The Impact Of Corrective Work On Performance Bond Deadlines: A Case Study

The recent decision in BCC Housing Development Corp. v. LPCiminelli, Inc., entered on February 27, 2025, by the New York Supreme Court, Appellate Division, Third Department, addresses the enforcement of contractual time limits in performance bonds and clarifies when a contractor's work is considered complete under a construction contract.

BCC Housing Development Corp. ("BCC") engaged LPCiminelli, Inc. ("LPCiminelli") to construct student housing for SUNY Broome Community College. As required by the contract, LPCiminelli executed a performance bond issued by defendant Liberty Mutual Insurance Company, as surety. The bond required that any action on the bond be commenced within two years after the contractor stopped work. Substantial Completion of the project occurred in August 2014. The building housed students starting in the 2014–2015 academic year. The Final Payment was made in June 2015. However, construction defects required LPCiminelli to perform corrective