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What is a payment bond?

A payment bond is an insurance policy purchased by the original contractor25. If a subcontractor or supplier is not paid, a claim can be made against the policy for payment26.

25   UTAH CODE ANN. §§ 63-56-38(1) & 14-2-1(2)

26   UTAH CODE ANN. §§ 63-56-38(4) & 14-2-1(4)


Who may make a claim on the bond?

Generally, any person who could file a lien on a private project may make a bond claim on a public project27.

27   Trench Shoring Services v. Saratoga Springs Development, LLC, (Utah Ct. App. 2002)


What must a Notice of Claim include?

Utah does not have a specific requirement the information to include in a bond claim. However, if there is no bond, then a claim can be made against the city, county, school district, etc... that contracted for construction and there is a specific procedure for giving the public entity notice. Moreover, several payment bonds contain specific notice requirements. To be safe and consistent, a Notice of Claim should be sent that complies with Utah's public failure to post a bond requirements and the Miller Act (Federal Payment Bond Act). The Notice of Claim should include:

  1. The name, address, and phone number of the claimant
  2. The name of the project
  3. The location of the project
  4. The name of the debtor
  5. The amount owed
  6. Date labor or materials were last furnished
  7. A request for a copy of the bond28

28   UTAH CODE ANN. § 14-1-19


When must the Notice of Claim be sent?

The Notice of Claim should be sent within ninety days after last furnishing labor or material29.

Notice of Claim Timeline

Figure 12 Deadline for Bond Claim on Public Project

How

The notice must be sent by registered or certified mail, postage prepaid, return receipt requested30.

Who

A certified version should go to the original contractor and the public entity31. Copies of the notice should go by first class mail to all contractors and suppliers between the claimant and the original contractor.

29   UTAH CODE ANN. § 14-1-19

30   UTAH CODE ANN. § 14-1-19

31   UTAH CODE ANN. § 14-1-19


After the Notice of Claim, should I take any further action?

If you are not paid within ninety (90) days after last furnishing labor or material32, you must file an action (lawsuit), within one (1) year after last furnishing labor or material33.

Lawsuit Timeline

Figure 13 Deadline to file lawsuit for Public Bond Claim

32   UTAH CODE ANN. § 63-56-38(4)b)

33   UTAH CODE ANN. §§ 63-56-38(5) & 14-1-19


 
 

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