Home>Levelset Community>Legal Help>We are the GC on a public project and have payment and performance bonds in place. The Project is now 100% complete and are billing for extra work ordered by the county and engineers. what is the legal recourse to demand payment? Can we place a lien on a public job that has bonding in place?

We are the GC on a public project and have payment and performance bonds in place. The Project is now 100% complete and are billing for extra work ordered by the county and engineers. what is the legal recourse to demand payment? Can we place a lien on a public job that has bonding in place?

The job is complete and we are trying to collect funds on additional work performed. The owners are now saying that they will not pay for the additional work performed. What can we do to demand payment? Lien? We are the GC and bond holder on the job. What is our recourse for payment here?

1 reply

Dec 13, 2017

First, a lien will not be an available remedy in this situation. Generally speaking, mechanics liens cannot encumber public property. Texas does allow for liens on funds for public projects to certain parties, but to a GC, such a lien is unavailable. However, instances like this are why prompt payment laws are in place. Sending another request or demand for payment that cites potential penalties for late payment may spur the county into action. If the work was done pursuant to request from the county, the work will give rise to penalties under Texas' prompt payment laws. However, payment is not is overdue until the 31st day after the later of: (1) the date the governmental entity receives the goods under the contract; (2) the date the performance of the service under the contract is completed; or (3) the date the governmental entity receives an invoice for the goods or service. If payments are outstanding and overdue, the payments will begin to accrue interest at the prime rate + 1%. Additionally, if a formal administrative or judicial action is eventually brought to recover payment, the prevailing party will be entitled to attorney fees. In sum, sending a demand letter or request for payment that identifies potential liability for the county (in the form of interest and possible attorney fees) along with proof that the work was requested and eventually completed often goes a long way to speeding up payment.

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