Home>Levelset Community>Legal Help>I have a public job in California that is in the $20-$30K range. I'm selling the G.C who states they were not required to have a bond. Can this be correct since the principles of sovereign immunity, makes mechanics liens not available against public property administered by state or local goverments?
I have a public job in California that is in the $20-$30K range. I'm selling the G.C who states they were not required to have a bond. Can this be correct since the principles of sovereign immunity, makes mechanics liens not available against public property administered by state or local goverments?
Prime contractor states they didn't have to have bond on public job but liens are not accepted.
Feb 14, 2018
This is a great question. You're spot on with the fact that mechanics liens will not be available on public property, which, as you stated, is why payment bonds are required on public projects. Payment bonds are required by the California Little Miller Act, but under the act, such bonds are only required when a California public project exceeds $25,000 - and it sounds like this project is right around that threshold. Plus, there are a few other situations where a payment bond will not be required by the CA Little Miller Act (including projects for the Legislature, the courts, any agency in the judicial branch of government, or the University of California). In many states, a situation like this would create a gap in protection. However, in California, a Stop Payment Notice is available and will help enforce payment. A Stop Payment Notice is typically sent to the public entity commissioning the project and the prime contractor, and it will put the public entity on notice that there are unpaid sums for the project. It may be sent whether work is partially or wholly complete. Upon receipt of the notice, a public entity must withhold payments to the prime contractor in an amount that is sufficient to satisfy the claim for nonpayment. A 20-day preliminary notice is a prerequisite to a Stop Payment Notice, as well. You can learn more about Stop Payment Notices here, or take a look at zlien's free form for that notice here.
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