An unpaid subcontractor on a private project has an effective form of protection under the mechanic’s lien statutes. That is not an option on public projects. Payment bonds, furnished by the prime contractor, are supposed to serve as alternative payment protection for subs. But what happens if the public project owner waives the payment bond requirement in the prime contract? Will an unpaid subcontractor have recourse against the owner?
One unpaid subcontractor recently argued that when the government waived a payment bond requirement and increased the retainage withheld from the prime contractor, the sub became a third-party beneficiary of the prime contract with direct rights against the retained funds. But did the sub have an independent payment claim against the government? Was the sub an intended, designated beneficiary of the arrangement? Or was the sub merely an incidental, indirect beneficiary of the increased retainage?
The other case in this issue involves pandemic-era court orders extending deadlines for court filings and proceedings. Did the orders apply to mechanic’s lien filings in the county registry of deeds? Was a contractor’s lien filing timely despite an apparent missed deadline? Or was the registry—an executive branch agency charged with keeping land records—not subject to the judicial extension orders?
