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What are my options if a public Texas job isn't bonded?

It's required through our contract that any bonding information needs to be forwarded over to us ahead of starting a job. We're officially done with our part on a state/county job that's still going on. We're experiencing problems now with collecting the retainage for the job. We never received any bonding information on the job, and are looking at sending a Bond Claim now for it. I'd like to learn more on what would happen if a bond doesn't exist on the job? If it doesn't exist, would we then need to proceed with a private lien claim instead?

1 reply

Jan 15, 2020

Sometimes, Texas public projects won't be bonded. Now, if a job is publicly owned, the non-existence of payment and performance bonds won't then mean mechanics lien rights against the property are in play instead. If the land is publicly owned, mechanics lien rights (against the property) will not be available. Note that for additional clarity on the project's contract and bonding information, it's also a good idea to request that information from the governmental agency heading up the project. Under Sec. 2253.026 of the Texas Little Miller Act, the governmental entity will need to provide a requesting party a copy of the project's bond (if present). Texas does, however, provide another recovery option on public projects that might not be large enough to warrant bonds: a claim on contract funds. When properly made, a claim on contract funds will essentially freeze a portion of the project funds. Once a claim is made, the public entity must withhold the amount of the claim from their general contractor until the dispute is settled. The deadline for making such a claim is the 15th day of the second month following each month when the claimant furnished labor and/or materials for which there's an unpaid balance. You can learn a little more about how to bring a claim against project funds under the FAQ questions here: Texas Bond Claim Guide and FAQs.

Other payment recovery options

Of course, there are always recovery tools beyond bond claims and claims on funds. For one, sending simple invoice reminders can sometimes be enough to force payment. In some situations, that gentle nudge might be all that's necessary. Alternatively, escalating things a bit with a payment demand letter could be effective, too. Demand letters will usually include specific legal threats and put a deadline on payment. Of course, actually bringing legal claims forward - like a breach of contract claim or a claim under the Texas prompt payment laws - could do the trick, too. And, if the claim is for under $10,000, small claims court might be an option for streamlining things.

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