Construction Bond Claims in California

On public works projects and many bonded private projects, subcontractors and suppliers can claim against the general contractor's payment bond — often recovering faster than through the mechanics lien process alone.

What Is a Payment Bond?

A payment bond is a surety bond posted by a contractor guaranteeing that all subcontractors, suppliers, and laborers on the project will be paid. On California public works projects, payment bonds are mandatory under Public Contract Code §9554. On large private projects, lenders or owners often require them as well.

The payment bond creates a direct right of recovery for unpaid subcontractors and suppliers — against the surety company — independent of the property lien process.

Public Projects: The Little Miller Act

California's "Little Miller Act" (Public Contract Code §9550 et seq.) requires payment bonds on all public works contracts over $25,000. Subcontractors and suppliers on qualifying public projects can file claims directly against the payment bond without first serving a mechanics lien (since government-owned property cannot be liened under California law).

For public projects, preliminary notice must be served within 20 days of first furnishing work or materials. Bond claims must then be filed within 6 months of project completion.

Private Projects: Contractual Payment Bonds

On private projects, payment bonds are not always required — but they are common on larger, lender-financed projects. If a payment bond exists, subcontractors and suppliers can make a claim against it in addition to, or instead of, filing a mechanics lien.

The mechanics lien and bond claim processes run in parallel. A subcontractor typically pursues both simultaneously to maximize recovery options.

How to Make a Bond Claim

• Identify whether a payment bond exists (ask the GC or owner, or check the project's public records)
• Obtain the name of the surety company and the bond number
• Send a formal written notice of claim to the surety and the general contractor by certified mail
• Include all supporting documentation: contract, invoices, preliminary notice, delivery receipts
• Follow up if the surety does not respond within 30 days

Frequently Asked Questions