Mechanics liens can only be filed against privately owned properties. If you are trying to recover payment from a government-funded project, your best bet is to make a payment bond claim pursuant to the Miller Act.
The Miller Act requires general contractors of publicly funded projects to provide a payment bond and a performance bond. This way, lower-tier contractors (e.g., subcontractors and material suppliers) may be able to recover their payment even if they are working in a municipal, state, or federal project.
There are also state-specific laws that cover payment recovery options for public construction projects. This guide focuses on the state of Delaware and how its construction participants can successfully recover payment through the Miller Act.
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- Who can serve a Miller Act Notice in Delaware?
- When is the deadline for making a payment bond claim in Delaware?
- How to make a payment bond claim in Delaware?
- Best practices for making a payment bond claim in Delaware
Who can serve a Miller Act Notice in Delaware?
Technically, Delaware does not require a Miller Act Notice to be served to make a payment bond claim. The bond claim requirements are determined by the surety from which the payment bond was secured by the general contractor.
Anyone other than the general contractor may make a payment bond claim in Delaware. General contractors are not allowed to make a claim against the bond that they themselves furnished.
Also note that since sureties determine the bond claim rules, they can decide whether lower-tier parties with no direct contract with the general contractor can make a bond claim or not. Payment bond terms in Delaware can therefore limit eligibility only to parties hired directly by the general contractor.
When is the deadline for making a payment bond claim in Delaware?
There are no general deadlines in Delaware for making a payment bond claim. The rules are determined based on the surety’s payment bond terms.
How to make a payment bond claim in Delaware?
Request for information at the beginning of a project
The first and most important step is to ask for information about the payment bond right at the beginning of a project. You can write a Request for Information and ask for the following details:
- The name of the surety
- The address of the surety
- A copy of the payment bond
Having a copy of the payment bond is very important. It will tell you all the relevant information, including your eligibility for making a payment bond claim as well as the bond claim process and deadlines.
Followed the rules specified in the payment bond terms
Generally speaking, parties making a Delaware payment bond claim are not required to serve any notice in order to make a bond claim. Project-specific bond terms determine specific requirements for how to go about the bond claim process.
However, parties making a bond claim can still choose to serve a Miller Act Notice on the surety. If you choose to do this optional step, you may include in your notice the following details:
- Your name and address
- The name and address of the general contractor
- The name of the public entity
- A description of the services you furnished to the project
- The amount being claimed
There are no set deadlines for when you must serve the notice in Delaware. You may generate and sign a Miller Act notice for Delaware on Handle.com.
Note, however, that Delaware has a specific law that says that the bond claim must be launched within 3 years of the date when the claimant last provided service to a project. This 3-year deadline may be reduced to 1 year if specified so in the payment bond terms.
Call the surety to follow up
Whenever you make a payment bond claim in Delaware, it is just as important to call the surety to follow up on the status of your claim. You can ask them if they need more information or if your claim has been approved or not.
Calling the surety is a proactive step that you can take so you can successfully recover your payment from a non-paying client in Delaware.
Best practices for making a payment bond claim in Delaware
Ask for payment bond information at the beginning of a project
It should be standard practice for you to serve a request for information every time you begin working on a project. You want to know who the surety is and what the payment bond terms are right away. If payment issues come up, you are better suited to recover your payment if you know the project-specific rules for making a Delaware bond claim.
Study the payment bond terms carefully
The rules for making a bond claim may vary depending on the surety that governs the payment bond. You should therefore pay closer attention to the payment bond terms and you must make sure that you understand the bond claim process. Once you get a copy of the payment bond, figure out if you are eligible and take note of the relevant deadlines.
Initiate a bond claim early
Delaware requires bond claims to be initiated within 3 years of the date when you last furnished services to a project. This time frame may be shortened depending on the project-specific payment bond terms. However, it is best practice to make a payment bond claim in Delaware early. Do not wait for the deadline before taking action, as you might end up missing it.