Payment Bond - 261

ConsensusDocs 261 is a standard payment bond form that offers crucial financial protection on construction projects by guaranteeing payment to subcontractors, laborers, and material suppliers. Specifically designed to complement the ConsensusDocs 200 and ConsensusDocs 500 series agreements, this one-page administrative contract document ensures compliance with industry best practices while maintaining simplicity and clarity.

Jointly developed and officially endorsed by the Surety & Fidelity Association of America (SFAA) and the National Association of Surety Bond Producers (NASBP), the ConsensusDocs 261 is a trusted solution used across a wide range of construction projects. This form outlines the surety’s obligation to guarantee payment on behalf of the Constructor—also known as the builder, general contractor, design-bid-builder, or construction manager. The Owner, who is the obligee, benefits from reduced exposure to claims and lien risks.

A key provision in this bond is the 90-day period in which unpaid claimants may file a claim against surety, offering a clearly defined and enforceable window to resolve payment disputes. The maximum amount covered, known as the bond sum or penal sum, is clearly established in the document, ensuring transparency and predictability in financial risk allocation.

Key Highlights:

• Compatible with ConsensusDocs 200 and 500 contract families
• Endorsed by SFAA and NASBP, ensuring legal credibility
• Guarantees payment to lower-tier project participants
• Clear 90-day claim period for unpaid parties
• Defines bond sum for maximum surety liability
• One-page form for administrative efficiency

By using ConsensusDocs 261, project Owners and Constructors gain an essential tool for mitigating financial risk, ensuring subcontractor payment, and promoting trust among all parties involved in the construction process.