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Can a personal judgment against construction company owner affect construction surety bond in progress?

New York, NY |

A personal judgment has been obtained against a construction company owner. How this personal judgment affects construction surety bond previously obtained by the company's owner for an ongoing construction project performed by his construction company?

Attorney Answers 3


This is a very complex question, especially in NY given the lien laws. One would surmise that if there are judgments against the company, there are what are called "3-A liens" as well. As such, there may be no surety protection, but that will depend on the language in the bond documents.

I work with others who know this area well and handle NY matters. If I can assist, let me know.

The foregoing is not legal advice nor is it in any manner whatsoever meant to create or impute an attorney/client relationship.

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You need to provide a lot more information to be able to answer this question. However, in general the construction principal will need to review the terms of the agreement with the surety. It will likely contain a section on what constitutes a default and you will need to see if a judgment against the principal (who almost certainly is personally guaranteeing the bond) is a default. For future bonds, the judgment against the principal will likely be a significant issue as it goes to credit worthiness.

Feel free to contact me for more information and to discuss your particular situation.

The information provided herein is for informational purposes only and does not constitute legal advice. No attorney-client relationship is created by this answer. You should consult with a local attorney regarding your specific situation to obtain legal advice.

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I'm licensed in California and agree with counsel. To give you a comprehensive answer, a lawyer would have to review the paperwork involved and advise you as to how to proceed and your best course of action.

You are welcome to call Ms. Johns' offices for a free or low cost consultation at (866) 402-4038. Please note that Ms. Johns is a lawyer although she is not your lawyer unless you have signed a written fee or letter agreement confirming her office's representation of you. This email does not otherwise constitute legal advice or create an attorney-client relationship.

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