Menu
Home>Levelset Community>Legal Help>A lender is requiring a payment & performance bond on a commercial construction project.

A lender is requiring a payment & performance bond on a commercial construction project.

IllinoisPayment BondPerformance Bond

A lender is requiring a payment & performance bond on a commercial construction project. My question is, who gets the bond and who is it written to? I am thinking the GC for both?

3 replies

Aug 1, 2022
If your lender is requiring the bonds, then I suspect that you will be required to provide them. I will need more details to provide a more complete answer.
0
Report Spam
Aug 2, 2022

Payment and Performance Bonds apply accross the board - to GC's, Subs, and could even be extended to suppliers. That said, the lender is most likely looking for bonds to cover the GC, with the expectation that the GC will control the operation of its subs and suppliers. 

Obviously, these general observations should be taken with a grain of salt. I recommend obtaining Counsel of your own to review and interpret the Lender's request for bonds, as well as the host of issues that will arise as the job proceeds.

Best of luck!

0 people found this helpful
Helpful
Aug 2, 2022
The payee of the bond could be either the lender for the owner, depending on the contract requirements. You are the principle of the bond and it’s your obligation to obtain it.
0 people found this helpful
Helpful