Some of our clients refer to us a Georgia Lien Lawyers. And, yes, we file a lot of materialmen’s liens throughout the State of Georgia; but that is only part of all that we do. Another area which keeps us very busy is the filing and prosecuting of payment bonds on behalf of clients. So, what the difference between a construction lien and a payment bond claim?
First, mechanics or materialmen’s liens may be filed by contractors, subcontractors and suppliers on private construction projects when they are not paid for their services. A private project is generally a construction project owned by an individual or a business entity (such as a corporation or an LLC). For more information on liens, check out our post on Georgia Lien Law.
When a supplier, subcontractor or contractor is not paid on a public project, a lien cannot be filed. But, they can probably make a claim against a payment bond. A payment bond, in simple terms, is an insurance contract between the governmental entity which owns the project or the prime contractor and the insurance company. This insurance policy basically promises to pay subcontractors and suppliers in the event that the governmental entity or the prime contractor do not! Here are some things to keep in mind regarding payment bond claims:
• Although the rules and requirements are very different than Georgia’s laws for filing materialmen’s liens, there are some similarities. One similar deadline, for example, is that payment bond claims must be made within ninety (90) days of the last date in which you worked on the project;
• Payment Bonds on Federal Government Projects are governed by federal law commonly referred to as “The Miller Act”; Payment Bonds on Georgia projects are governed by state law commonly referred to as “The Little Miller Act”; although federal and state law has many similarities, they are different laws and each must be met in order to effectively make a claim;
• If the governmental entity or the general contractor files a Notice of Commencement, then those who are not in privity of contract with either the project owner or the prime contractor must send a Notice to Owner and a Notice to Contractor (“NTO”) in order to preserve the right to file a Payment Bond Claim;
• Read the payment bond! Each payment bond has information which is very useful to the subcontractor and supplier and will set forth the requirements to make a claim against the payment bond and the deadline for filing a lawsuit against the bonding company in the event that a lawsuit become necessary;
• Navigating the rules to enforce your bond claim rights can be confusing and difficult; therefore, we encourage you to contact a Georgia Payment Bond Lawyer to assess your claim and help you get paid.
We would also like to point out that there are other, common types of Payment Bonds; some private construction projects also have payment bonds. We plan to discuss these in the near future. In the meantime, if you have any comments or questions, we’d enjoy hearing from you.