Here's How You Can Protect Your Business

Disputes and Lawsuits: When Does it Make Sense to File?

All too often, our Portland contractor lawyers hear stories of contractors that were denied payment but never took legal action because they feared that the cost of legal fees would undo any headway made on a payment dispute. While this is a reasonable assumption, depending on which law firm you choose to work with, your experience could differ drastically.

For instance, when you partner with a Portland contractor lawyer from Cotney Construction Law, they can help you get paid, regardless of how much you are owed. In fact, our lawyers will advise you on the best method for procuring payment while maintaining or even improving your bottom line. If litigation isn’t necessary to resolve your dispute, we can use various non-legal methods that have a proven track record of efficacy for helping contractors, subcontractors, and suppliers obtain the money they worked hard to earn. 

When it comes to disputes and lawsuits, most contractors aren’t sure when they should back-off or heap on the pressure, which is why our Portland contractor lawyers have provided some useful tips in this article.

$10,000 or Less: the Demand Letter

When it comes to claims valued at $10,000 or less, it doesn’t hurt to send a strongly worded demand letter before you pull out the “big guns.” This is an especially effective tactic when a Portland contractor lawyer drafts your demand letter on legal letterhead and sends it on your behalf. When the entity that owes you money sees this letter, they will understand that, although this letter is a warning, it’s a sign of more severe legal action on the horizon. Nobody wants to receive a demand letter because it affirms the fact that the party they’ve wronged isn’t going to be walked all over. In most cases, a demand letter is sufficient for procuring payment, and it has the benefit of reduced legal fees, which helps your business save money.

$25,000 or More: the Lawsuit

For claims valued at more than $25,000, filing a lawsuit may be your best option for getting paid. It’s important to understand that unless you partnered with a Portland contractor lawyer in advance and had them integrate an “attorney’s fee” clause into your contract you may still be responsible for paying attorney’s fees even after prevailing in court. On average, legal fees cost about $15,000 in construction-related disputes, so ensuring that the other party is responsible for this expense is essential to protecting your bottom line. However, there are other options to consider before litigation, such as alternative dispute resolution (ADR) methods like mediation and arbitration. These processes can be used in place of traditional litigation and are oftentimes more cost-effective, but you should leave it to your Portland contractor lawyer to determine the best course of action for your business.

Remember, you can protect yourself and create some breathing room when a dispute does arise by investing in a partnership with one of our Portland contractor lawyers before a substantial dispute materializes.

If you would like to speak with one of our Portland contractor lawyers, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

In the construction industry, contracts are singularly responsible for ensuring that all parties meet their obligations for performance and payment. Whether you’re a contractor, subcontractor, or supplier, the work you perform and the materials you supply will be determined by the terms and conditions contained within your contract. Working without a contract is foolish and offers you no protections for nonpayment. Signing a contract that you didn’t read is equally foolish. For all you know, you could be signing away your right to seek legal recourse for nonpayment… or worse.

In this article, a construction lawyer in Wilmington, NC, from Cotney Construction Law will discuss why you should read the entire contract before signing, and if not you, a lawyer with years of experience representing contractors. This is the only surefire way to avoid the types of contractual disputes that lead to costly claims, lost time, and severed ties.

Long, Redundant, and Necessary

How often do shortcuts work out for contractors in the construction industry? Not often. Generally, when contractors attempt to speed up construction by eliminating what they view as “unnecessary” tasks, it leads to defective work. The same principle applies to reviewing contracts. If you fail to commit the appropriate amount of time and attention to your contracts, you’ll end up with a contract full of holes and opportunities for failure. This is where the talents of a construction attorney in Wilmington, NC, come into play. An attorney can handle those long and redundant contracts that have you falling asleep by page two. With a trained eye looking out for risky clauses, you can rest assured that your contract is written to protect your best interests.

Common Clauses That Contractors Overlook

Construction contracts are littered with potential risks. Every contract is a veritable minefield of disputes waiting to happen, and it’s the duty of a contractor attorney in Wilmington, NC, to play the role of minesweeper. Your attorney can scrutinize text related to change orders to ensure that a clear process is in place that won’t hold your business financially responsible when the owner changes their mind about some aspect of a project. Your attorney can also seek out indemnity clauses that force you to hold the owner harmless when their negligence affects the project negatively. These types of clauses were recently rendered unenforceable in North Carolina, but it’s still important to recognize when an owner is attempting to use one against you. This can reveal a lot about an owner and their intentions.

So, are you reading your entire contract? There’s a good chance you aren’t paying close enough attention to the nuanced legal minutiae that can get you into trouble, but should you be expected to? A contractor’s job is to provide quality building services, not file through the technicalities of contract law. Let a contractor lawyer in Wilmington, NC, review your contracts, so you can enjoy the sustained success of the business you worked hard to grow.

If you would like to speak with a contractor lawyer in Wilmington, NC, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

Defects are common in the construction industry, but the majority of these defects are insignificant and have little impact on the safety, structural integrity, or usability of a completed structure. After all, we don’t raise the alarm every time a driveway forms veins or hydrostatic pressure creates minor settlement cracks. That said, not all defects are minor, and significant construction defects can lead to costly legal issues for your business.

In this brief article, an experienced Nashville construction law attorney will discuss three types of defects that can have costly financial implications for contractors, subcontractors, and suppliers. If you have been targeted with a construction defect claim, consult an attorney from our Nashville construction law firm to protect your reputation and assets.

Design Defects

When an architect or other design professional creates an inherently flawed or defective design plan, it can result in significant defects. Typically, design defects are the result of error or omission. Both of these issues can be fixed, but depending on the stage of construction and the cost implications, there may not be a viable option for fixing the problem. When this happens, a construction defect claim may be issued to resolve the damages incurred by the owner as a result of the defective design. If the design defect is the result of omission, it can be remedied through the use of a change order that alters the scope of work to include any additional construction required for successful project completion. An attorney from our Nashville construction law firm can help prove that you were not responsible for this defect as design plans are developed by architects and engineers.

Material Defects

Material defects occur when subpar, defective, or unsuitable building materials are used during the construction process. Oftentimes, a supplier or manufacturer will provide materials to a project only to discover later that the materials were defective. Sometimes, this realization occurs during the project timeline. In other instances, it occurs after a project has been completed. This can lead to a potential nightmare for contractors that must then furnish provisions of labor and materials to complete the project. The entity that ends up paying for these defects will more than likely want to be reimbursed by the supplier or manufacturer of the defective materials, and a Nashville construction law attorney can help.

Workmanship Defects

Last but definitely not least, workmanship defects are the most fear-inducing type of defect for contractors because they indicate that the contractor has failed to perform their job adequately. One example of a scenario involving workmanship defects would be a contractor that fails to follow the design plan when building out the first floor of a three-story hotel. Later, the hotel’s structural integrity is brought into question. Suddenly, it’s time to gauge which party is most at fault. Was it the contractor? One of the subcontractors? A Nashville construction law attorney can help build a case that proves you weren’t liable.

If you would like to speak with an attorney from our Nashville construction law firm, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

The Eighth Annual Arcadis Global Construction Disputes Report 2018 revealed a shocking statistic related to construction disputes that should put all contractors on high alert: the average cost of construction disputes in North America was $19 million.

Even more shocking is the fact that this figure was actually an improvement over past years. The cost of disputes in the construction industry is exorbitant, and the majority of construction businesses are not prepared to incur these costs. Can your business afford to pay $19 million in disputes? There’s a good chance that it can’t, which is why partnering with a Nashville contractor attorney before becoming embroiled in a dispute is essential if you want your business to stay active and profitable.

Balancing Time and Cost Considerations Reveals a Grim Truth for Contractors

Even though the average cost of construction disputes technically dropped, this statistic is somewhat misleading when you consider another one of Arcadis’ findings: the time required to resolve construction disputes increased by two whole months. That means construction disputes remain unresolved for 17.7 months on average. That’s a significant amount of time to sideline a project while you resolve a dispute. Entire projects can be planned, funded, and completed in this time. When you get locked into a dispute with an owner, your efficiency and profitability will take a not-so-subtle hit as a result of these time implications.

Our Nashville Contractor Attorneys Can Help You Avoid the Number One Cause of Disputes

Did you know that the primary cause of construction disputes is errors and omissions in contracts? Too often, we find that contractors and subcontractors alike assume they are getting a fair deal when offered the chance to take part in a project. Later on, they discover that their negligence has consequences as they’re being asked to provide labor that falls outside of what they understood to be the scope of work, or payment is withheld because a “pay-if-paid” clause was written into the contract. This is completely avoidable when an experienced Nashville contractor attorney reviews your contracts before you sign.

Resolving Disputes the Affordable Way

When owners, contractors, subcontractors, and suppliers all act in good faith, profits can skyrocket and all parties are satisfied. When even one of these parties decides to act in a deceitful manner, it can lead to a negative experience across the board. There are several types of dispute resolution methods that can be employed to move on from a dispute, but the cost, time, and efficacy of these processes varies on a case-by-case basis. According to Arcadis, 82 percent of disputes are settled with an alternative dispute resolution (ADR) method rather than litigation. This is because the cost of processes like mediation and arbitration tend to be less expensive and more private. However, there are some conflicts that are best handled with litigation. Our Nashville contractor attorneys can help you make an informed decision about which dispute resolution methods are most applicable to your business.

If you would like to speak with one of our Nashville contractor attorneys, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

A well-written construction contract can be the deciding factor between a smoothly run project and a contractor’s worst nightmare. Your construction contract is more than a breakdown of the work to be performed, the time frame in which it is to be completed, and the various details governing payment; it’s also a document that designates liability. Because of this, contractors that neglect to have their contracts reviewed in advance by a Greensboro contractor attorney may find themselves being unfairly burdened with extra costs stemming from the owner’s negligence.

In this article, we will discuss how Cotney Construction Law’s Greensboro contract review services can help a contractor allocate risk away from their business. Whether it’s unfair time constraints, insufficient funding, or forced indemnity, our attorneys have the expertise and experience to ensure that your contracts are drafted to protect your business from harm.

Common Sources of Risk on Contracts

When you partner with a Greensboro contractor lawyer, they can help you minimize contractual risks related to time, design issues, acts of God, funding, regulatory risk, unexpected conditions, and indemnity. 

Time: delayed project completion can lead to additional costs for contractors and owners.

Design Defects: design defects can occur for a number of reasons, but one party must ultimately be responsible.

Acts of God: severe storms can lead to delays and damages. A contractor can’t control the weather, so they shouldn’t be left footing the bill.

Funding: delays are inevitable when funds stop flowing into a project.

Regulatory Risk: if the government intervenes and requests changes to design or performance of a project, the contractor shouldn’t be responsible for any additional costs incurred.

Unexpected Conditions: bad soil or other unexpected conditions can have a tremendous effect on your ability to complete a project.

Third-Party Indemnity: determining which party is responsible for damages stemming from the negligence of third parties can be especially troublesome in the construction industry.

Construction Contract Review in Greensboro

Every contractor, subcontractor, and supplier can benefit from construction contract review in Greensboro. At Cotney Construction Law, our Greensboro construction law lawyers can review your contracts to ensure that you are protected from unfair risk allocation. 

If you would like to speak with one of our Greensboro construction law lawyers, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

As a contractor, there are two types of meetings involving owners that will have a significant effect on the success of your project. The first type occurs when you meet with an owner to sign a contract. This is an integral part of the construction process and lays the groundwork for all things to come. An ironclad contract that has been reviewed and verified by a Birmingham contractor attorney can help you avoid the lion’s share of disputes that tend to arise when millions or even billions of dollars are on the line. When both parties are satisfied with the contract, you might never have to attend the second type of meeting, which involves both parties congregating in a court of law to assert their respective positions in a contract-related dispute.

However, you don’t want to be caught unprepared in the event that a dispute can only be resolved through litigation with the help of a Birmingham contractor attorney. By partnering with an attorney, investing in a construction law subscription plan, and being proactive about preventing disputes, contractors can greatly reduce the financial burden of construction litigation.

1. Get Help From a Birmingham Contractor Attorney

Contractors have the knowledge, bandwidth, and skill set to perform a wide range of complicated construction-related duties, but none of these characteristics are necessarily helpful for winning a dispute in a court of law or outright preventing a dispute from occurring in the first place. Fortunately, our Birmingham contractor attorneys can assist contractors with all of their construction-related legal needs, including contract review, lien law, and employment law. When it comes to litigation and other construction-related legal matters, getting things right the first time can save contractors a substantial amount of time and money. For instance, improperly filing a mechanic’s lien could result in the loss of lien rights and, with it, the compensation you are owed. 

2. Invest in a Construction Law Subscription Plan

Once you hire an attorney, you want to ensure that you’re getting the most bang for your buck. Some law firms rely on outdated retainer models to provide your business with access to on-demand legal services. At Cotney Construction Law, we’ve deployed an innovative subscription plan model to help you reduce the cost of litigation and save on important legal services. These subscription plans are designed to provide you with the legal services you need most for one low monthly rate. The benefits are twofold:

  1. Contractors can save on legal services that help them avoid litigation.
  2. Contractors can save on litigation with deductions on standard hourly rates.

With options ranging from $499 to $4999 per month, contractors at every level can benefit from a subscription plan with Cotney Construction Law.

3. Take a Proactive Approach to Preventing Disputes

Disputes will always occur in the construction industry, but you don’t have to let your business be a victim. Contractors that work diligently to prevent disputes can reduce the cost of litigation by simplifying and solving problems before they hit a tipping point. The more complex the issue, the more expensive litigation will likely be to reach a verdict. Therefore, you want to prevent disputes when possible, and minimize the severity of disputes that do arise. By doing so, you can reduce the cost of construction litigation.

If you would like to speak with one of our Birmingham contractor attorneys, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

When it comes to resolving disputes in the construction industry, there’s a lot of conflicting information about which process is the “best.” Let’s be clear, each and every type of dispute resolution has pros and cons, whether it’s litigation, arbitration, mediation, or something else entirely. During your career as a contractor, you’ll more than likely take part in several types of dispute resolution methods, which is important because you need to get familiar — construction disputes are extremely common. 

In this editorial, a Nashville construction dispute lawyer will be discussing one type of dispute resolution method in particular: arbitration. More specifically, we’re going to help dispel some common myths that cause contractors to seek out other forms of dispute resolution when arbitration could offer the most compelling benefits. During our deep dive, we’ll examine a bevy of statistics from the American Arbitration Association (AAA), a not-for-profit organization with the goal of improving ethical standards, fairness, and impartiality in alternative dispute resolution (ADR) proceedings.

The lawyers at our Nashville construction law firm are well-versed in ADR and can represent contractors during the arbitration process. With our help, you can decrease the amount of time and money you spend resolving disputes, so you can get back to work on the project site.

Myth: Arbitration Is as Time-Consuming as Litigation

On average, arbitration cases take significantly less time to resolve than litigation cases. Federal court statistics show that the median length of a trial for civil cases is approximately 27.2 months. In other words, disputes take upwards of two years to resolve. By comparison, arbitration cases administered by the AAA averaged 232 days in length, or around eight months. There’s a positive correlation between the amount of time it takes to resolve a case and the amount of money tied to a claim or counterclaim, so the more money is at stake, the longer it’s going to take to resolve your dispute. The following figures compare claim value and case duration to help illustrate this point:

  • Claims/Counterclaims < $100,000 — 146 Days
  • Claims/Counterclaims > $500,000 — 482 Days
  • Claims/Counterclaims > $1,000,000 — 509 Days
  • Claims/Counterclaims > $5,000,000 — 642 Days
  • Claims/Counterclaims > $10,000,000 — 657 Days

Myth: Arbitration Costs More Than Litigation

In the construction industry, keeping costs low is integral to maintaining profitability. Therefore, contractors are often keen to utilize the most fairly priced dispute resolution method at their disposal. For contractors who require a binding verdict, options are limited to arbitration and litigation, but which is more affordable?

It varies on a case-by-case basis, but many contractors find that the lack of unlimited discovery and other judicial procedures helps arbitration proceed more quickly. Arbitration utilizes a limited discovery process that involves significantly fewer document exchanges and depositions. The less time you spend resolving a dispute, the less it will cost you. For this reason alone, arbitration is oftentimes a less expensive option. Other problems inherent to litigation are the lack of privacy and scheduling autonomy. When you consult a Nashville construction dispute lawyer, they can help you decide whether litigation or arbitration is the best option to handle your dispute.

If you would like to speak with a Nashville construction dispute attorney, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

The Regional Center EB-5 Program is a pilot program created in 1993 to increase foreign investment interest for large scale projects after the Direct EB-5 Program requirements proved to be unable to support larger scale investments. The program was created to further help stimulate foreign investment in the U.S. economy with the creation of “regional centers” to pool investment for larger scale projects. As a pilot program, it is a temporary program that requires reauthorization every so often by Congress. The Regional Center EB-5 Program has become immensely popular and has overtaken the permanent Direct EB-5 Program as the primary vehicle for EB-5 investment in the U.S.

The Regional Center EB-5 Program and the Direct EB-5 Program have the same requirements:

  1. Invest
  2. Create jobs
  3. Manage the business
  4. Invest in a new commercial enterprise

Investment Amount
The EB-5 Program created two minimum investment amounts. The default investment amount is $1,000,000 USD. If the immigrant is investing what is deemed a Targeted Employment Area (TEA), the minimum investment amount is $500,000 USD. The most common form of investment is the investment of cash into the business. Regardless of the type of investment, any investment under the EB-5 program must come from legal sources and the immigrant must be able to document this.

Job Creation
Job creation is essential to the purpose behind the EB-5 Program. For EB-5s, a minimum of 10 full-time jobs must be created by the investment.

Management of the and Investment in a New Commercial Enterprise
Another requirement for the EB-5 classification is for the investor to engage in the management of the business by either having day-to-day managerial responsibility or through policy formation activities. EB-5s require the investment into a new commercial enterprise. This means is that the business entity invested into needs to have been created after November 29, 1990 unless certain exceptions apply.

So, Why Invest in A Regional Center for the EB-5?
Choosing the Regional Center EB-5 program has several advantages over the Direct EB-5 program, particularly when it comes to the investment amount and the job creation requirements for an EB-5. While the same investment requirements apply to both direct EB-5s and regional centers EB-5s, most regional centers associate with projects that are located within TEAs. As a result, the investment amount for the investor through a regional center would be $500,000 USD, instead of $1,000,000 USD.

Similarly, while the same job creation requirements apply to both direct EB-5s and regional center EB-5s, regional centers can count indirect jobs created by the investment in its job creation calculation. This is important for two reasons. First, and most importantly, it expands the number of jobs that can be calculated into the job creation calculation, which makes it easier to meet this requirement. Regional centers use economists to forecast the number of jobs created by a project and utilize that forecast to make certain that only the proper number of EB-5 opportunities are offered, ensuring that each individual EB-5 can meet the job creation requirement. With a regional center, there should be no question about job creation. Second, it allows for the investment in more robust projects because the project can attract multiple EB-5 investors due to the inclusion of indirect jobs while maintaining the EB-5 job creation requirements per investor—something that proves to be difficult under a direct EB-5. For the foreign investor, by investing in a regional center, the investor can potentially be part of mega development projects, such as professional soccer stadiums and major hotels.

When it comes to management of the enterprise, the EB-5 requirements state that the investor must either have day-to-day managerial responsibility or engage in policy formation activities. Typically, for direct EB-5s, the investor will have a hands-on investment. On the other hand, most regional centers will have the investors engage in minimal policy formation activities, as allowed by law. In this case, most of the management of the project is handled by a management company. This results in as close to a passive investment as legally possible, although in practical terms, the investment is essentially a passive one.

Another potential advantage for investing through a regional center as opposed to direct investment is the “pre-approval” of the project meeting the EB-5 requirements by USCIS. Most regional centers seek “pre-approval” for their projects by filing a Form I-924, Application for Regional Center Designation Under the Immigrant Investor Program. While not required for each project, the filing of the form helps in two ways. First, it gives the regional center a “pre-approval” of its project, if the form is approved, because the form requires for the requirements of the EB-5 for investors to be established. An approval establishes that the project is a viable EB-5 option. This determination can be made prior to obtaining EB-5 investors so that it can be used to attract EB-5 investors and ensure the project’s viability. Second, if a regional center has an approved I-924, USCIS generally approves the EB-5 petition from the investor. The only exception to this is the investor’s source of funds. This has nothing to do with the regional center or its project and could lead to the denial of the investor’s petition, if this requirement is not satisfied.

At the end of the day, a regional center can provide an investor with a much easier path to an EB-5 green card. There are several advantages to investing in a regional center as opposed to undertaking a direct EB-5 investment. These advantages include lower investment amounts, limited involvement and “pre-approval” of the project by USCIS. However, not all regional centers can provide this advantage because not all regional centers are created equal. While an immigration attorney will not provide investment advice, an immigration attorney can evaluate a regional center to determine whether a regional center’s project meets the requirements for an EB-5. It is important to consult an immigration attorney with experience in regional center EB-5 cases before making an investment.

Attorney Paul Messina focuses his practice on all aspects of employment-based, investor-based and family-based immigration law. He has extensive experience in proceedings before United States Citizenship and Immigration Services (USCIS) and the Consular Section of the United States Department of State. He has handled a variety of immigration cases, including employment-based green cards, EB-5 investment-based green cards (direct and through regional centers), and many of the non-immigrant visa/status categories as well as family-based green cards.

Author’s note: The Immigration Corner presents current and relevant topics in immigration law. The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

In part one of this two-part series covering the Miller Act, a Raleigh contractor attorney from Cotney Construction Law discussed the first two steps that all subcontractors must follow to file a successful claim: 

  1. Delivering the Miller Act notice to the general contractor
  2. Contacting the surety to check-in on the status of your claim

Now, we will discuss the final two steps of this process, which includes submitting a sworn claim form to the surety and enforcing your Miller Act claim. Remember, for all of your construction-related legal needs, including services pertaining to the Miller Act, payment bonds, performance bonds, and more, consult an attorney from our Raleigh construction law firm.

Submit a Backup and Sworn Claim Form to the Surety

As we mentioned in part one, the general contractor has a legal obligation to inform subcontractors which surety they are bonded through. Once the subcontractor is privy to this information, they can reach out to the surety for a claim form. You will also be tasked with providing certain backup information like copies of your contract, invoices, emails, communications, change orders, purchase orders, shipping confirmations, and more. Once you collect this information and return it to the surety, they will review your claim. You must also complete a sworn claim form, which must be signed and notarized. Once all of this information has been submitted, it will take between 30-45 days to reach a decision.

Get Paid or Enforce Your Claim

Finally, it’s time to get paid (if the surety accepts your claim). If they agree, you will be required to submit a lien release and waiver before you can be paid. This is to prevent a subcontractor from attempting to “double up” on a claim. In addition, they may request a “Miller Act Claim Cancellation.” This document cancels the claim after your reimbursement is satisfied. Rejected claims must be enforced to proceed. This is accomplished by filing a lawsuit enforcing the Miller Act claim. Subcontractors can work with a Raleigh contractor attorney to file their claim at a federal district court in the same jurisdiction the project is located in. This process can be confusing, so it’s highly recommended that you withhold taking any action before contacting a Raleigh construction law firm. This lawsuit has to be enforced within one year from your final provision of labor or materials; otherwise, it will be not be enforceable.

If you would like to speak with a Raleigh contractor lawyer, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

When subcontractors and suppliers are contracted to take part in federal projects, the Miller Act is the law that ensures they get paid. This law applies to all federal construction projects that result in the improvement of real property, and although it was passed in 1935, the Miller Act still plays a fundamental role in a wide range of public works projects today.

The Miller Act mandates that any general contractor that wishes to perform construction, alteration, or repair on a federally owned structure first provide a payment bond and a performance bond to the government. This helps ensure that all work is completed according to the terms and conditions of the contract. Furthermore, it forces general contractors to pay their subcontractors and suppliers in a reasonable amount of time. As a subcontractor or a supplier, it’s easy to see how the Miller Act can benefit your business. However, it’s important to keep in mind that the Miller Act doesn’t protect you if you are a subcontractor lower than the second tier. 

As we will discuss in this two-part series, if you believe that your Miller Act rights have been violated, a Raleigh construction lawyer can help you make a payment claim. General contractors that need assistance with Miller Act compliance can also benefit from a partnership with a lawyer who is experienced handling Raleigh construction bond cases.

Delivering the Miller Act Notice to the General Contractor

In order for a subcontractor to make a Miller Act claim, they must first deliver a payment claim notice to the general contractor. This notice informs the general contractor of your intention to pursue a claim under the Miller Act. If you contracted directly with the general contractor, this notice can be furnished at any time; but if you didn’t, you only have 90 days to deliver your notice by the preferred method (certified mail with return receipt requested) or another method that facilitates written, third-party confirmation of delivery. A Raleigh construction lawyer can ensure that your notice includes accurate information regarding the amount of the claim as well as the identity of the party that services were provided to.

Contact the Surety

Once you deliver the notice to the general contractor, you’ll want to contact the surety to obtain a response pertaining to your case. This is because the general contractor is responsible for forwarding the notice to the surety. Some subcontractors prefer to send a Miller Act claim to both the general contractor and the surety at the same time. This puts more eyes on your claim and helps it move along more quickly. If you aren’t sure which bonding company you need to get in contact with, the general contractor is obligated to provide this information under the Miller Act.

To learn more about the process for making a Miller Act claim, read part two.

If you would like to speak with a Raleigh construction attorney, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.