Can a sub-contractor file a Bond Claim without having properly filed a 20-day notice?

Question

Can a sub-contractor file a Bond Claim without having properly filed a 20-day notice?

4 weeks ago

I was reading a Levelset article discussing the changes made in 2011 by SB 293, Padilla. The article states that:
“[t]here is no longer a safety net allowing claims at the completion of construction, and therefore, those who do not properly send their preliminary notices on-time, will no longer have any rights to make a claim against the payment bond or to file a stop notice.”

As I understand it, a subcontractor can still make a claim against a payment bond under the rules of CA Civ Code section 9560. Am I missing something in my reading?

Thank you.

Christopher Ng · Answer 1 · 2019-11-15

Good afternoon —

Subcontractors can still assert payment bond claims without a preliminary notice, as long as a timely notice of payment bond claim is made to the surety and principal. However, there is a chance that such a bond claim (with no proper preliminary notice served) may be defeated by a showing that monies were paid downstream in “good faith” and, in such a case, the surety and principal may have a defense to such a payment bond claim. The only want to prevent this argument is to timely do a preliminary notice.

—CN

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