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North Carolina “Little Miller” Payment Bonds: The Short Summary©

Authored by attorney Neil Lowenstein1

Like many states, North Carolina has “Little Miller” code provisions intended for the protection of those that furnish labor or materials for North Carolina public projects since those persons cannot claim claims of lien against the real property. It covers the construction, reconstruction, alteration or repair of any public building or other public work or public improvement, including highways (NCGS § 44A-25). Below is a summary of certain key aspects of North Carolina’s public project payment bond laws:

  1. When Required (NCGS § 44A-26): When total amount of construction contracts for any one project exceeds $300,000 (NCGS § 44A-26(a)).

  1. Enforcement Time Constraints (NCGS § 44A-27 and § 44A-28): Must wait at least 90 days after the day on which the claimant last performed or furnished work or materials for which payment is claimed (NCGS § 44A-27(a)); but cannot exceed one year from the day on which the claimant last performed or furnished work or materials, or one year from the day on which final settlement was made with the contractor – whichever is longer (NCGS § 44A-28).

  1. Notice Requirement (NCGS § 44A-27): Notice required if not a direct subcontractor; which must be given within 120 days from the date on which the claimant last performed or furnished work or materials, stating with substantial accuracy the amount claimed and the name of the person for whom the work was performed or to whom the material was furnished (NCGS § 44A-27(b)).

  1. Notice of Public Subcontract (NCGC § 44A-27): Additionally, claims may not include labor or materials provided more than 75 days prior to the claimant’s service by certified mail or by signature confirmation as provided by the U.S. Postal Service (NCGS § 44A-27(c)) of the claimant’s written Notice of Public Subcontract to the contractor (NCGS § 44A-27(b)), unless claim is less than $20,000 (NCGS § 44A-27(e)); otherwise claim is limited to value of labor and material furnished within 75 days of the service of the Notice of Public Contract, or $20,000; whichever is greater (NCGS § 44A-27(b) – (e)).

  1. Contractor Project Statement (NCGS § 44A-27): Contractors must provide their subcontractors with a Project Statement that includes certain minimum information about the project, the contracting body, the payment bond and the surety (NCGS § 44A-27(f)(1)). Lower tiers must in term provide the Project Statement information to those of lower tier (NCGS § 44A-27(f)(2)). Subcontract agreements are not enforceable against lower tiers until the Project Statement has been provided to the lower tier (NCGS § 44A-27(f)(3)).

  1. Payment Bond Copies (NCGS § 44A-27 and -31): Contractors must provide copies of payment bonds if requested within 7 calendar days after receipt of the request (NCGS § 44A-27(b)). Additionally, public bodies shall furnish certified copies of payment bonds upon 10 days’ notice and request (but may require reasonable payment for the actual cost of furnishing the certified copy) (NCGS § 44A-31).

  1. Attorney’s Fees (NCGS § 44A-35): The prevailing party to a public bond action may be awarded its reasonable attorneys’ fees by the presiding judge in addition to other relief awarded (NCGS § 44A-35).

Copyright 2015, Vandeventer Black LLP. Lien rights involve complex legal requirements. This summary of North Carolina mechanic’s lien laws is for general informational purposes and is not intended as specific legal advice.
1 Neil Lowenstein is licensed in North Carolina, as well as Virginia and the District of Columbia. Neil chairs Vandeventer Black’s Construction and Government Contracts Practice Group.

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