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State Finance Law Section 137 Amended: Bond Claims Due Within One Year of Completion and Acceptance

State Finance Law Section 137 Amended: Bond Claims Due Within One Year of Completion and Acceptance

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Up until recently, anyone that submitted a claim under a payment bond on a public project in New York could expect that the statute of limitations to bring a claim was one year from the time that payment became due.  However, effective August 3, 2011, the legislature has amended State Finance Law Section 137 and an action against a payment bond must now be commenced within one year from the time that the public entity accepted the completion of the project.

However, you should still be careful in reviewing the timeliness of your payment bond claim.  Many payment bonds have very specific timing provisions listed in them.  The amendment to State Finance Law Section 137 cannot override an enforceable pre-existing contract provision.  That means that if your payment bond said that the action to enforce a claim had to be brought within one year of the time that payment became due, then that provision still controls.

For new claims, there will be those that will argue that State Finance Law Section 137 provides a minimum and any contractual provision that creates a one year period that would expire before one year from the time the project is accepted is illegal and unenforceable.  But my suggestion is to not become the test case.  Follow the provisions of your payment bond and you are in good shape to avoid procedural problems and you will be able to focus on establishing that you performed your work properly and on time and should be paid.

The attorneys at Kushnick Pallaci handle payment bond claims including claims under the Miller Act and the Little Miller Act.  You can contact us here.

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