Public Works Projects
In this article, we'll explore the different types of
construction notices pertinent to public projects, providing guidance to
contractors seeking to protect their interests. Note that these are general guidelines and requirements vary
from state to state. If you have
specific questions about your state’s regulations, you should consult an
attorney.
Preliminary Notice
If you contract with private property owners, no doubt you
are familiar with preliminary notices or “pre-lien” notices sent out at the
beginning of projects. But do you need
to send them for public projects where the property owner is a public
agency? The answer is yes. Claimants who do not have a direct contract
with the contractor must send out a preliminary notice. A preliminary notice places the public entity
and direct contractor on notice in the event you need to give a stop payment
notice or assert a claim against a payment bond.
California Stop Payment Notice
In cases where payment disputes arise during a public
project, suppliers and subcontractors in California have the option to file a stop
payment notice. This is not an option for the general contractor. Upon receipt
of a stop payment notice, a public agency will withhold from the direct
contractor sufficient funds due or to become due to the direct contractor to
pay the claim stated in the Stop Payment Notice.
Payment Bond Claim
Public works projects often require general contractors to
secure payment bonds to protect subcontractors and suppliers against
non-payment. In the event of non-payment, subcontractors and suppliers can file
a claim against the payment bond to recover the amount owed.
Navigating public works projects in California requires
contractors to adhere to strict regulations regarding construction notices to
ensure timely and proper payment. While the nuances of these notices can be
complex, contractors can protect their interests by understanding the
requirements and deadlines associated with each type of notice. By staying
informed and proactive, contractors can mitigate the risks associated with
payment disputes and safeguard their financial interests in public projects.
Easy Law Construction Notices is not a law firm, and nothing in this article should be construed as legal advice. If you are seeking legal advice regarding construction matters, you can contact The Green Law Group, LLP, for a free initial consultation.