New Public Bond Law Kicks in 1/1/12


Designed to Eliminate Guesswork

             Last month Governor Quinn signed into law amendments to the Illinois Construction Bond Act, the most important of which establishes a statute of limitations of one year to file claims on a public construction bond. 

            H.B. 1226 eliminates the current deadline for filing, i.e., “six months…after acceptance of the project.”  As of January 1, 2012, the deadline will be one year from the last day of furnishing materials or providing services.  Litigation under the new provision will no doubt generate some of the defenses in lien foreclosure cases, in which defendants file motions to dismiss over late filing based on when the lienor actually furnished materials or services.  For example, the surety in the amended bond statute might argue that the bond claimant did not furnish services in the sense that the work on the date being counted from was remedial, or that the provision of materials was actually the strategic holding over of equipment trucks on the jobsite when in fact the bond claimant had concluded its work and hadn’t been on the job for three weeks.

             Commentators have raised questions also about the notice of the claim, whether the date of mailing of the bond claim or its receipt are the measuring point.  And there is the issue of whether the prospective application of the amendment is to public construction contracts entered into after December 31, 2011.