Ever get that sinking feeling on a public project that you might not get paid? The good news is that in Nebraska, general contractors working on a project in excess of $15,000, must file a bond on the project. This blog will address how to make a proper claim on the bond.
The process for making a bond claim is found in section 52-118.01 Neb.Rev.Stat. The process and time frame for your claim will depend on your status as a subcontractor or sub-subcontractor.
Notice to General Contractor
If you have contracted with a subcontractor, you must provide notice of your intention to file a claim on the bond with the general contractor within 4 months of last performing work or providing materials to the project. This notice must include the date you last performed labor or provided materials to the project; the amount owed and the name of entity with which you contracted. The notice must be sent by registered or certified mail, or personally served on the general contractor. Although not required by statute, it’s a good idea to provide this notice to the bonding company too.
If you contracted with the general contractor, you do not need to provide notice of your intent to file a claim.
Filing a Lawsuit
If you are a subcontractor, once you serve your notice on the general contractor, you may file your lawsuit. If you contracted with the general contractor, you must wait at least 90 days after your last payment was due before filing suit. A lawsuit must be filed within 1 year of the public entity finally settling the contract. Final settlement is not a defined term, so keep in mind that final settlement does not mean final payment. The safer approach is to file suit within one year of the engineer or architect informing the governmental entity that the project is complete. Depending on the project, this could be at a City or County Board meeting or notice to the public entity.
Take Away: Filing a claim on a bond can be tricky and you only get one swing at the pitch. Make sure to work with an experienced Nebraska construction attorney when you are considering filing a bond claim.