Last week we discussed the groundwork and circumstances of a construction claim. This week’s post will discuss the next steps, hopefully, short of full-blown arbitration or litigation that you, as a construction company, can pursue presuming your claim has been properly preserved.
If your contract requires certain steps such as informal resolution attempts or other items, these are the first things that must be done while still preserving your rights to pursue all remedies available. Instituting such contractually required resolution steps can and should be the first “notch” on the dial of increased pressure on the Owner, General Contractor, or possibly Subcontractor against whom you have a claim.
Should these not work, or should certain deadlines, whether they be put in place by your state’s mechanic’s lien statutes, the Miller or Little Miller Act, or a private bond, become short, then certain other steps can and should be taken with the assistance of an experienced construction lawyer. Each of these, depending on the circumstance of your claim, could possibly lead to payment short of a full-blown lawsuit.
Should your claim for payment relate to a private project on which you have supplied labor or materials that increase the value of the real estate, you likely have mechanic’s lien rights. In my home state of Virginia, you will need to take into account your last date of work and properly apply the 90-day and 150-day rules before recording such a lien. Often your recording of a lien that meets the strict statutory requirements at the very least leads to some chaos and negotiations and at most leads to payment with some other possible outcomes (such as the replacement of the lien with a bond).
If you have a claim relating to a project for a state or federal government, then you likely have Miller or Little Miller Act payment bond rights. While 2nd tier subcontractors are required to give notice to the General Contractor and the bonding company of a potential claim, I find that the best practice is to notify these two companies regardless of the statutory necessity. Again, the end game is getting paid and any such notice can put pressure on a party that isn’t paying you. Such pressure can be brought to bear regardless of your “tier” on a project.
Finally, if neither of these options is open, sometimes a stern yet polite letter from your attorney can at least get the ball rolling toward payment.
Next week: The Last Straw, a/k/a litigation or arbitration.
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