How to File a Bond Claim in Texas
While most states have different criteria based on their own laws for how and when to submit a payment bond claim, the process itself is generally pretty similar from coast to coast. This is not the case when filing a bond claim in Texas. The Lone Star State likes to claim that everything’s bigger there, and that appears to include paperwork for Texas payment bond claims.
If you’ve only worked construction jobs in Texas, the process may seem straightforward enough but for those coming from out of state, the differences in the bond claim process may be a bit jarring. Instead of a single notice, making a claim against a payment bond in Texas requires recurring monthly notices.
Don’t worry, Construction Disputes is here to help you understand Texas’ process. To help contractors and subcontractors manage the required payment bond claim documents and procedures, we’ve created a unique claims document and communication platform. Built to look up construction bond claim information and coordinate with all parties involved in an active payment bond claim.
How to File a Bond Claim in Texas
Step 1: Request a Copy of the Bond
Similar to most other states, the first step in how to file a bond claim in Texas is to obtain a copy of the bond itself. This will give you all the information you’ll need to move forward with the next steps of the bond claim process.
In order to get a copy of a payment bond in Texas, all you have to do is submit a formal written request to the general contractor who posted the bond. The contractor is required to provide it to you within 10 days of receiving your request.
Step 2+: Serve Third-Month Notice
This is where Texas differs a bit from most states when it comes to the bond claim process. Generally, in this step, you would be required to send a one-time preliminary notice towards the beginning of the project to secure your right to make a bond claim later on. In Texas, however, the state’s Little Miller Act requires you to send monthly recurring notices to be able to make a claim.
The actual claim is made on the third-month notice, which is known as the “notice of claim.”
In order for the claim to be valid, you must send it via certified or registered mail to both the general contractor and the surety responsible for issuing the bond. The claim must be sent by the 15th day of the third month after you were not paid for any labor or materials supplied to the project.
For example, if you worked on a project in January for which you were not compensated, then the deadline by which you must file your claim would be April 15. In this scenario, February would be the first notice, March would be the second, and April would be the third and actual notice of claim.
What Information Should be Included in the Third-Month Notice?
When filling out your third-month notice, it’s crucial that you make sure to include all the necessary requirements for your claim. This is a form to make sure you receive the money you’re owed so you’ll want to make sure it’s as free of errors as possible and good to go.
The information that must be included is:
- Your name
- General contractor’s name
- The amount you’re owed
- The month and year you weren’t paid for the labor or materials provided
- The date you sent the notice
In addition to this information, your third-month notice should also include the following documents:
- A Notice of Claim for the month you weren’t paid
- A notarized Sworn Statement of Account
- A copy of the contract between you and the general contractor
- Any invoices related to the payment you’re owed
Step 3: Enforce the Payment Bond Claim
Should your third-month notice of claim not result in any payment, the next step would be to file a lawsuit against the contractor and surety who are avoiding paying you. Texas law states you can only bring about a lawsuit 60 days after sending the third notice, but before one year has elapsed. If you wait too long after filing the third notice, then your claim is no longer enforceable and you forfeit any payments that you were due.
Frequently Asked Question About Bond Claims in Texas
How Do Surety Bonds Work in Texas?
Similar to a mechanic lien, Texas surety bonds are an agreement put in place to protect subcontractors from not being paid. Whether or not a surety bond is required for a job is often dictated by local, municipal, and Little Miller Act laws.
How Do You Get a Surety Bond in Texas?
In order to purchase a surety bond such as a payment bond in Texas, the first thing you need to do is determine what type of bond you need. After that, you need to contact a licensed surety company that will run a check on your background and present you with a quote. From there you can decide whether or not to go with their offer.
How Much Does a Surety Bond in Texas Cost?
Texas payment and performance bond rates can vary quite a bit based on factors such as the type of bond being purchased and the level of risk associated with your application. In general, a surety bond in Texas will cost about 1-3% of the bond’s amount.
Can a Subcontractor File a Lien in Texas?
Yes. According to Texas lien law any general contractor, subcontractor, design professionals, and material suppliers and fabricators can file a lien if they are unpaid for their work.
How Do You File a Mechanic’s Lien in Texas?
The first step in the Texas mechanics lien process is to fill out a Texas mechanics lien form. After that, you would next bring the form to the county recorder office before serving the lien to the property owner.
What is a Mechanics Lien in Texas Statute of Limitations?
The Texas mechanics lien timeline is the same as it is for filing a claim against a bond, by the 15th day of the third month after not being paid for labor or materials.
What Are the Texas Contractor Bonding Requirements?
Unlike most other states that use a state contractor’s board, there are no Texas surety bond requirements that prevent someone from being bonded.