Construction parties working on public projects are not immune to payment disputes and delays. But unlike parties who work on commercial or residential properties, those who furnish materials and services for state-funded projects are not allowed to file a regular mechanics lien.
When a payment dispute arises, certain parties working on public works projects must file a bond claim. But before they can file a valid bond claim, they must first serve what is known as a Pre-Claim Notice in Washington.
This guide will explain everything you need to know about serving a Washington Pre-Claim Notice if you are working on a public-work project. Read on to understand what a Pre-Claim Notice does and the best practices that you should note so you can serve this very important notice properly.
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- What is a Public Pre-Claim Notice in Washington?
- Who must serve a Public Pre-Claim Notice in Washington?
- When to serve a Public Pre-Claim Notice in Washington
- What happens if you fail to serve a Public Pre-Claim Notice?
- How to serve a Washington Public Pre-Claim Notice
- Best Practices When Serving a Washington Public Pre-Claim Notice
What is a Public Pre-Claim Notice in Washington?
A Pre-Claim Notice works similarly to a preliminary notice for a mechanics lien. It is essentially a document that is served on the general contractor and the property owner to let them know that you have commenced working on a project and that you may make a claim on their bond if you don’t get rightfully paid for your services.
Unlike in private projects, public works projects require general contractors to obtain a bond with the government entity that ordered the job. Subcontractors and material suppliers working for the general contractor are able to make a claim against this bond in order to recover payment in case of payment disputes.
To make a valid bond claim, however, they must first serve the Pre-Claim Notice.
Who must serve a Public Pre-Claim Notice in Washington?
The following parties are mandated by law to serve a Public Pre-Claim Notice in Washington:
- Sub-tier subcontractors (those who are not in direct contact with the general contractor)
- Material suppliers (first-tier and lower)
Subcontractors who have a direct contractual relationship with a property owner do not have to serve a Public Pre-Claim Notice. Material suppliers of any tier must, however, submit this notice to the general contractor – the only exceptions are suppliers to material suppliers who, by default, are not allowed to make a claim against a contractor’s bond.
General contractors also need not serve this notice on the government entity that hired them. The purpose of a Pre-Claim Notice is to inform a general contractor of which parties are working on their project so they know which parties can make a payment bond claim if disputes arise.
When to serve a Public Pre-Claim Notice in Washington
The Public Pre-Claim Notice in Washington must be served within 10 days after the first rendering of service on a project.
What happens if you fail to serve a Public Pre-Claim Notice?
Failing to serve a Public Pre-Claim Notice on the general contractor and the owner or reputed owner is fatal to your right to have a claim to the contractor’s bond. If payment disputes come up and you do not receive your due compensation, you may not recover your payment from the contractor’s bond without providing a valid Pre-Claim Notice within the 10-day time frame.
How to serve a Washington Public Pre-Claim Notice
1. Prepare you Washington Public Pre-Claim Notice form
The Pre-Claim Notice must be in writing and should include the following details:
- Your name
- The names of the general contractor and the owner
- The name of the party to whom you are furnishing materials, supplies, and other construction services
- A statement saying that you have started delivering materials or supplies to the project
- A statement saying that the general contractor’s bond will be held for payment of those materials, supplies, and other construction services
These pieces of information and statements are fairly straightforward. You just have to watch out for common mistakes such as misspellings and other minor errors. Most parties also make the mistake of misrepresenting their business names, so always make sure that you write your full business name without dropping the proper suffix (e.g. Ltd., Inc., etc.).
2. Mail your Public Pre-Claim Notice to the general contractor and the owner
Once your Pre-Claim Notice is ready, you have to serve it on the general contractor and the owner via registered or certified mail. You may also deliver the Pre-Claim Notice in person but make sure to keep a signed acknowledgment receipt if you do so. It is always a good practice to keep documented proof of service, just in case your compliance to the Pre-Claim Notice requirement gets questioned.
Best Practices When Serving a Washington Public Pre-Claim Notice
1. Prepare and serve your Pre-Claim Notice form early
A good business practice when dealing with protecting your right to due payment is to comply with the rules and requirements promptly. Preparing a template for your Public Pre-Claim Notice and serving it way before the 10-day window closes will help ensure that your bond claim rights are protected.
Be aware that failing to serve this Pre-Claim Notice on time will cost you your right to make a payment bond claim, so try to submit this important notice as early as you can.
2. Ensure accuracy of the information included in the Washington Pre-Claim Notice
Not only must the Pre-Claim Notice be sent on time – it must also be prepared properly with all the correct details. Luckily the Pre-Claim Notice is fairly straightforward. You should have most of the information readily available (e.g. your name and the name of the party that hired you).
The key thing to remember is to make sure that you double-check all the details that you put on the Pre-Claim Notice and make sure that there are no factual or typo errors. It is always a good idea to verify your notice’s completeness in order to avoid potential issues.
3. Keep a “proof of delivery”
As with most construction notices, keeping a documented proof of service will not hurt. Serving your notice via certified mail with return receipt requested is one way to ensure that you have a receipt on hand. If you deliver the Pre-Claim Notice in person, you may ask the recipient to sign an acknowledgment receipt.
Keeping your documents tracked and organized is a good practice that will make managing your growing business easier.