Construction Law

How Pre-Claim Payment Demands Help You Save Money featured image

How Pre-Claim Payment Demands Help You Save Money

Litigation is expensive and time-consuming, so avoiding a legal battle in court is always preferable to the alternative. If you provided materials, labor, or services as a subcontractor, materials supplier, professional, or laborer, but haven’t been paid, you can serve the debtor a payment bond claim.

However, this might not be your best option if you want to avoid a costly legal battle with your debtor. In this short article, our Miami construction attorneys will explain how pre-claim payment demands can help you avoid an expensive legal battle while reclaiming your due payment and maintaining relationships with the general contractor.

Benefits of a Pre-Claim Payment Demand

There is more than one method for securing a late payment from a general contractor. Whether a general contractor is negligent, lazy, or underfunded, it’s important to apply pressure diligently to receive your payment. Although litigation is a surefire way to get a debtors attention, there are less direct methods that show general contractors that you mean business. One such method involves issuing a pre-claim payment demand.

When you serve the public entity, the surety, and the general contractor a pre-claim payment demand, you solidify your position without an expensive, time-consuming lawsuit. You also establish a firm, professional position with the debtor that shows your desire to settle the issue outside of court as well as your awareness of the necessary legal procedures to collect your debt.

Types of Pre-Claim Payment Demands

There are different types of pre-claim payment demands depending on your role in a project, who hired you, and how far along the pre-claim payment demand process you are.

  • Pre-Claim Notice: Informs the public entity, the surety, and the project contractor of your intention to proceed with a lawsuit if the debt is not resolved immediately.
  • 45 Day Notice of Intent: Used by all claimants except laborers who were not hired by the project contractor. This notice can be served at the onset of a contract to inform the contractor of your intent to collect payment when due. If the late payment has already occurred, you may include a payment demand with this notice.
  • 90 Day Notice of Nonpayment: Used by all claimants including laborers that were not hired by the project contractor. This notice is served 45 days from the first provision of labor, materials, or services. Include a sworn statement in this notice.
  • Pre-Lawsuit Payment Demand: Before filing a lawsuit, serve a final payment demand letter to the public entity, the surety, and the project contractor. Clearly state your intention to file a lawsuit for breach of contract and violation of the Prompt Payment Act in accordance with the payment bond.

If you would like to speak with a Miami construction attorney, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.