Filing a Bond Claim in Iowa
While the bond claim process can appear largely similar no matter where you are, there are distinct differences from state to state that can impact who’s covered, what documentation needs to be filed, and the deadlines by which you must submit your payment bond claim. Misconstruing any of this information can lead to a bond claim being denied and you being left without your due payment.
Iowa is no exception. In this guide, we cover all the information you need in order to successfully file your payment bond claim, Iowa laws that may affect your claim, and who is covered under Iowa payment bond statute.
Who can File an Iowa Bond Claim?
Each state has its own laws relating to surety bond claims which dictate who can and who cannot file a claim. It’s important to be aware of whether or not you are covered under the bond’s terms prior to filing. When it comes to filing a claim against a surety bond, Iowa contractor laws state that any subcontractor, laborer, or material supplier who contracted with either the general contractor or a first tier subcontractor is entitled to make a payment bond claim as a means of collecting due payment. However, anyone who was contracted below the first tier is in eligible to be covered by the bond’s terms. This can include lower-tier labor providers as well as suppliers to suppliers.
How to File an Iowa Bond Claim
- Preliminary Notice – Similar to the bond claim process in most states, the first step in your Iowa bond claim is to submit a preliminary notice. This notice secures your right to make a claim against a payment bond down the line, should you run into an issue of nonpayment with the prime contractor. The Iowa payment bond statute of limitations requires this notice to be sent to the prime contractor no later than 30 days after the first day you supplied any labor or materials to a project.
- Prepare Bond Claim Form – Once you have submitted your preliminary notice, you can file a bond claim, if the situation demands it. In Iowa, your bond claim needs to include an itemized description of any labor or materials you provided, the amount that you are due for the labor/materials, and a statement of claim for the amount you’re owed. It is also a wise decision to also include a description of the project and contact information for the prime contractor, as well as the project owner.
- Serve the Lien – When you have successfully filled out your bond claim form, you next need to make sure that it is delivered to the appropriate parties. In some other states, the claim may only need to be delivered to the prime contractor or the surety. While it is still advisable to send the claim to these parties, Iowa also requires you to submit your claim to the party responsible for awarding contracts on the project. This could be a commission, an advisory board, or an officer. The bond claim must be served within 30 days after the project is completed.
- Enforce the Claim – While many times this step will be unnecessary; it doesn’t hurt to be prepared for the worst. In some situations, your pay may still be withheld by Iowa contractors even after filing your claim. If this happens, you may then need to proceed with a lawsuit. However, it should be noted that these lawsuits can be both expensive and time-consuming, and there’s no guarantee you will be awarded your claim by the end. As such, this step should be reserved as only a final measure. These lawsuits must be filed at least 30 days after the project’s completion but not after 60 days have passed.
To best help you manage all of the required steps and documents related to the Iowa payment bond claims process, ConstructionDisputes.com provides a unique document management and communications platform. We also offer free legal notice templates to help you satisfy the notice requirements when working to obtain your due payment.
How do you Get Bonded in Iowa?
In order to become bonded, Iowa contractors must obtain a contractor license bond. This bond will often be required by project owners before they will award a contract to a contractor. This is because the bond helps protect against any contractors attempting to commit fraud.
To purchase the bond, contractors will need to register with the Iowa Department of Labor and apply for a bond with either an insurance or surety bond company. For more information on the licensing procedure, contractors can turn to the Iowa contractors guide.
The price of these bonds can vary depending on your circumstances. For an out-of-state contractor working in Iowa, they will be required to post a bond valued at $25,000 or more. Furthermore, city authorities responsible for public works projects may also require contractors to post a bond between $5,000 and $10,00. However, the out-of-pocket price for these bonds will only be between 1% and 5% of their total value.
How do you File a Mechanics Lien in Iowa?
Though a mechanics lien and a surety bond serve different purposes, the filing process for each in Iowa is quite similar. In order to file an Iowa mechanics lien, you must first submit a preliminary notice, then submit the lien then, if necessary, enforce the lien with a lawsuit.
- Preliminary Notice – Like a bond claim, the first step in filing a mechanics lien is to submit a preliminary notice. This Iowa lien notice secures your right to file a lien later on and needs to be filed within 30 days of first supplying labor or materials to a project.
- File Mechanics Lien – After you’ve submitted a preliminary notice, the next step would be to actually file the Iowa mechanics lien form. Per the Iowa mechanics lien statute of limitations, the lien must be filed within 90 days of the first time you provided labor or materials to the project. It can remain filed for a period of up to 2 years unless you submit an Iowa lien release form. The lien will have officially been filed when it is posted on the Iowa Mechanics Lien Registry.
- Enforce the Lien – Should you need to take legal action in order to enforce your lien, the Iowa mechanics lien timeline states it must be done so within 2 years following the end of the 90-day period in which you have to file the lien. Although, it is possible for property owners in Iowa to submit a written demand that decreases the 2-year period down to just 30 days.
However, be sure you have not forfeited your right to place a lien by submitting an Iowa mechanics lien waiver form. It’s not uncommon for these waivers to be requested when payment is exchanged and if you provide a lien waiver form, Iowa mechanics lien law will prevent you from being able to place a lien on the property.
Get Help with your Iowa Payment Bond Claim from ConstructionDisputes.com!
Whether you’re just looking for information on Iowa bond claim laws or are trying to actively file claims against surety bonds in Des Moines, IA right now, ConstructionDisputes.com can help. Between our team of highly knowledgeable experts and a wealth of online tools, we make filing your bond simple and fast. Our online document center makes filling out and tracking the paperwork for all your claims an easy process and we’ll even make sure every form you submit is in complete accordance with any necessary federal, state, or bonding company requirements.