Illinois construction subcontractors and suppliers are protected from public entity default by the nationwide Little Miller Act. Subsequently, payment bonds and performance bonds are a requirement to guarantee compensation to parties providing materials or services.
These financial guarantees work in two distinct ways:
- Payment bonds provide fund disbursement to all entities involved with the project regardless of default.
- Performance bonds ensure contractors fulfill contractual obligations.
Applying the Little Miller Act to Illinois construction contracts can be complex. The law has strict guidelines, and below is an overview of the steps to take for a potential claim.
Identify Preliminary Notice Requirements
Establishing a right to payment protection requires subcontractors or suppliers to inform the general contractor, the public entity, and the surety company within 20 days of starting work. Proper notification is the basis for filing a claim under the Little Miller Act.
Obtain Bond Information
Public entities and general contractors hold payment bond information. In the event of a potential claim, subcontractors and suppliers should get copies of the payment bond, which includes essential information, such as the issuing surety, bond terms, and the amount owed.
Serve a Stop Notice
The Illinois Little Miller Act can prevent the disbursement of funds during contractual issues. Construction subcontractors or suppliers can serve a stop notice to public entities when payment problems begin.
File a Claim Against the Payment Bond
Illinois subcontractors or construction suppliers have just 90 days to file a claim after delivering services or materials. Surety companies request a copy of the original contract and detailed information regarding unpaid services or materials, like the amounts owed.
File a Lawsuit to Enforce the Claim
Although a surety can deny a claim, legal action is an available means of redress. However, the Little Miller Act requires filing within six months after the completion and acceptance of the project by the public entity.
Recovering payments through lawsuits can be complex, especially when juggling multiple construction contracts and projects. To tap into the Illinois Little Miller Act protections, contact the attorneys at National Lien & Bond or fill out our claim form. We have obtained over $9 billion across 30,000 construction contract liens for thousands of hard-working clients like you.