How do you get paid on a public construction project when liens aren’t an option?
If you’re a subcontractor or supplier, a bond claim is the main way to recover what you’re owed.
Learn how bond claims work on public projects, who can file, important deadlines, and the common mistakes to avoid.
A bond claim is a formal demand for payment made against a surety bond issued for a construction project.
It protects the people who supply labour, materials, and services when a contractor fails to meet its contractual obligations.
Lien rights don’t apply to a public construction project. You can’t lien government-owned land or buildings to satisfy a debt.
Instead, general contractors of public projects are required by law to post a payment bond as a financial guarantee.
If the contractor fails to pay their financial obligations, the claimants look to the bond rather than the property.
A surety bond guarantees that the general contractor (or prime contractor) will pay subcontractors, suppliers, and others who contribute to the construction project
It is a contract between three parties:
If a valid claim is made, the surety pays the claimant. However, recovery is capped at the bond’s penal sum, the maximum amount the surety is obligated to pay.
Eligibility depends on the project type, the bond form, and applicable laws.
The following parties can file bond claims:
The right to file is generally clear for anyone who has a contract directly with the general contractor (tier 1) or a subcontractor (tier 2).
Once you get further down the chain (tier 3 and beyond), it gets less straightforward. Whether you qualify depends on the terms of the bond and the local laws that apply.
Some lower-tier parties may still qualify, but they’re usually subject to extra notice requirements.
Eligibility rules depend on:
Bond claims are extremely strict on due dates and limitation periods. Courts enforce very specific timelines for notice and response set out in the bond document. In other words, you can’t miss deadlines, as there’s no grace period.
Generally, a claimant must give written notice to both the contractor and the surety within 120 days from the date they last provided materials or services.
Additionally, any legal action on the bond must be started within one year of the prime contractor finishing their work, including any repairs done under a guarantee.
These timelines are strict.
Notice requirements are also strict. Bond claims often fail because of the following mistakes:
While details vary by project and bond, the process is generally simple.
Before filing anything, confirm:
You have a right to request a copy of the payment bond from the project owner or the prime contractor. To be safe, ask for it as soon as the contract is awarded.
You’ll need the following documentation:
Next comes formal notice.
Your notice should be in writing and should include:
Some bond forms also require a sworn statement, which must be commissioned or notarized.
Be sure to serve the notice to the surety and contractor at their business addresses via registered mail. Keep the receipt as proof of delivery.
If the claim is valid and you still haven’t been paid, you can pursue legal action against the bond, which means suing the surety company.
Keep in mind, you have one year from the last furnishing date to file this lawsuit.
Below are common mistakes you should avoid when making a bond claim:
Frequent issues include:
Important: If your documentation doesn’t match the original contract, the surety may deny the claim based on “insufficient proof.”
Unlike lien claims, bond claims leave very little room for error. Because the surety could be responsible for a huge payout, they scrutinize every detail of a claim.
A wrong date, a missing document, an incorrect service method, or an unsigned sworn statement can be enough grounds for rejection.
These mistakes might feel small, but sureties can and often do use them as reasons to deny a claim, even when you’re clearly owed the money.
Getting legal advice before you send notices or file a claim ensures you meet all formal requirements, saving you time, money, and unnecessary headaches.
Bond claims are powerful, but only when handled correctly. Understanding notice requirements, deadlines, and proper documentation can prevent costly mistakes.
If you’re dealing with non-payment on a bonded construction project in British Columbia, legal advice can help you:
Harbourview Law focuses on construction and commercial litigation and represents contractors, subcontractors, suppliers, and businesses across BC.
If you’re owed money on a public project or facing issues with a payment bond, contact us today to discuss your situation and how we can help.
We bring real-world business and construction experience to every case. We understand how legal challenges impact your project or operations, so our approach is focused on resolving issues quickly, efficiently, and with your bottom line in mind.
Disputes are an inevitable part of doing business, but they come at a high cost in time, money, and energy. Our goal is to resolve them as quickly as possible so you can get back to what matters most: running your business.
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