The Michigan Public Works Bond Statute requires that a supplier or subcontractor that does not have a contract the the principal contractor (providing the payment bond) must give two notices by certified mail: First, written notice to the principal contractor within 30 days after the first supply of labor or material; and second, written notice to both the principal contractor and governmental body within 90 days after the last labor or material.
1. What if the 30 day certified mail notice comes back? If this notice is sent by certified mail but is never delivered or received by the general contractor, has the sub or supplier complied with the Bond Statute? I say “yes” but be prepared for an argument by the attorney for the principal contractor/surety that the Supreme Court requires proof of actual delivery. Although the Bond Statute only requires certified mail notice and certified mail does not guarantee delivery, there is one court case that contains language that appears to require that the general contractor must actually receive this first 30 day notice
Practical Pointer: If the certified mail notice comes back “not delivered” try to make actual delivery by either personal service, fax, or email – something to prove that that notice was delivered.
2. Can I give the 30 day and 90 day notices before start or finish? If either notices is delivered before, rather that “within,” either the 30 or 90 day periods, is the service sufficient? The answer is not clear on either the 30 or 90 day notice. I say “yes” because there is no harm caused by delivering the notice early; the purpose of the notices is fulfilled.
However, you can expect the attorney for the principal contractor/surety to argue that the Bond Statute is to be strictly construed and giving either notice prematurely is not permitted. There is one court case holding that a premature 90 day notice was not sufficient and that reliance on the Construction Lien Act as a guide is misplaced.
Practical Pointer: If you decide to give either notice prematurely, take the extra step and give another notice within the 30 or 90 day periods – to cut-off any argument.
3. When do the 30 and 90 day notices start to run? the 30 and 90 day notices should be sent within 30 and 90 days of your first and last labor or material – not you first or last invoice or other non-actual furnishing of labor or material. Be able to prove actual delivery of material or labor at the project site.