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what are my options to protect my payment rights when the owner has a performance and payment bond on the property?

ArizonaSlow Payment

We performed work on a church in December and the GC has been dragging their feet on payment. We had some re-work which we completed in February and March which is part of the reason payment has been slow, however I need to motivate them to pay us. I mentioned the possibility of filing a lien, and the project manager said "the owner has a performance a payment bond on the project which will prevent the lien from being attached to the property title." What are my options? Thank you

1 reply

May 12, 2020

The first thing you need to do is contact the project owner to obtain a copy of the bond. You need the terms of the bond in case they dictate how a bond claim must be made. You can make a claim on the bond in accordance with the bond's terms. Keep in mind, however, that the surety will not just pay what you ask. The surety will contact the GC and get their side of the story before responding. If the GC says you are not yet owned the money, the surety most likely will not pay. So although a bond does provide a source of payment, it does not necessarily speed up the process of payment. If you are certain that you are owed the money (no issues with quality of work, or you have an admission from the GC that the money is owed), you might consider a lawsuit since those are harder to ignore than a demand for payment from the bond. The drawbacks there are the expense of the lawsuit, and you need to take a good look at the contract terms to see what strings are attached to payment (i.e., pay when paid or pay if paid clauses)

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