor who provides payment security under this subtitle in connection with a construction contract awarded by a public body need not execute a waiver of a mechanics’ lien to the public body.

§ 17-108. Action on security.

(a)  In general.- Subject to subsection (b) of this section, a supplier may sue on payment security if the supplier:

(1) supplied labor or materials in the prosecution of work provided for in a contract subject to this subtitle; and

(2) has not been paid in full for the labor or materials within 90 days after the day that the person last supplied labor or materials for which the claim is made.

(b) Payment owed by subcontractor.-

(1) A supplier who has a direct contractural relationship with a subcontractor or sub-subcontractor of a contractor who has provided payment security but no contractual relationship with the contractor may sue on the security if the supplier gives written notice to the contractor within 90 days after the labor or materials for which the claim is made were last supplied in prosecution of work covered by the security.

(2) A notice under this subsection:

(i)  shall state with substantial accuracy the amount claimed and the person to whom the labor or material was supplied; and

(ii) shall be sent by certified mail to the contractor at the contractor’s residence or a place where the contractor has an office or does business.

(c) Certification of security.-

(1) On request by a person who submits an affidavit verifying that the person has supplied labor or materials but has not been paid or is being sued under this section, the Comptroller or the officer in charge of the office where the payment security or evidence of security is required to be filed shall issue:

(i)  a certified copy of the payment bond; or

(ii) for other security, a certified statement of the security.

(2) The person requesting certification shall pay a reasonable fee, set by the Comptroller or other officer required to issue the certification, to cover the costs of preparation.

(3) A certification under this section is prima facie evidence of the contents, execution, and delivery of payment security.

(d) Executory contract between supplier and contractor.-

(1) An executory contract between a supplier and a contractor or subcontractor that is related to a construction contract may not waive or require the supplier to waive the right to sue on payment security under this section.

(2) A provision in an executory contract between a supplier and a contractor or subcontractor that is related to a construction contract and that conditions payment to the supplier on receipt of payment by the person from a public body or other third party, may not abrogate or waive the right of the supplier to sue on payment security under this subtitle.

(3) A provision of a contract made in violation of this subsection is void as against the public policy of the State.

§ 17-109. Venue; limitations; costs.

(a)  Venue.- An action on a payment bond required by this subtitle shall be filed in the appropriate court of the county where:

(1) the contract was executed and performed; or

(2) the contractor has its principal place of business.

(b) Limitations period.- An action on a payment bond required by this subtitle shall be filed within 1 year after the public body finally accepts the work performed under the contract.

(c)  Costs.- An obligee named in a bond or a trustee for any other security is not liable for any costs in connection with an action on a payment bond required by this subtitle.

§ 17-110. Retention of percentage of total amount of contract as security.

(a)  Applicability of subsections (b)(1) through (3), (c) and (d).- Subsections (b)(1) and (2), (c), and (d) of this section do not apply to an entity that is required to comply with the provisions of § 13-225 of this article.

(b) In general.-

(1) If a contractor has furnished 100% payment security and 100% performance security in accordance with this subtitle under a contract for construction awarded by a public body, the percentage specified in the contract for retainage may not exceed 5% of the total amount of the contract.

(2) In addition to retainage, a public body may withhold from payments otherwise due a contractor any amount that the public body reasonably believes necessary to protect the public body’s interest.

(3) Except as provided in paragraph (4) of this subsection, within 120 days after satisfactory completion of a contract for construction, a public body shall release any retainage due to the contractor.

(4) If there is a dispute or contract claim between the contractor and the public body concerning the satisfactory completion of a contract for construction, the public body shall release the retainage to the contractor within 120 days after the resolution of the dispute or contract claim.

(c)  Retention of payments due a subcontrator.-

(1) A contractor may not retain a percentage of payments due a subcontractor that exceeds the percentage of payments retained by the public body.

(2) Paragraph (1) of this subsection may not be construed to prohibit a contractor from withholding any amount in addition to retainage if the contractor determines that a subcontractor’s performance under the subcontract provides reasonable grounds for withholding the additional amount.

(d) Retention of payments due a lower tier subcontractor.-

(1) A subcontractor may not retain a percentage of payments due a lower tier subcontractor that exceeds the percentage of payments retained from the subcontractor.

(2) Paragraph (1) of this subsection may not be construed to prohibit a subcontractor from withholding any amount in addition to retainage if the subcontractor determines that a lower tier subcontractor’s performance under the subcontract provides reasonable grounds for withholding the additional amount.

(e) Construction.- This section may not be construed to limit the application of the remaining provisions of this subtitle.

§ 17-111. Short title.

This subtitle may be cited as the “Maryland Little Miller Act”.