Minnesota Bond Claim Guide and FAQs

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Minnesota Bond Claim Overview

Minnesota

Preliminary Notice Deadlines
None / not applicable.

Minnesota

Bond Claim Deadlines
Prime contractors cannot file a claim against their own payment bond.

Minnesota

Preliminary Notice Deadlines
None / not applicable.

Minnesota

Bond Claim Deadlines
120 Days

Must file notice of bond claim with the prime contractor and the surety within 120 days from last furnishing labor and/or material to the project.

Minnesota

Enforcement Deadlines
1 Year

Lawsuit to enforce the claim due within 1 year from the same last furnishing date.

Minnesota

Preliminary Notice Deadlines
None / not applicable.

Minnesota

Bond Claim Deadlines
120 Days

Must file notice of bond claim with the prime contractor and the surety within 120 days from last furnishing labor and/or material to the project.

Minnesota

Enforcement Deadlines
1 Year

Lawsuit to enforce the claim due within 1 year from the same last furnishing date.

Minnesota Bond Claim FAQs

Claim FAQs

What types of projects are covered under Minnesota’s public bond claim laws?

Contracts for the construction or improvement of property with a state, municipal corporation, school district, or other public board or body where the total estimated contract value is $175K or more are subject to the public payment bond claims laws in Minnesota.

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Minnesota Bond Claim FAQs
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Minnesota Bond Claim FAQs
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Who is protected under Minnesota’s public bond claim laws?

On a public project in Minnesota, a party that furnishes labor and/or materials to a general contractor or first-tier subcontractor is allowed to file a bond claim. Suppliers to suppliers are not generally protected, but if the supplier receiving the materials is considered a subcontractor under the Minnesota statutes, the supplying party is protected.

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Minnesota Bond Claim FAQs
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Minnesota Bond Claim FAQs
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When is the deadline to make a Minnesota bond claim?

Generally speaking, a bond claim in Minnesota must be received within 120 days after the claimant’s last date of furnishing labor and/or materials to the project.

However, case law holds that the parties may agree to increase the amount of time in which a claim may be made, if the language extending the claim period is in the bond itself, or expressly incorporated by reference. The period may not be shortened.

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Minnesota Bond Claim FAQs
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What information needs to be included in a Minnesota bond claim?

A Minnesota public bond claim should be in substantially the same form as provided under §574.31 and include the following information:

• Surety’s information;

• General contractor’s information;

• Description of the public work;

• Hiring party’s information;

• Description of labor and/or materials furnished;

• Amount claimed;

• Last date of furnishing labor and/or materials; &

• Finally, the claim should be notarized.

Download a free Minnesota bond claim form here.

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Minnesota Bond Claim FAQs
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Minnesota Bond Claim FAQs
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Who should receive a Minnesota payment bond claim?

A Minnesota bond claim must generally be given to both the surety and the general contractor who posted the bond.

Note: Be sure to send the notice of claim to the addresses listed on the payment bond. A harsh Minnesota Supreme Court decision still stands that invalidated a claim because the notice was sent to the general contractor’s address listed in the subcontract, rather than the one listed in the payment bond.

However, if the bond filed by the general contractor does not state both the general contractor’s and the surety’s address the claimant is not required to send notice to either party. Notwithstanding that technical requirement, it is advisable to provide the general and surety with written notice of the claim in any event.

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How must a payment bond claim be sent in Minnesota?

Bond claims in Minnesota must be served either personally or sent by certified mail. Sending by certified mail is considered a best practice as not only does it provide proof of service, but the claim is deemed to be served upon mailing, not upon actual receipt.

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Minnesota Bond Claim FAQs
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When is the deadline to initiate suit, or, how long is a Minnesota bond claim effective?

Generally speaking, a lawsuit must be commenced within 1 year from the date of the claimant’s last furnishing of labor and/or materials to the project.

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However, the time period in which suit may be initiated may be extended for 1 year by either a written stipulation between the claimant and the surety prior to the 1-year expiration of the original period to file suit, or if the claimant sends written notice to the surety at least 90 days prior to the expiration of the original 1-year period, via certified mail, and the surety does not object in writing within 30 days of receipt of that notice.

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Minnesota Bond Claim FAQs
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Minnesota Bond Claim FAQs
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Recent Questions & Answers About Minnesota Claims

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How to file a lien in Minnesota

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Minnesota Bond Claim Free Forms

Minnesota Notice of Claim on Payment Bond Form

Minnesota Notice of Claim on Payment Bond Form

This Minnesota Bond Claim form should be filed when a party is unpaid on a public construction project. Mechanics liens are not available on state, county,...

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Notice of Intent to Make Bond Claim Form

Notice of Intent to Make Bond Claim Form

A Notice of Intent to Make Bond Claim is not a required document, but it can be a powerful one. By sending this notice, a claimant...

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Minnesota Bond Claim Statutes

When you perform work on a state construction project in Minnesota, and are not paid, you can file a “lien” against the project pursuant to Minnesota’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.”

Minnesota’s Little Miller Act is within Minnesota Statutes, Chapter 574, and is reproduced below. Updated as of 2022.

Minnesota Little Miller Act

§ 574.26. Contractors' bond for public work

Subdivision 1. Citation.

(a) Sections 574.26 to 574.32 are the “Public Contractors’ Performance and Payment Bond Act,” within those sections referred to as “the act.”

(b) For the purposes of the act:

(1) “public body” means the state, municipal corporation, school district, or other public board or body; and

(2) “labor and materials” means work, skill, tools, machinery, materials, insurance premiums, equipment or supplies, or taxes incurred under section 290.92, chapter 268, or 297A; and

(3) “contract” means a contract with a public body for the doing of public work.

Subd. 1a. Exemptions: certain manufacturers; commissioner of transportation; road maintenance.

(a) Sections 574.26 to 574.32 do not apply to a manufacturer of public transit buses that manufactures at least 100 public transit buses in a calendar year. For purposes of this section, “public transit bus” means a motor vehicle designed to transport people, with a design capacity for carrying more than 40 passengers, including the driver. The term “public transit bus” does not include a school bus, as defined in section 169.011, subdivision 71.

(b) At the discretion of the commissioner of transportation, sections 574.26 to 574.32 do not apply to any projects of the Department of Transportation (1) costing less than the amount in section 471.345, subdivision 3, (2) involving the permanent or semipermanent installation of heavy machinery, fixtures, or other capital equipment to be used primarily for maintenance or repair, or (3) awarded under section 161.32, subdivision 2.

(c) Sections 574.26 to 574.32 do not apply to contracts for snow removal, ice removal, grading, or other similar routine road maintenance on town roads.

Subd. 2. Terms.

Except as provided in sections 574.263 and 574.264 or if the amount of the contract is less than the amount in section 471.345, subdivision 3, a contract with a public body for the doing of any public work is not valid unless the contractor gives (1) a performance bond to the public body with whom the contractor entered into the contract, for the use and benefit of the public body to complete the contract according to its terms, and conditioned on saving the public body harmless from all costs and charges that may accrue on account of completing the specified work, and (2) a payment bond for the use and benefit of all persons furnishing labor and materials engaged under, or to perform the contract, conditioned for the payment, as they become due, of all just claims for the labor and materials. Reasonable attorneys’ fees, costs, and disbursements may be awarded in an action to enforce claims under the act if the action is successfully maintained or successfully appealed.

Subd. 3. Penalty.

The penalty of each bond must not be less than the contract price, and if after the giving of the bond the contract price is increased, for any reason, the public body may require additional bonds, the penalties of which shall be not less than the amount of the increase, and if the additional bonds are not furnished within ten days after demand, the work on the contract shall cease until the additional bonds are furnished. In contracts made by the commissioner of administration or the Department of Transportation of the state, the commissioner of administration or the commissioner of transportation, respectively, may fix the amount of the bond penalty, but at not less than three-quarters of the contract price.

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§ 574.261. Public work; security

Subdivision 1. Certified or cashier’s check.

With the approval of the commissioner of administration and if the amount of the contract is not more than $5,000 a person may make a contract with the state to do public work and in place of giving the bonds required by section 574.26, submit to the commissioner of administration for deposit with the commissioner of management and budget (1) a certified check or cashier’s check in the same amount as is required for a performance bond as security to protect the state, and (2) a certified or cashier’s check in the same amount as is required for a payment bond for all persons furnishing labor and materials under or to perform the contract. The deposits are security for the payment, as they become due, of all just claims for labor and materials and for the performance and completion of the contract according to its terms.

Subd. 1a. Letters of credit.

Whenever Laws 1994, chapter 419, or other law or home rule charter requires a performance bond from a contractor doing a public work project of under $50,000 for a public body, the public body may permit the contractor to provide, in place of the performance bond, an irrevocable bank letter of credit in the same amount as required for the bond and subject to the same conditions as the bond.

Subd. 2. Claims.

A person entitled to the protection of the deposit in place of a payment bond and wishing to take advantage of its benefits shall, no later than 120 days after the person’s last contribution of labor and materials was furnished to the public work that is the subject of the contract, notify in writing the commissioner of administration and the commissioner of management and budget of the person’s claim, giving the names of the parties involved and the amount and nature of the claim. If an action is commenced to obtain the benefit of the deposit in place of a payment bond, a judgment must not be entered within 30 days after giving the notice of the claim and the state or any person entitled to the protection of the deposit may be admitted on its motion as a party to the action and the court shall determine the rights of all parties in the premises. In such suit in which the commissioner of management and budget is a party, the court may order the commissioner to make payment among the parties to the suit entitled to payment. If the amount of the deposit is insufficient to pay the claims in full, the court may direct that they be paid on a prorated basis. The deposit in place of a payment bond made with the commissioner under this section shall be held by the commissioner for 120 days after the last item of labor and materials was furnished to the public work that is the subject of the contract. If a claim is not filed within the 120-day period, the deposit shall be returned to the person making it. If a claim is filed within the 120-day period, the deposit shall be disbursed by the commissioner of management and budget under an order of the court.

Subd. 3. Appropriation.

Money deposited with the commissioner of management and budget under this section is annually appropriated to the commissioner of management and budget to carry out this section.

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§ 574.27. Bidders to have right of action in certain cases

A public body may require that a bidder provide a bid bond or other security as a proposal guaranty that the bidder will enter into a contract if its bid is accepted. Any bidder upon any public work or public improvement of any kind in this state where bids are received and where, in connection with such bids, a deposit of money, or a certified check, or bid bond or other security must be provided with the bid, the public body causing such public work or other public improvement to be made or done shall be liable to such bidder for a return of the money, certified check, or other thing of value so deposited if the bidder’s bid on such public work or improvement is not accepted, or if the bidder’s bid is accepted before the bid expires, after the bidder enters into a contract for the work and provides acceptable security in connection with it. This liability exists even though the failure to return the money, certified check, or other thing of value is due to the defalcation or unlawful conversion of the thing of value by the officer of the public body charged with the custody of it.

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§ 574.28. Approval and filing of bond

Before beginning work on the contract for the public work, the contractor on whose behalf the payment and performance bonds were issued must file both bonds with the treasurer, board, or officer having financial management of the public body named in the bonds. The payment and performance bonds must list the address of the contractor on whose behalf the bonds were issued and of the surety providing the bonds. The payment and performance bonds, if acceptable in form and content, must be approved by the board or officer having financial management of the public body, or by the public body’s treasurer. The public body must make the payment and performance bonds available for inspection and copying upon request. An assignment, modification, or change of the contract, or change in the work covered by the contract, or an extension of time to complete the contract, does not release the sureties on the bonds.

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§ 574.29. Failure to get payment bond

If the state or other public body fails to get and approve a valid payment bond or securities in place of a payment bond as required by the act, the public body for which work is done under the contract is liable to all persons furnishing labor and materials under or to perform the contract for any loss resulting to them from the failure. The public body is not liable if the bond does not list the proper address of the contractor on whose behalf the bond was issued or of the surety providing the bond.

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§ 574.30. Insolvent or insufficient sureties

When, in the public body’s judgment, a surety on a bond required by the act is insolvent, or for any cause is no longer a proper or sufficient surety, the public body may require the contractor to furnish a new or additional bond within ten days; and thereupon, if so ordered by the public body, all work on the contract must cease until the new or additional bonds are furnished. If the bonds are not furnished within the ten days, the public body may, at its option, terminate the contract and complete the same as the agent, and at the expense of the contractor and its sureties.

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§ 574.31. Limit of time to bring action

Subdivision 1. Claims on performance bonds.

In the event of a claim by the public body on a performance bond, no action shall be maintained later than permitted under the statute of limitations applicable to the claim. Nothing in this subdivision may be construed to otherwise affect the common law or equitable rights of performance bond sureties, principals, or public bodies that are obligees.

Subd. 2. Claims on payment bonds.

(a) In the event of a claim on a payment bond by a person furnishing labor and materials, no action shall be maintained on the payment bond unless, within 120 days after completion, delivery, or provision by the person of its last item of labor and materials, for the public work, the person serves written notice of claim under the payment bond personally or by certified mail upon the surety that issued the bond and the contractor on whose behalf the bond was issued at their addresses as stated in the bond specifying the nature and amount of the claim and the date the claimant furnished its last item of labor and materials for the public work. The addresses of the contractor and the surety listed on the bond must be addresses at which the companies are authorized to accept service of the notice of the claim. If an agent or attorney-in-fact is authorized to accept service of notice of the claim for the contractor or surety, that fact must be expressly stated in the bond along with the address of the agent or attorney-in-fact at which service of the notice of the claim can be made. For the purpose of this section, notice is sufficient if served personally or via certified mail to the addresses of the contractor and surety listed on the bond. The form of notice is sufficient if it is substantially as follows:

NOTICE OF CLAIM ON PAYMENT BOND FOR PUBLIC WORK

TO: _____________________________ (Surety that issued payment bond) and _____________________________ (The contractor on whose behalf the bond was issued).

NOTICE IS HEREBY GIVEN that the undersigned claimant has a claim against the above-named surety for labor and materials furnished by the undersigned for the public work described as follows: __________________________________________________________

__________________________________________________________  (Description of the public work)

The labor and materials were furnished under a contract or agreement with __________________________________________________________ (Name and address of contractor or supplier requesting labor and materials from the claimant)

The nature of the labor and materials furnished is as follows:

__________________________________________________________

__________________________________________________________

The amount of the claim is: _____________________________.

The date the claimant last furnished labor and materials to this public work is the _____ day of _______________, __________.

Claimant seeks payment of the claim according to the law.

_____________________________

Claimant

_____________________________

_____________________________

Address

STATE OF _____________________________

ss.

COUNTY OF _____________________________

_____________________________ being duly sworn on oath says that _____________________________ is _____________________________ of the claimant named above and has knowledge of the claim and that the claim is correct, and no part of the claim has been paid.

Signed and sworn to before me

on _____________________________,

by _____________________________.

(Notary Seal)

Notary Public

(b) If the contractor providing the payment bond fails to comply with the filing requirements of section 574.28 by failing to state both its address and the address of the surety providing the bond, then a claimant under the bond need not provide either the surety or the contractor written notice of its claim under paragraph (a).

(c) An action to enforce a claim against the surety under the bond must be commenced within one year from the date of completion, delivery, or provision by the claimant of its last item of labor and materials for the public work stated in its notice of claim. If no notice of claim was required because the contractor providing the bond failed to comply with the requirements of section 574.28, then any action under the bond must be commenced within one year from the actual date of completion, delivery, or provision by the claimant of its last item of labor and materials for the public work. Any other person having a cause of action on a payment bond may be admitted, on motion, as a party to the action, and the court shall determine the rights of all parties. If the amount realized on the bond is insufficient to discharge all the claims in full, the amount must be prorated among the parties.

(d) The claimant can extend the time within which to bring an action to enforce a claim under the bond to beyond that specified in paragraph (c) either by:

(1) written stipulation between the claimant and surety stating the extended deadline and executed by both parties before the expiration of one year from the actual date of completion, delivery, or provision by the claimant of its last item of labor and materials for the public work; or

(2) written notice extending by one year the deadline specified in paragraph (c) sent by the claimant to the surety via certified mail 90 days before the expiration of the deadline specified in paragraph (c), which notice is not objected to in a return written notice sent by the surety to the claimant via certified mail within 30 days after the surety’s receipt of claimant’s notice. If a claimant’s payment is not yet contractually due within one year from the actual date of completion, delivery, or provision by the claimant of its last item of labor and materials, the court shall continue and not dismiss the action until the payment is due.

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§ 574.32. Application of payments

If a claimant on a payment bond had actual knowledge or should have known that a payment it received was for labor and materials supplied under, or to perform, public work under which a payment bond was provided, then the claimant must prove that it applied the payment to its account for that public work. Its claim must be reduced to the extent it cannot so prove.

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§ 574.38. Letters of credit

Whenever this chapter or other law or home rule charter requires a performance bond from a contractor doing a public work project of under $50,000 for a home rule charter or statutory city, county, town, school district or other local government authority, the contractor may be permitted to provide, in lieu of the bond, an irrevocable bank letter of credit in the same amount required for the bond and subject to the same conditions as the bond.

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§ 574.39. Surety bonds; public entities

The state or a county, town, home rule charter or statutory city, school district, or other municipal corporation or political subdivision of this state shall not require a contractor to procure a surety bond from a particular insurance or surety company, agent, or broker on a public improvement which is or has been competitively bid or negotiated. Nothing in this section prohibits a public entity from requiring customized features in its surety bond coverage as considered appropriate and necessary by the public entity or from requiring that the insurer issuing the bond have a minimum financial rating as specified by the public entity.

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