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Can I collect my retainage or not?

I am a subcontractor that did some concrete work for a GC on a project that is owned by the city/county. We finished our work and collected all but our retainage back in the middle of 2018. We sent monthly invoices for retainage owed and I even was in contact with an agent from the [bond] surety company. I have all of our correspondence printed out. She asked me to send her copies of all of our retainage invoices and I did. That was in May of 2019. Her exact words were, retainage is not due until the completion of the project. I didn't find out until October that the GC had been replaced. I looked and met with lawyers which wanted outrageous prices to file a lien. The last I heard, it was 6 months to file for retainage. I found levelset, proceeded with filling out the bond claim and submitted for review. I was told by levelset that all was good and everything was correct so I submitted everything. I recently received a letter from the bonding company and they are saying that they are denying my claim saying I missed the filing deadline. What can I do? I am also being told that I should have filed something called a Notice of Contractual Retainage?? But I have no clue what that is? Do I need to get a lawyer? Do I have a legit claim? Or did I get screwed?

1 reply

May 12, 2020

Collecting retainage payments is often a mess, especially on Texas projects. And, to best preserve rights to make a Texas payment bond claim, notice must be sent. Although, the retainage information is generally included along with other amounts in Texas public monthly notices, and that's generally sufficient to preserve the right to make a payment bond claim. So, if retainage was mentioned and identified in other public monthly notices, then a specific Notice of Contractual Retainage is generally unnecessary. If you've made a bond claim, that TX bond claim must be enforced at least 60 days after making the claim, but less than a year after the earlier of the following dates: (1) when the bond claim was made; or (2) the completion of the project. So, if a bond claim is made but more than a year passes after either of those dates, then a suit to enforce a claim against the bond (via lawsuit) will not be available. So, based on the information given above, it sounds like the surety may have stalled until the enforcement deadline passed.

Recovering retainage on a Texas public project

Even if enforcing your bond claim isn't an option, there are other tools that could be effective to force payment. For one, other legal claims will be on the table against your customer who failed to pay you. Claims like breach of contract, a claim under the TX prompt payment laws, etc. could be on the table. And, simply threatening to make those claims - like with a payment demand letter - could be effective, too. Finally, sending the debt to collections is yet another option that could lead to at least partial payment. With all of that being said, having an attorney guide you through different recovery options would be wise, especially considering filing a lawsuit may become necessary. Plus, threats made via an attorney tend to carry more weight. For help finding the right TX attorney, here's a great resource: Construction Attorneys in Texas.

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