Payment Bond

A payment bond is a surety bond posted by a contractor to guarantee that his subcontractors and material suppliers on the project will be paid. They are required in contracts over $30,000 with the Federal Government and must be 100% of the contract value. They are often required in conjunction with performance bonds. There is no high-risk market available for performance and payment bonds. Up to the turn of the century bonding companies were approving everyone, even those who did not qualify for the bond type or size. During this time record loses occurred throughout the industry as many companies closed their doors.
Posts about Payment Bond
  • QUICK NOTE: NOTICE OF CONTEST OF CLAIM AGAINST PAYMENT BOND

    … On private jobs where the general contractor has an unconditional payment bond, subcontractors, sub-subcontractors and suppliers need to serve a notice of nonpayment to preserve payment bond rights. Just like an owner can record a Notice of Contest of Lien to shorten a lienor’s statute of limitations to foreclose the lien to 60 days…

    Florida Construction Legal Updates- 10 readers -
  • SUBCONTRACTOR’S MILLER ACT PAYMENT BOND CLAIM

    … Since I wrote my ebook on the application of federal Miller Act payment bonds, I have not discussed a case applying the Miller Act. Until now! Below is a case that reinforces two important points applicable to Miller Act payment bond claims. First, the case reinforces what a claimant needs to prove to establish a Miller Act payment bond…

    Florida Construction Legal Updates- 14 readers -
  • MILLER ACT AND “PUBLIC WORK OF THE FEDERAL GOVERNMENT”

    … The Miller Act applies to the “construction, alteration, or repair of any public building or public work of the Federal Government.” 40 U.S.C. s. 3131. A recent opinion out of the Northern District of Oklahoma sheds light on what the Miller Act means regarding its application to any public work of the Federal Government. See U.S. v. Bronze…

    Florida Construction Legal Updates- 15 readers -
  • QUICK NOTE: SUBCONTRACT PAYMENT BOND = COMMON LAW PAYMENT BOND

    … What is a common law payment bond? A common law payment bond is a bond not required or governed by a statute. For example, if a prime contractor provides the owner a payment bond, that bond will be a statutory payment bond. On the other hand, if a subcontractor provides the general contractor with a payment bond, that bond will be a common law…

    Florida Construction Legal Updates- 13 readers -
  • MILLER ACT PAYMENT BONDS

    … Do you do work on federal construction projects? Are you familiar with the Miller Act? Below is a portion of a recent presentation on Miller Act payment bonds. Download (PPTX, 120KB) Please contact David Adelstein at dma@katzbarron.com or (954) 522-3636 if you have questions or would like more information regarding this article. You can…

    Florida Construction Legal Updates- 9 readers -
  • DURATION OF PUBLIC PAYMENT BOND = FULL TERM OF PUBLIC CONTRACT

    … performing base contract work, the public payment bond is still in effect to secure any potential nonpayment. Please contact David Adelstein at dma@kirwinnorris.com or (954) 759-0026 or (407) 740-6600 if you have questions or would like more information regarding payment bonds. You can follow David Adelstein on Twitter @DavidAdelstein1 and Facebook at Florida Construction Legal Updates. …

    Florida Construction Legal Updates- 12 readers -
  • DRAFTING THE BOND FORM, PARTICULARLY THE PERFORMANCE BOND FORM

    … Oftentimes, when it comes to payment and performance bonds (in particular) the bond forms are drafted by the obligee. For example, an owner (as the obligee) may draft the bond forms that it wants its general contractor’s surety to execute. And, a general contractor (as the obligee) may draft the bond form that it wants its subcontractors…

    Florida Construction Legal Updates- 11 readers -
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