Dealing with payment disputes can be a pain. Fortunately, there are remedies available for construction parties that make sure they are able to recover payment from delinquent clients.
When working on a public project, you are protected by your state’s little Miller Act, which requires a general contractor to execute a payment bond that will secure the payment rights of lower-tier parties. Instead of filing a mechanics lien, you may make a payment bond claim if you find yourself in the middle of a problematic payment delay.
In Washington, parties looking to make a payment bond claim have to follow strict rules and requirements to make sure that they get paid. This guide answers your basic questions on how to make a valid payment bond claim in Washington.
Who can make a payment bond claim in Washington?
First-tier to second-tier subcontractors and material suppliers have the right to make a payment bond claim in Washington. The only notable exception consists of suppliers to suppliers who, unfortunately, are not allowed to recover payment by making a Washington payment bond claim.
Preliminary notice requirement for making a Washington payment bond claim
As with filing a mechanics lien, making a payment bond claim for public projects also requires potential claimants to serve a preliminary notice. In Washington, subcontractors and material suppliers must serve a Notice to Contractor to ensure that their bond claim rights are preserved.
Note that the Washington Notice to Contractor requirement applies to all potential claimants of a payment bond. Even if you have a direct contract with the general contractor, you must still serve this preliminary notice.
When must you serve a Washington Notice to Contractor?
A Notice to Contractor must be served within the first 10 days of working on a project. You may serve the Notice to Contractor on the general contractor via certified mail with return receipt requested. It is best practice to serve the Washington Notice to Contractor right on your very first day of work.
What information must be included in your Washington Notice to Contractor?
The following details must be written in your Washington Notice to Contractor form:
- Your name and address
- The name and address of the general contractor
- The name and address of the party who hired you if different from the general contractor
- A brief description of the services you are furnishing to the project
- A statement saying that you will make a payment bond claim if you do not receive the agreed payment for your services
There is no prescribed template for the Notice to Contractor in Washington. Your form should be sufficient as long as the details listed above are included and are written accurately.
When must you serve a Notice of Bond Claim in Washington?
Make a Washington payment bond claim within 30 days of the full completion of the project. The completion of the project is official when the work is officially accepted and signed off by the public entity who awarded the original contract.
Note that the Notice to Contractor, which is a preliminary notice, is not the same as the Notice of Bond Claim itself, which is the actual claim on the payment bond.
The Washington Notice to Contractor is simply a pre-claim notice that you serve in order to protect your lien rights. The Washington Notice of Bond Claim is served when a payment dispute has come up and you are looking at the payment bond to cover for your compensation.
It is very important that you serve the Washington Notice of Bond Claim on or before the 30th day after the acceptance of a project. Any payment bond claim made after this deadline will be considered invalid and will, therefore, not result in a successful recovery of payment.
How to make a payment bond claim in Washington
1. Request for payment bond information
The first step to take upon securing a contract in a public project is to write a formal request for information and serve it on the general contractor or the public entity who awarded the original contract.
When writing a formal written request for information, you must ask for a copy of the payment bond and other relevant information such as the name and address of the public entity awarding the project (if still unknown) and the name and address of the surety.
Having the contact details of the public entity in charge of the project as well as the surety will help you fulfill the succeeding steps easily.
2. Ensure that you have the right to make a payment bond claim
Ensuring that your bond claim rights are protected means serving the required Washington preliminary notice. Before you make a payment bond claim in Washington, you must ask yourself if you have served the Notice to Contractor within the first 10 days of working on a public project.
It is a good business practice to serve a preliminary notice right on your first day of work. By making it a habit to serve the Washington Notice to Contractor on the first day, you are reducing the risk of failing to serve the required preliminary notice and effectively forfeiting your bond claim rights altogether.
3. Prepare the Washington Notice of Bond Claim form
There is no prescribed template for the Washington Notice of Bond Claim form, but it generally must include the following details:
- Your name and address
- The name and address of the general contractor
- The name and address of the party who hired you
- A description of the services that you furnished to the project
- A description of the nature of the project, including the name of the public entity
- The amount you are claiming
Remember to make sure that all the names and descriptions that you write on your Washington Notice of Bond Claim form are correct and accurate. Always double-check your form for spelling mistakes and similar minor errors.
4. Serve the Washington Notice of Bond Claim on the required parties
When your payment bond claim form is ready, you have to serve it on the public entity who contracted the project. You should be able to have their full information, including the proper address if you successfully requested for those details as stated in step 1.
Note that you have until the 30th day since project completion to make a payment bond claim. Your Notice of Bond Claim form must be sent to the awarding public entity before this 30-day deadline elapses; otherwise, you revoke your payment bond claim rights for this specific project.
Also note that while the Washington Notice of Bond Claim is required to be served only on the awarding public entity, you may also serve a copy of it on the general contractor and the surety. The surety will usually verify the information that you include in your payment bond claim, so it is a good idea to be in touch with them directly.
Remember, however, that you may not bypass the awarding public entity – the Notice of Bond Claim must still be served on them by the deadline, even if you are already in contact with the surety.
5. Enforce the bond claim if payment is not released
After receiving your full payment, you do not have to proceed to this step. Enforcing the bond claim applies only if you do not get the payment that you are claiming before the validity of your bond claim expires.
In Washington, you have until 6 years after serving the Notice of Bond Claim to enforce the payment bond. However, this 6-year deadline applies only if there are no specific provisions listed in the payment bond itself. This is why it is best practice to secure a copy of the payment bond as this document will tell you what the exact expiration of the payment bond claim is, if any.
Note that enforcing a payment bond claim means initiating a lawsuit to recover payment from the surety. It is highly recommended that you secure the help of a legal counsel to successfully enforce a Washington payment bond claim.
Best practices when making a Washington payment bond claim
1. Write a written request for information upon securing a project contract
As soon as you secure a job for a public project, you must write a written request addressed to the general contractor or the public entity asking for a copy of the payment bond. The payment bond will have terms and provisions specific to the payment bond executed for a specific project, and knowing these details will make making a payment bond claim in Washington easier.
2. Serve the Washington Notice to Contractor on the first day of work
Note that all parties must serve a preliminary notice in Washington, and it is best practice to serve the Washington Notice to Contractor right on your first day of work. Prepare the Notice to Contractor form early, and you should have it ready as soon as you start working on a project. By serving the Notice to Contractor on your first day, you reduce the risk of failing to serve it altogether.
3. Do not forget to serve the Washington Notice of Bond Claim if payment disputes come up
Remember that the Notice to Contractor is only a preliminary notice. When payment disputes arise, you must make a payment bond claim by serving the awarding public entity a Washington Notice of Bond Claim. Construction professionals often make the mistake of assuming that the Notice to Contractor is sufficient to make a payment bond claim – this is wrong, so always remember that if you want to recover payment, you have to serve a Notice of Bond Claim.
Further reading