AIA/AGC Joint Committee Recommends Bonds and Liens
The Joint Committee of the Houston Chapters of the AGC and AIA have published an updated Recommendations paper regarding liens and bonds in Texas. Payment and performance bonds are required on most state and federal public projects. Bonds are optional on private projects. The statutory and other benefits of bonding a project are discussed, and bonds are distinguished from insurance products such as subguard insurance. The statutory benefits include freeing the project from supplier and subcontractor liens, and allowing project financing to continue. Retainage requirements on private project are eliminated. Contractor defaults are protected. But bonds do have their limitations, and do not cover every possible claim. This paper is recommended reading for all who earn their living in the Texas construction industry.
Written By: David D. Peden, Porter Hedges LLP
