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No mechanic’s lien protection is available to claimants on public projects. The courts have historically concluded that public treasuries cannot be burdened with private payment disputes between those who furnish labor and materials to a construction project. The courts have determined as well that public buildings should not be exposed to the risk of foreclosure.
In the stead of mechanics’ lien claims, the federal government enacted the Miller Act, which required a contractor to furnish a payment bond for the protection of subcontractors. Similar laws were enacted by many states that are known as “little Miller Acts.” Payment bonds are not required but are commonly used on private projects as owners seek to avoid the expense and delay of payment disputes.
DSV construction lawyers bring significant expertise to the prosecution and defense of claims on surety bonds. The issues most commonly encountered on payment bond claims include: (1) claimants entitled to exercise the remedy; (2) notice and perfection requirements; (3) the priority of such remedies; (4) the waiver of such remedies; (5) the labor and materials that can be included in such claims; (6) enforcement requirements; (7) the limit of the payment bond obligation; (8) the duration of the bond obligation; and (9) the scope and coverage of the bond.
DSV lawyers regularly consult with a wide range of clients regarding these issues and provide a thorough evaluation of the strength and weakness of such claims, as well as the strategy for resolving such matters on a cost-effective basis.