HB 723 - Construction Bonds Summary

• Notice of nonpayment on public and private construction bonds must be verified under oath and include supporting documents (contracts, invoices, payment records) substantiating the claimed unpaid amount.

• Claimants or lienors serving fraudulent notices of nonpayment (willfully exaggerated amounts, false work claims, or gross negligence) are deprived of bond rights, with the opposing party entitled to attorney fees.

• Time periods for serving notices of nonpayment are measured from the last day of labor/materials furnished and cannot be extended by certificate of occupancy or substantial completion issuance.

• Contractors may record notices identifying project bonds as conditional payment bonds before construction commencement, limiting surety liability to payments received from the owner without converting the bond to a common law bond.

• Amendments to attorney fee provisions allow contractors, subcontractors, laborers, and materialmen to recover reasonable attorney fees when prevailing in bond disputes; effective October 1, 2018.