Our law firm represents hundreds of contractors who have supplied either goods or services in the the construction of real estate. This video and article explains what you need to know about collecting money owed to you using payment bond claims.
On private jobs where the customer has not made payment, we recommend a Mechanics and Material-man’s Lien as the next course of action. However on public property, you can not assert mechanics and material-men’s liens. Instead the contractor must pursue payment bond claims.
Payment bonds are a collections remedy that involves four entities: claimant, principle, owner, and surety. In addition, law requires payment bond claims on all the projects that exceed a certain dollar amount.
The Parties of Payment Bond Claims
First of all, the claimant is the party that supplied the goods or services that the customer has not paid for. The principle is the general contractor that is managing the project. The owner is the owner of the questionable property. And finally, the surety is the insurance company that guarantees performance of the general contractor on the job in exchange for premium payments.
The principal and the surety are both liable to the unpaid contractor under the bond. The law calls this joint and several liability.
The Miller Act found in 40 USC Section 3131 governs bond claims on public projects. Now in Georgia, two Little Miller Acts govern public projects involving state owned property. Similarly, the State Miller Act found in OCGA 131060, governs State projects. And finally, the Little Miller Act found in OCGA 369190 governs county and municipal public projects. The requirements of these two acts are identical in nature and are commonly referred to just as The Little Miller Acts.
Like mechanics liens, payment bonds must adhere to the terms of the payment bond. This includes proceeding in the perfection of the bond claim suit within one year of the completion of the project. So, it’s important to obtain a copy of the payment bond to review the terms set forth therein.
Payment Bond Claims Assistance
Having handled hundreds of payment bond claims, our office can assist you in locating a copy of the bond as well as the perfection of the bond claim. However, the actual terms of the payment bond are largely irrelevant to the determination of any payment bond coverage. The applicable payment bond statutes enacted in Georgia will overrule the provisions that the bond itself contains. So, contact one of our knowledgeable debt collection attorneys today to work on getting the money owed to you.