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Payment Bonds

By August 28, 2023May 6th, 2024No Comments

Working with other contractors can be a stressful process for subcontractors and material suppliers when it comes to getting paid.  In the current state of the economy, it is becoming more common to being made paid late and that can lead to a lot of frustration for everyone involved. Fortunately, there are ways that subcontractors and others who work with general contractors can protect themselves more fully from payment disputes. Among the best ways to do that is to confirm the general contractor has a payment bond.

What is a Payment Bond?

A payment bond is a guarantee that the material suppliers, subcontractors and laborers will be paid for their work, equipment or materials on the project. Because mechanics liens are not allowed on public projects, construction payment bonds are used for protection instead. 

Are Payment Bonds Used on Every Project?

While not every project requires construction payment bonds, most public projects do require them when a contractor is awarded a bid for that project. For private projects, bonds are generally only requested on large commercial projects. 

Who Can Recover From a Payment Bond?

The subcontractors, material suppliers and laborers working on the project are generally the ones who can recover from a payment bond. 

What are the Timing Deadlines on a Payment Bond?

There are several deadlines surrounding payment bonds in California. If you’re owed payment from a contractor, filing a preliminary notice prior to starting your work can help protect your rights. If you were not required to file that notice per the statute, then a Bond Notice needs to be served. That should be done within 15 days of the recorded notice of completion or 75 days if a no notice of completion was not recorded. Then you’ll generally have six months to bring your lawsuit.

Get the Legal Guidance You Need Today

Need legal guidance and support on a payment bond case? Get in touch with us today at Lanak & Hanna and let us help you recover under a payment bond. Don’t wait, as the deadlines can be short and there are specific notices that have to be filed. We’re here to protect your rights, and work toward a successful resolution for payment in your case.

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