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Who must have a bond?

All contractors operating within the State of Washington must register with the Contractor’s Section of Department of Labor & Industries. RCW 18.27.040(1); WAC 296-200A-025. All registered contractors must maintain a bond in the amount of $12,000.00 if they register as a general contractor and a bond in the amount of $6,000.00 if they register as a specialty contractor. RCW 18.27.040(I); WAC 296-200A-030.

Who can file a claim against a contractor’s registration bond?

Anyone with a valid claim against a contractor can bring in action in the appropriate superior court. RCW 18.27.040(3); WAC 296-200A-080. The claim must fall within the conditions of the bond. The appropriate superior court is typically in the county where the work was performed.

What must I include in the claim?

Washington statutes are very specific in what you must include in your claim. These items include: the name of the contractor exactly as it appears in the contractor’s registration file, the contractor’s business address, the name of the owners, partners or officers of the contractor, if known, the contractor’s registration number, the name of the bonding company that issues the contractor’s bond, the bond number and effective date of the bond. WAC 296-200A-080(3)(a)-(d) and (4)(a)-(c).

In addition, you will want to list the background facts that gave rise to your dispute as well as the legal elements of the claim you are bringing. It is highly advisable that you seek the guidance of an attorney when drafting your claim.

How do I serve the contractor with the claim?

After you or your attorney has drafted and filed your summons and complaint in the appropriate superior court, you must send three conformed copies of the summons and complaint and a required fee of $50.00 to the Contractor’s Section of the Department of Labor & Industries by certified mail, return receipt requested. RCW 18.27.040(3); WAC 296-200A-080. The Department will keep one copy of the summons and complaint and mail one copy to the contractor and the other copy to the contractor’s surety. You must serve the contractor through Department or you risk losing your claim rights.

When must I bring my claim?

If you are a residential homeowner filing a breach of contract claim, you must bring your claim within two years. If you are any other authorized party, you must bring your claim within one year. RCW 18.27.040(3).

For breach of contract claims, the time period beings when the contract is substantially completed or abandoned. For all other claims, the time period begins running from the date the claimed labor was performed, the benefits accrued, the materials and/or equipment furnished or when the taxes and contributions became due.

Can I claim attorney fees?

If you are a party to a construction contract that have prevailed in bringing a claim for breach of contract you may claim reasonable attorney fees and costs. RCW 18.27.040(6). However, a surety’s liability is limited to the aggregate penal sum of the bond. RCW 18.27.040(4). This limit includes a prevailing party’s claim for attorney fees and costs. RCW 18.27.040(4)(e)(5)-(6).

This means if your general contractor has a registration bond for $12,000.00 and you have a been awarded $10,000.00 for your claim and $3,000.00 for attorney fees, the surety is only liable for $12,000.00, the amount of the bond, not $13,000.00 the total amount of your judgment.

What do I need to do after receiving a judgment?

If you receive a final judgment against the contractor, you should forward a copy to the Contractor’s Section of the Department of Labor & Industries for their records.

 

Legal Disclaimer: The information on this page does not constitute legal advice and should not be relied upon as each situation is fact specific and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. The information on this page is solely for the purpose of legal education and is intended to only provide general information about the matters stated therein. The information on this page should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area of the matters stated therein. No attorney-client relationship is formed without an actual agreement confirmed in writing. I am licensed only in Washington and Oregon.