The Subcontractor's Guide to Lien Rights on Public Works

One of the most important distinctions between private and public construction is lien rights. On private projects, unpaid subcontractors can file a mechanic's lien against the property itself — a powerful remedy that creates a cloud on the title and often forces payment. On public works projects, however, you cannot lien government property.

This doesn't mean you're unprotected. Public works projects offer alternative payment security mechanisms — primarily payment bonds and stop notice rights — that can be equally effective if you follow the rules precisely.

Payment Bond Claims

As discussed in our article on bonds, the GC's payment bond is your primary remedy on public work. The bond surety guarantees payment to subcontractors and suppliers.

The critical rules: - First-tier subs (direct contract with the GC) typically don't need to file preliminary notice but must file a bond claim within 90 days of last furnishing labor or materials (federal) or per state statute. - Second-tier subs and suppliers (contract with a first-tier sub, not the GC) must usually provide preliminary notice to the GC within a specified period — often 30 to 90 days of first furnishing. - Deadline compliance is absolute. Miss the deadline by one day and your bond claim rights are gone.

File preliminary notices proactively, even when you expect to be paid. It preserves your rights at no cost.

Stop Notices and Other Remedies

Some states (notably California) provide stop notice rights on public work. A stop notice directs the public agency to withhold funds from the GC sufficient to cover the unpaid sub's claim. This is a powerful tool because it puts direct pressure on the GC to resolve payment disputes.

Other available remedies include: - Prompt payment act claims. Federal and state prompt payment statutes impose penalties and interest on late payments. - Trust fund statutes. Some states treat construction payments as trust funds — meaning the GC holds your payment in trust and diverting it to other purposes is a breach of fiduciary duty. - Direct action against the agency. In some jurisdictions, if the payment bond is inadequate, you may have a direct claim against the public agency.

The key across all of these remedies: every one of them has notice deadlines, filing requirements, and procedural steps that must be followed exactly. Keep a calendar of deadlines for every public project you work on.

The Bottom Line

On public works projects, traditional mechanic's liens do not apply because you cannot lien government property. Instead, subcontractors must rely on payment bond claims and stop notices to protect their payment rights. The prime contractor is required to furnish a payment bond at 100% of the contract price, and this bond is the sub's primary remedy when payment is withheld. Stop notices filed with the public entity can require the agency to withhold funds from the prime contractor until the claim is resolved.

Know the deadlines for bond claims and stop notices. They are strict, and missing them can extinguish your rights entirely regardless of how much you are owed. Keep copies of your subcontract, all pay applications, and all correspondence. When payment stops, act quickly and consult an attorney who specializes in construction payment disputes.