A subcontractor’s desired option for nonpayment is normally a mechanics lien. Mechanics liens accommodate a labor or material supplier to encumber the property in which project was done until getting paid. When not paid, there will be foreclose on the lien and bring about the sale of the property, so the payment due is done from the sale price.
Although this is an effective solution for private projects, laborers and suppliers will not be able to encumber federal property . The Miller Act was done to give another approach for such workers and to cut down the government’s liability in such projects.
The Miller Act means that prime contractors provide performance bonds and payment for government projects over $100, 000. This assures subcontractors have an extra insurance beyond the prime contractor. Subcontractors can certainly file claims on such bonds if they are not paid, typically no matter whether the prime contractor itself was paid.
A formal notice of claim is needed before a subcontractor will file a Miller Act Claim. When a subcontractor have a close relationship with the prime contractor, a notice of bond claim is not required before doing a Miller Act Claim.
For second-tier subcontractors and also material suppliers to first-tier contractors , an official notice of bond claim should be made within 90 days of the of the last date they furnished labor or materials to the project date materials or labor was provided . For both, a Miller Act claim need to be filed within 12 months of the last date material or labor was provided.
Usually there are some procedural difficulties to reduce. When filing a bond claim, a claimant should make sure to file in the area within which the project is situated. Each subcontractor who files a bond claim also needs to provide well-written notice of their claim to the prime contractor.
For the best solution of your Miller Act Claim and lawsuit, it is highly recommended to consult the attorneys at National Lien & Bond. They come with years of experiences with the bond companies to deal with payment disputes easily and they will always be ready to file the proper lawsuits on your behalf.