Getting a mechanics lien release bond is harder than you think
Subcontractors and suppliers can get a lot of pushback when they send a notice of intent to lien, or actually file a mechanics lien claim. The GC or property owner...
Payment Bonds
If you need help with payment bonds, this page compiles helpful articles about payment bonds in Construction. A payment bond acts like an insurance policy, guaranteeing that contractors and other sub-tier parties on a project will receive payment. The bond also protects the property from mechanics lien filings. If a contractor or supplier doesn’t receive payment, they can file a bond claim, rather than a mechanics lien. Browse the articles below to learn how to use payment bonds to get paid on a construction project.
Typically, the prime contractor will purchase a bond from a bonding, Surety, or insurance company. Often, the lender will include a contract provision requiring the prime or general contractor to bond a project. In most cases, it is only the prime contractor who is required to obtain a payment bond.
Bonds are often required for public construction projects. For federal building projects, the Miller Act regulates the process of payment bonding for contractors. Many states utilize the Miller Act as a guideline for their own rules for payment bonds on government projects.
To maintain the right to file a bond claim, contractors need to meet filing deadlines and notice requirements specific to their project location. Improper or late bond claims may be challenged, delayed, or denied.
While a mechanics lien filing is secured by the physical property, a bond claim is secured by the payment bond. In a lot of ways, since the foreclosure process can be so cumbersome, claims against payment bonds can be cleaner, simpler, and faster than filing a mechanics lien claim.
If you can’t find what you’re looking for below, you can ask a question about payment bonds for free at the Expert Center. There, you can get some legal advice from a construction attorney or another payment expert.
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How to Make a Washington Payment Bond Claim | A Step-by-Step Guide
The Washington Little Miller Act ensures that project participants get paid on public construction projects. On projects of a certain size, the prime contractor must post a payment bond on...
How to Make a Michigan Payment Bond Claim | A Step-by-Step Guide
In Michigan, the Little Miller Act provides protection against nonpayment to those working on state or local government-funded construction projects. The Act requires that the prime contractor post a payment...
Can a Property Owner Make a Claim Against a Payment Bond?
Payment bonds can provide property owners with important protection against the possibility of mechanics liens being filed on their property. They replace a lien’s interest in the property with a...
How to Make a Nevada Payment Bond Claim | A Step-by-Step Guide
For those who provide construction labor or materials to a public works project in the state of Nevada, the Little Miller Act ensures that payment will be made. Like every...
Payment Bond Claims: Common Myths You Should Ignore
For contractors working on a state or local public construction project, the state law will likely require a payment bond. When a subcontractor or material supplier is faced with nonpayment,...
Construction Bonds: A Guide for Contractors and Suppliers
Many construction projects today require that contractors provide bonds. Construction bonds are protection for the owner against non-payment, lack of performance, company default, and warranty issues. There are several types...
Preliminary Notices Become Even More Crucial as Payment Bond Thresholds Rise
When payment bond thresholds rise, it's even more important for subcontractors and suppliers to send preliminary notice and foster healthy payment chains.
New Legislation Allows Payment Bonds on Mississippi Private Projects
Mississippi subcontractors and suppliers take note: contractors on private projects can now use payment bonds to keep mechanics liens off of their projects.
Construction Payment Bonds vs Performance Bonds – What Contractors and Suppliers Must Know
Payment bonds are a type of surety bond that is typically acquired by the prime contractor on a public works construction project. Learn everything you need to know about these...