Home>Levelset Community>Legal Help>So my question is since we filed our notices in time and it got sent to the bonding company are we able to file or do anything to get our money?

So my question is since we filed our notices in time and it got sent to the bonding company are we able to file or do anything to get our money?

We are in Texas, a contractor threw us off a project and will not pay for any materials or labor for the months we worked. This has hurt our company tremendously. We filed notices on a project on time but because of being mislead with a zlien rep we did not file on the bond in time. So my question is, since we filed our notices on time and it got sent to the bonding company are we able to file or do anything to get our money? Would sending a demand letter from an attorney to bonding company help?

1 reply

Mar 18, 2019

I'm sorry to hear that you have not been paid, and the effect that has had on your business. Texas mechanics lien and bond claim laws are extremely complex, and according to a Texas court, "not a model of clarity."

For parties on public projects in Texas, there are two potential remedies. A bond claim, or a claim on contract funds. Bond claims in Texas work differently as compared other states – rather than one single claim, Texas bond claims are made on a recurring basis. A bond claim must be mailed no later than the 15th day of the 3rd month after each month in which the claimant furnished labor and/or materials for which there is an unpaid balance. This means that the 3rd month public notice is technically the "bond claim" itself.

Accordingly, if a party in Texas sends all of the required public notices (and delivers those notices to the required parties) - there is no other distinct "claim" notice that must be sent to finalize the bond claim. Note, however, that an action to enforce a claim on the contractor’s bond must be initiated more than 60 days after giving notice, but less than the earlier of 1 year after giving the notice of the claim or the completion of the project as a whole, whichever is earlier.

There are, however, other potential opportunities to get paid. A lawsuit for breach of contract, unjust enrichment, or another cause of action, or a demand letter from an attorney threatening the same, can sometimes work to jump-start payment. Additionally, Texas has prompt payment statutes that govern the timing of payment to parties who provide work on public projects. Texas statute § 225.022 states that:

"(a) A vendor who receives a payment from a governmental entity shall pay a subcontractor the appropriate share of the payment not later than the 10th day after the date the vendor receives the payment.

(b) The appropriate share is overdue on the 11th day after the date the vendor receives the payment."

A potential violation of the prompt pay requirements also opens up an opportunity to inform the nonpaying party of additional potential causes of action. Good luck and I hope you get paid.

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