Definition of "Payment bond"

Sylvia McCabe real estate agent
Sylvia McCabe, Real Estate Agent Agents Owned Realty

Bond guaranteeing that a contractor will pay fees owed for labor and materials necessary for construction of a project. If these fees are not paid, an owner who has paid the contractor might be confronted with subcontractor's or worker's liens filed against the completed project. If this happens, the owner could end up paying many times the value of the work done.

 

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