The nationwide Little Miller Act protects public entities that default in their obligations to pay Ohio construction subcontractors and suppliers. Federal legislation carried out at the state level mandates the use of payment bonds and performance bonds to ensure just compensation for those supplying materials or services.
Financial safeguards operate in two primary ways:
- Payment Bonds: These ensure that all parties connected with the project receive payment, even in a default situation.
- Performance Bonds: These guarantee that the contractors fulfill their obligations to subcontractors and suppliers through contracts.
Navigating the Little Miller Act can be complex since each state’s statute can differ slightly. Ohio’s law has strict guidelines, and individuals must understand the critical steps to have a successful claim.
Preliminary Notice Requirements
To secure the grounds for legal payment protection under the Little Miller Act, subcontractors or suppliers must inform the general contractor, the public entity, and the surety company within 21 days of beginning work.
Obtaining Bond Information
Public entities and the general contractors working for them must maintain payment bond information. In the event of a claim, subcontractors and suppliers must acquire copies of the payment bond, which includes pertinent information, such as the issuing surety, bond terms, and the amount due at the time of the claim.
Serving a Stop Notice
When contractual issues arise, the Ohio Little Miller Act allows for halting fund disbursement. Upon seeking a claim, general contractors and public entities may be served a stop notice.
Filing a Claim Against the Payment Bond
Construction subcontractors and suppliers have a 90-day window after providing services or materials for filing a claim. Surety companies will require a copy of the original contract and information regarding unpaid obligations and the amounts owed.
Suing to Enforce the Claim
If a surety company denies a claim, legal action is an option. The Little Miller Act requires filing a suit six months after the public entity completes and accepts the project.
Pursuing payment recovery is challenging, especially for those not well-versed in the complexities of the Little Miller Act. To utilize critical protections, contact the attorneys at National Lien & Bond and complete our claim form. We have successfully secured over $9 billion across 30,000 construction contract liens.