Payment Bond Law
Overview
Payment bonds provide a definite source of funds to secure amounts owed on California projects in which they are available. All California public works projects involving an expenditure in excess of twenty-five thousand dollars must have a payment bond. (Civil Code § 9550.) Federal projects exceeding $100,000.00 also must have a payment bond. And often savvy owners on larger private projects also required the GC to secure a payment bond. But certain requirements must be to met before a party on a construction project is deemed eligible to recover from any payment bond in place. And proper deadlines
for asserting a payment bond claim and filing a lawsuit to enforce payment on the bond must be adhered to.
The payment bond claim attorneys at Flores Ryan LLP have expertise in every aspect of California payment bond claim law. We provide the legal expertise to ensure that amounts owed are recoverable from the payment bonds in place. Our extensive experience as payment bond claim attorneys allows us to advance payment bond claims strategically to maximize the likelihood of a rapid and substantial recovery.
ARTICLES
CSLB Citations
Getting back to the basics of how a CSLB Citation works, this article will provide an overview of what every contractor should know.
What You Need To Know About CSLB Complaints
This article covers the process of complaints and citations issued from the CSLB
California Contractors' License - The Basics
Contractors can learn the limits of what their specific license allows them to do and can learn how to properly maintain their license.
Mechanic's Lien, Stop Payment Notice, Or Bond Claim?
A comparison of statutory payment remedies and when some or all should be employed.
KEY POINTS
- All California public works projects involving an expenditure in excess of twenty-five thousand dollars must have a payment bond. (Civil Code § 9550.)
- Federal public works projects involving an expenditure in excess of one-hundred thousand dollars must have a payment bond.
- Subject to one exception, in order to include amounts owed for labor, services, and materials in a payment bond claim, preliminary notice (if required) must have been sent within 20 days of the first day that the labor, services, and materials in question were provided.
- Absent preliminary notice, a payment bond is valid if directly served upon the payment bond surety and direct/prime/general contractor within 15 days of a Notice of Completion, or within 75 days of actual completion. This is referred to as the saving mechanism.
- A second tier subcontractor whose first tier subcontractor has been paid by the direct contractor in full for all progress payments, less any monies disputed in good faith, is unable to utilize the 15 day and 75 day saving mechanism.
- A lawsuit to enforce a payment bond claim on a private project must be filed within 6 months of actual project completion.
- A lawsuit to enforce a payment bond claim on a public project must be filed within 6 months of the deadline to give stop payment notice. The deadline to give stop payment notice is either 90 days from actual completion or 30 days from a notice of completion. (Civil Code § 9558.)
FORMS
Below you can generate the following forms are applicable to Mechanic’s Liens:
- Preliminary Notice Generator
- Conditional Waiver & Release on Progress Payment Generator
- Unconditional Waiver & Release on Progress Payment Generator
- Conditional Waiver & Release on Final Payment Generator
- Unconditional Waiver & Release on Final Payment Generator
- Letter of Intent to Make a Payment Bond Claim