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What Are Payment Bond Claims in Georgia?

Our law firm represents hundreds of contractors who have supplied either goods or services in the the construction of real estate. This video and article explain what you need to know about collecting money owed to you using payment bond claims.

On private jobs where the customer has yet to make payment, we recommend a Mechanics and Material-man’s Lien as the next course of action. However, you can not assert mechanics and material men’s liens on public property. Instead, the contractor must pursue payment bond claims.

Payment bonds are a collection remedy that involves four entities: claimant, principal, owner, and surety. In addition, the law requires payment bond claims on all projects that exceed a specific dollar amount.

The Parties of Payment Bond Claims

First, the claimant is the party that supplied the goods or services that the customer has not paid for. The principal is the general contractor who is managing the project. The owner is the owner of the questionable property. And finally, the surety is the insurance company that guarantees the general contractor’s performance on the job in exchange for premium payments.

The principal and the surety are liable to the unpaid contractor under the bond. The law calls this joint and several liability.

The Miller Act found in 40 USC Section 3131 governs payment bond claims on public projects.  In Georgia, two Little Miller Acts govern public projects involving state-owned property. Similarly, the State Miller Act, found in OCGA 131060, governs State projects. And finally, the Little Miller Act found in OCGA 369190 governs county and municipal public projects.  The requirements of these two acts are identical and are commonly referred to just as The Little Miller Acts.

Like mechanic’s liens, bond claims must adhere to the terms of the payment bond. This includes proceeding with the perfection of the bond claim suit within one year of the completion of the project. So, obtaining a copy of the payment bond is vital to review the terms.

Debt Collection Assistance

Having handled hundreds of payment bond claims, our office can help you find a copy of the bond as well as the perfection of the bond claim. However, the actual terms of the payment bond are mainly irrelevant to determining any payment bond coverage. The applicable payment bond statutes enacted in Georgia will overrule the bond’s provisions. So, contact one of our knowledgeable debt collection attorneys today to work on getting the money owed to you.