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Virgin Islands: Is the project protected under the Miller Act? Bond Claim? Or simply a Lien?

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We were on a hurricane relief project in the US Virgin Islands. FEMA - Funded the project FEMA reimburses VIHFA (Virgin Islands Housing Finance Authority) after VIHFA pays contractor VIHFA pays AECOM (large engineering firm) AECOM pays their subcontractor That subcontractor pays our employer Our employer pays us The work we did was on hurricane damaged houses owned by individuals. The property we worked on was NOT owned by the government. AECOM's subcontractor is required to have a payment bond. Questions: 1. Is AECOM's subcontractor's payment bond governed by the Miller Act?

1 reply

Jun 17, 2019
Good question! First, it's worth mentioning that I'm not able to provide you legal advice or perform a legal review of your circumstances and tell you how to proceed. However, I can provide some information that should help you sort through your situation.

With that in mind: The presence of federal funding doesn't automatically mean the Miller Act is in play, and generally, the same is true of all public projects. Typically, property must be publicly owned in order for the Miller Act or a state/territory's Little Miller Act to apply. For property owned by individual homeowners or businesses, generally, the state's mechanics lien statute will provide the protection for nonpayment for construction work.

Even if the mechanics lien statute applies, in the USVI, the owner or another party providing work to the project can issue a payment bond for the project in order to protect the property from lien claims. And, if a payment bond is present, recovery would generally need to come against the bond (rather than via a mechanics lien claim). To file a claimant against the surety's bond, a claimant must file a notice of their claim with both the surety provider and the party who secured the bond within 60 days after furnishing labor or materials. You can learn more about that here: US Virgin Islands Lien and Bond Claim FAQs.

As for determining whether a bond has been provided because it's required by the Miller Act, by some other law, or simply by the owner, contractor, or a sub themselves to prevent liens - reading the bond itself should provide insight as to whether the bond was given pursuant to some law or merely to avoid mechanics liens on the property. If it's required by law, the bond will normally say that or will cite the law under which it is given. Further, asking the party who provided the bond could be helpful, too. They may be willing to provide some insight there - and other project participants may know, too. In any event, if necessary, providing an official written request for a copy of the bond should help clear things up too. If the bond was required by the Miller Act, a copy of that bond must be given to the party who requested it.

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