Understanding P3 Projects
Public-Private Partnership construction projects, also commonly referred to as P3 projects are becoming increasingly more popular within the construction industry. P3 projects are contractual agreements between public and private entities in which private entities are significantly involved in the delivery and financing of the projects. Under a P3 project, the financial risk of the project is shifted from the public entity to the private entity.
While there is essentially no difference in the tasks that are performed on a P3 project, the regulations, contractual obligations and legal rights available to you may be very different. Below, we will address some of these differences in regards to your construction lien rights.
If you’re a contractor involved in a P3 project, and have not been compensated for the services and/or materials provided, we strongly suggest contacting one of our licensed and experienced Sarasota construction attorneys at Cotney Attorneys & Consultants.
Construction Liens and Bond Claims on P3 Projects
Because P3 projects are a combination of either state, civil, or federal projects, it is often difficult to look at the face value of the agreement and determine which laws are applicable. To properly determine the type of project a P3 agreement would be considered and which laws would apply to that particular project in terms of nonpayment or default on the contract, it is helpful to have a Sarasota construction lawyer throughly review the underlying structure of the agreement to identify which remedies are available to you.
Determining The Type of Project
When it comes to strictly state, civil, or federal construction projects, the remedies that are available to contractors for nonpayment or default on a contract are quite clear; unpaid parties can exercise their lien rights on private projects and file a bond claim on civil, state or federal projects. However, when it comes to P3 projects, it becomes a little hazy. Since P3 projects can appear to be either public or private projects, it’s important to understand whether your P3 project is fundamentally private or public.
Your construction attorney in Sarasota, FL will consider a number of factors when determining whether your P3 project is fundamentally public or private in nature, including:
- Who is the underlying property owner?
- Is there another interest in the property other than that of the underlying owner that could give rise to lien rights?
- Who is funding this project?
- What are the terms of the agreement?
Construction Liens on Public Projects
A construction lien remedy is typically only applicable on private projects. Sovereign immunity, the Miller Act and the individual states’ Little Miller Acts prohibit construction liens from attaching to most public projects, however, it may be possible on a P3 project. In order for a mechanics lien to attach to a P3 project, there must be some private property interest that is sufficient enough to warrant the attachment of the lien. For example, in some states, a leasehold interest is a property interest that is sufficient enough to warrant a lien attachment, however, this is expressly forbidden in other states.
When it comes to P3 projects, the law can be extremely confusing and complex. As such, contractors are advised to seek legal counsel and be extremely cautious when entering into a P3 agreement.
To schedule a consultation with one of our experienced construction lawyers, please call our office 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.