Different Projects, Different Remedies: Protecting Your Payment Rights
As we explain in our online webinar "Protect What You Are Owed in Turbulent Times," if you want to secure your right to get paid for the work or supplies you provide for a construction job, how you do so will depend heavily on the type of job you're involved in and where it's located. This post will explore some differences that affect how you secure your payment depending on the project.
Federal Projects
If you are a contractor or subcontractor on a construction project for the federal government, the Miller Act regulates how a contractor working on a federal construction project can file a payment claim. The prime contractor on a federal construction project must post a bond to ensure that all subcontractors and material suppliers get paid. Miller Act claims can be filed by first- and second-tier contractors, but as with all types of payment claims, there are specific procedures and timelines that must be followed if your claim is to be allowed.
State Projects
Many states have passed "little Miller Acts" similar to the federal version. These also require the prime contractor to post a bond and give subcontractors and material suppliers certain rights to file payment claims against that bond if they're not paid promptly. The procedures for filing a little Miller Act claim will depend on the state your project is in.
Waiting on money for a job?
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Private Projects
The way you protect a privately-owned project depends first on the state where the project is located. That state's laws will dictate how you secure your claim against an owner or GC that fails to pay you on time for your project work or supplies. Payment bonds are being used with increasing frequency, and where one is in place, your path to payment may begin by filing a claim against the bond.
The state's mechanics or construction lien laws will apply in many other cases. These vary widely from one state to another, which means just because you're familiar with the process in one state doesn't mean you can rely on the same process in another. Some of the differences that apply to state mechanics' lien laws include:
- Providing notice at the start. Several states require subcontractors and material suppliers to send the owner what is often called a preliminary notice before beginning work on the project or within a certain number of days of starting work (or of supplying materials) that tells the owner that the company is working on the project. Failure to follow this notice requirement can mean losing your mechanics' lien rights.
- Providing a notice at the finish. In some states, you must notify the owner within a fairly short period after you finish work on the job if you haven't been paid what you're owed. In others, you may be required to notify the owner of your intent to file a mechanics' lien before you can do so. In still other cases, you may choose to send a "notice of intent" to the owner even if you aren't required to do so, in the hopes that the notice will get your payment moving.
There are other differences between states in how you enforce your mechanics' lien rights.
National Lien & Bond Will Help You Get Paid
No matter what kind of project you're involved in, federal, state, public, or private, National Lien & Bond can help you get paid for work you've performed or materials you've supplied. We work with an experienced network of construction law attorneys in all 50 states to get our clients paid. We will work with you to develop in-house strategies to keep you on top of your project receivables and ensure you file the proper notices within the proper timeframes to maintain and enforce your rights.
Waiting on money for a job?
Tell us what happened and National Lien & Bond will connect you with an attorney in your state. Free consultation, no obligation.
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