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There are important distinctions in the notice requirements between the Federal Miller Act (40 U.S.C., ?270(a) et seq.) and Maryland‘s Mechanics‘ Lien Law (Md. Code Ann., Real Prop. Art. ?9-101 et seq.). Under both the Miller Act and Maryland‘s lien law, a claimant who does not have a direct contractual relationship with the owner of a project must provide notice to the owner of its intent to make a claim. However, the determination of whether a claimant‘s notice is timely differs under each law.
Under Maryland‘s lien law, notice of intent to lien must be served upon the general contractor and owner of a project within one hundred twenty (120) days of the claimant‘s last day of work on the project. Under the Miller Act, notice of intent to make a claim on a bond must be served upon the bond principal and surety within ninety (90) days of the claimant‘s last day of work on the project. In Maryland, a notice of a mechanics‘ lien is timely served if it is mailed within the 120 day period, even though the notice may not be received by the intended recipient within the notice period. However, in Maryland, the Miller Act notice requirement is different.
In Pepper Burns Insulation, Inc. v. Artco Corp., 970 F.2d 1340 (4th Circuit 1992), the court reviewed a situation in which Pepper Burns, a second tier subcontractor on a federal construction project, brought suit against Artco Contracting, the general contractor on the federal project, to recover on a Miller Act payment bond for work completed but unpaid. Within 90 days after the completion of Pepper Burns‘ work on the project, Pepper Burns mailed to Artco the required Miller Act notice of its claim on the bond. Artco received Pepper Burns‘ notice on the 95th day after last performing work. The trial Court found that Pepper Burns‘ notice was timely under the Miller Act. Artco appealed the decision and the United States Court of Appeals for the Fourth Circuit held that Pepper Burns had failed to give timely notice of its intent to make a claim on Artco‘s payment bond.
In reaching its holding, the court reviewed Section 2(a) of the Miller Act, which requires that the parties seeking recovery on a payment bond "giv[e] written notice to said contractor within ninety (90) days from the date on which such person did or performed the last of the labor or furnished or supplied the last of the material for which such claim is made . . ." 40 U.S.C. ? 270b(a). The court determined that the plain meaning of the language "giving written notice to said contractor" requires actual receipt of the notice by the contractor. According to the court, mailing alone does not fully accomplish the condition to "give?notice", as "giving notice" requires putting the notice in the possession of the contractor. Consequently, the court held that the statute‘s language requires that in order for notice to be timely, the contractor must actually be in possession of the notice of claim within the 90 day period.
Maryland‘s mechanics‘ lien law is slightly different. Under the mechanics‘ lien law, notice received after the 120 day period has expired is timely, as long as the notice is sent within the 120 day period and as long as the contractor receives the notice at some point. That is, if notice is mailed to the contractor by certified mail, return receipt requested, within the 120 day period, and the contractor never picks up the certified mail, any attempt to serve notice after the expiration of the notice period will be considered untimely. Thus, when mailing the notice to the owner and/or contractor by certified mail, it is advisable to mail the notice of mechanic‘s lien far enough in advance so that if the notice is never picked up, the claimant may use alternate means to provide notice within the statutory period.
In any event, when a contractor is seeking to make a claim for non-payment, strict compliance with notice requirements is crucial. Failure to properly comply with notice requirements will preclude recovery for that claim.see all Construction and Surety Law articles »
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