SUMMARY OF CONSTRUCTION CONTRACT DISPUTE REMEDIES

Introduction

The following are is a short summary of the statutory remedies (Mechanic's Lien, Stop Notice and bond claims) that are available in many construction disputes. The purpose of this outline is to provide a short, basic introduction to the primary remedies on private and public works of improvement. Feel free to contact any attorney in our Construction Contracts Group for specific questions.

Private works

A. Three Remedies

1.Mechanic's Lien

2.Stop Notice

3.Payment Bond

B. Steps To Perfect Mechanic's Lien and Stop Notice

1.Preliminary Notice/20 Day Notice/CPN

a.Send within 20 days of first delivery of labor, service, equipment or material to the jobsite

b.If no contract with the owner, send to:

(1)Owner

(2)Contractor

(3)Lender

c.If you are not "the contractor" and have a contractual relationship with the owner, then send the Preliminary

Notice to the lender

2.Record Lien and Serve Stop Notice

a.Record lien in county where real property is located

b.Serve Stop Notice on owner or Bonded Stop Notice on construction lender

c.Basic time limits

(1)No Notice of Completion (NOC): All persons have

90 days from completion

(2)NOC: Prime has 60 days, all others have 30 days

3.Lawsuit

a.Mechanic's Lien: Foreclose in 90 days

b.Stop Notice: No later than 90 days after period for filing liens expire

4.Step to Perfect Claim on Payment Bond

a.Serve 20 Day Notice

b.If no 20 Day Notice given, serve notice to surety and principal on bond within 30 days of NOC and if no NOC, then serve surety and bond principal within 75 days of completion

c.Suit: File within 6 months of completion

State public works

A. Two Remedies

1.Stop Notice

2.Bond

B. Steps to Perfect Stop Notice

1.Preliminary Notice/20 Day Notice/CPN

a.Only required of persons who do not have a direct contractual relationship with the contractor

b.Send within 20 days of first delivery

c.Send to public body and contractor.

2.Serve Stop Notice

a.Within 30 days of NOC

b.If no NOC, within 90 days of completion

c.NOTE: 30 day continuous cessation of labor deemed completion

C. Steps to Perfect Claim on Bond

1.20 Day Notice

a.Only required of persons who have no direct contractual relationship with the contractor

b.Send to public agency and original contractor

2.If claimant neglected to give 20 Day Notice, claimant may give notice to principal and surety on bond within 15 days of NOC and to surety and principal on bond within 75 days of completion if there is no NOC

3.Suit within 6 months of the expiration or the period for filing Stop Notice

Federal public works/the miller act

A. One Remedy: Bond

B. Steps to Perfect Claim on Bond

1.Preliminary Notice/90 Day Notice

a.Only required of persons who do not have a direct contractual relationship with the contractor

b.Given to the contractor within 90 days after the claimant furnished its last labor, service, equipment or material

2.Suit: One Year From Date Claimant Furnished its Last Labor, Services, Equipment or Material

CONCLUSION

The foregoing outline provides a brief overview of the primary remedies and the procedures for perfecting those remedies. All of the nuances that relate to said remedies are not set forth, just the basics. This short summary should prove useful to remind claimants of the basic steps and when they must be taken to preserve their rights.

<<< back