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Bond Claim Notices

 

Overview of Bond Claim Notice (Miller’s and Little Miller’s Act)

A surety bond is comprised of a surety company (the “surety”) that guarantees to one party (the “obligee”) that a second party (the “principal”) will perform its obligation otherwise the surety will step in to honor the obligation. In a Miller Act or Little Miller Act Payment Bond, the general/prime contractor (the “principal”) purchases a surety bond to assure the property owner/public entity (the “obligee”) that payment will be made to the lower tier contractors and suppliers (the beneficiaries of the payment bond). If payment is not made, the surety and principal are liable for redering payment. The payment bond is very useful if the general/prime contractor or the person who hired you goes bankrupt.

For state or federal public work projects, contractors do not have the right to lien/foreclose against public property because a private citizen cannot own a public property and the government also has sovereign immunity. Therefore, there are state/federal laws that require the general contractor of a public works project to post a special payment bond to ensure that all lower tier contractors are paid. If they are not paid, they can file a claim against the payment bond for payment. Payment bonds may also be found on private projects; however, it is rarely used for private projects because of the unnecessary additional costs.

In order to have the right to make a claim, you may be required to serve a “Bond Claim Notice” a.k.a. Miller’s Act Notice and Little Miller’s Act Notice to the general/prime contractor and/or surety company. The payment bond notice requirements will vary depending on if it is a federal public works (“Miller’s Act”), a state public work (“Little Miller’s Act”), or a private works. Please click here for more information on the specific notice requirements for bond claims.

My Legal Depot will take the confusion out of preparing and serving your bond claim notices. Our experienced staff will research, prepare, and serve your notices promptly and accurately at a fraction of the cost of an attorney.

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