What is a payment bond and a Notice of Nonpayment

What is a payment bond and a Notice of Nonpayment

Q.

What is a payment bond and a Notice of Nonpayment?

A.

A payment bond is a type of bond seen most often in public construction projects. Sometimes they’re seen in private construction projects. Basically, a bond is a promise made by the contractor and a surety that says if someone below, like a subcontractor, does not get paid, they can look to the bond for payment. Instead of filing a claim of lien, they pursue the bond.

How do they pursue the bond? Answer: through a timely Notice of Nonpayment that gets served on the surety and the contractor, among others. It does not get recorded in the public records, just served.

[Legal sources: For bonds in connection with public projects, look to Chapter 255 of the Florida Statutes. For bonds in connection with private projects, look to 713.23 through 713.245.]