If you’re involved in Michigan’s public construction projects, understanding the ins and outs of bond claims is essential. Below are answers to frequently asked questions about Michigan’s public payment bond claims laws, so you can better navigate the process when you need to file a claim.
1. What Types of Public Projects Are Covered Under Michigan’s Payment Bond Claim Laws?
Michigan’s Little Miller Act applies to public projects involving the construction, alteration, or repair of public buildings or works with a total contract price of $50,000 or more. However, highway projects have slightly different requirements for making a claim against a payment bond.
2. Who is Protected Under Michigan’s Payment Bond Claim Laws?
Any party that furnished labor or materials to the prime contractor or a first-tier subcontractor can make a claim on Michigan’s public payment bond. This includes laborers and those who provide essential utilities such as water, gas, electricity, and equipment. However, the law does not extend protection to suppliers who supply other suppliers or parties lower than the third tier in the payment chain.
3. What is the Deadline for Making a Payment Bond Claim in Michigan?
- For most public projects, any claimant who didn’t contract directly with the general contractor must file a claim against the payment bond within 90 days from their last day of furnishing labor or materials.
- On highway projects, claims must be filed within 60 days after the claimant’s last day of furnishing labor or materials.
4. What Information Must Be Included in a Michigan Payment Bond Claim?
To file a claim under MCL §129.207, claimants must include the following information:
- The amount claimed (with substantial accuracy)
- The name of the party for whom labor was performed or materials were furnished
While this is the minimum requirement, it’s helpful to provide additional project details, including:
- Claimant’s contact information
- Public entity’s information
- Prime contractor and surety details
- Hiring party’s contact info
- Property description
- Labor and/or materials provided
- Total amount claimed (with substantial accuracy)
For highway projects, you must also include a statement that you intend to rely upon the bond, identify the project, and provide details of the labor/materials furnished.
5. Who Should Receive a Michigan Payment Bond Claim?
For most public projects, the claim must be sent to both the prime contractor and the government entity commissioning the project.
For highway projects, claims must be submitted in duplicate to the board of officers or agents contracting on behalf of the public entity, often the Michigan Department of Transportation. While not required, sending a copy of the claim to the surety can help expedite payment.
6. How Should a Michigan Payment Bond Claim Be Sent?
Bond claims should be sent by certified mail, with postage prepaid, to the necessary recipient at their business or residence address. Any method of delivery is acceptable as long as the intended parties receive the claim.
7. What is the Deadline to Initiate Suit for a Michigan Bond Claim?
To enforce a claim against a public payment bond, a lawsuit must be initiated at least 90 days after the claimant’s last day of furnishing labor/materials, but no later than one year from the date of the final payment to the prime contractor.
For highway projects, the suit must be initiated within one year of the project’s completion and acceptance.
Construction Bonding Specialists, LLC: Covering All Your Construction Bond Needs and More. Contact us today for your consultation at www.bondingspecialist.com/contact-us.
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At Construction Bonding Specialists, we work with new and experienced contractors to find the most satisfactory bond solutions. As a dedicated surety-bond-only agency with decades of bonding experience, we strive to discover surety solutions for all types of cases, ranging from routine to challenging. Contact us online or call us at 248-349-6227 to learn more.
Written by the Digital Marketing Team at Creative Programs & Systems: https://www.cpsmi.com/.