We are pleased to bring you our
1999 Legislative Update. Every year the Florida
Legislature tinkers with some of the statutes
that govern the construction industry. While this
is always a concern, we seemed to have done reasonably
well this year. There are the usual changes in
the Lien law as well as changes to the licensing
laws. The big news is the Miorelli "fix." As this
legislation progressed it did not appear to be
of much help. However, during the legislative
process there were significant changes so that
in the final analysis it looks to be an improvement.
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House Bill 311 is a codification
and an improvement on the recent decision by the
Florida Supreme Court in County of Brevard v.
Miorelli Engineering, Inc., 703 So. 2d 1049 (Fla.
1997). The court held that a public body was subject
to the implied covenants of good faith and fair
dealing that exist in every contract, but it had
no obligation to pay for any extra work for which
a change order was not executed.
This bill codifies the obligation
of good faith and fair dealing arising from the
breach of an express provision or an implied covenant
of a written agreement or a written directive
issued by the public authority pursuant to the
written agreement. It further provides that the
public authority and the contractor have all of
the same rights and obligations as a private party
under a similar contract, with the exception that
any attempted oral modification of either the
written contract or written directive will not
be binding.
For those working on public projects,
this means that a written directive to perform
extra work should be sufficient to allow you to
recover for that work. Note that this section
applies only to contracts entered into on or after
July 1, 1999. Consequently, it has no impact on
any current contract disputes or existing projects.
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Senate Bill 2268 directs the Construction
Industry Licensing Board and the Electrical Contractors
Licensing Board to establish a job scope for each
license category. The purpose is to establish
uniformity of job scopes between the state and
local jurisdictions. It also provides a procedure
for converting from a registered contractor to
a certified contractor. This requires application
to the CILB or the EILB and meeting the following
requirements:
1. A valid registered license in
one of the categories for which the CILB or EILB
issue licenses.
2. Passage of a written examination
substantially similar to the examination required
to be licensed as a certified contractor.
3. Five years experience as a contractor
in the category to be licensed. Only time periods
when the license is active and the contractor
is not on probation will count.
4. No revocation of the license
at any time or suspension within the past five
years, or assessed a fine in excess of $500.00
within the past five years.
5. Meet the requirements for insurance
and financial responsibility under the state statute.
This Bill also directs that a study
be conducted to determine the fiscal impact on
local governments of instituting a single tier
regulatory system for construction, electrical
and alarm system contractors. It contemplates
that the system would be established by prohibiting,
as of a certain date, issuance of any new local
licenses in any categories licensed by the state.
This report must be submitted to the Legislature
by December 1, 1999.
This is clearly intended to set
the stage for a single tier licensing system.
It provides that existing locally licensed construction,
electrical and alarm subcontractors will have
the option of continuing and concluding their
careers as locally licensed registered contractors.
It should not be assumed that the
Legislature will necessarily either adopt a single
tier regulatory system or follow the pattern set
out in this Bill.
This Bill also adds some help in
avoiding paying for more than one occupational
license. By statute, once a business has paid
an occupational license tax for the current year,
it cannot be required to pay it in any other jurisdiction.
This statute has not always been followed by local
jurisdictions. This statute now allows any contractor
who is required to pay an additional tax, standing
to sue and recover attorneys' fees.
This Bill also provides that a contractor
does not commit a disciplinary violation when
relying on a building code interpretation rendered
by a building official or someone authorized to
enforce the building code in the absence of fraud
or deceit by the contractor or gross negligence
by the building official.
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Section 255.05 relating to bonds
on public projects has been amended to provide
for services of any notices in accordance with
section 713.18. That section generally provides
for three methods of service:
1. Actual delivery.
2. Certified Mail with a return
receipt.
3. Posting on the property.
In addition section 713.18 was amended
to allow service by overnight or second day mail.
In any event, it is clear that all bond notices
should now be sent by one of these methods. We
continue to recommend the use of Certified Mail
with a return receipt as the best of these methods.
Many of the amendments contained
in this Bill relate to the timing of the service
of Notice of Nonpayment or recording of a Claim
of Lien. Some case law has suggested that the
90-day period for each of these may not begin
until a Certificate of Substantial Completion
or a Certificate of Occupancy has been issued.
This Bill eliminates use of those milestones for
determining the time for service or recording.
It now requires that any service of Notice of
Nonpayment or recording of a Claim of Lien must
be within 90 days from the last day of furnishing
labor, services or material by the claimant.
Section 713.06 provides for service
of a Notice to Owner. That section provided that
the notice had to be substantially in the form
provided in the statute. In some cases it was
held that a failure to use the form in the statute
meant that the Notice to Owner was not proper.
This resulted in the loss of all lien rights.
The statute now provides that the notice "may"
be in substantially the form provided by the statute,
but it must include the information in the warnings
contained in the statutory form. Presumably this
means that some variation in the middle part of
the Notice to Owner would be tolerated. It is
our recommendation that you continue to use the
statutory form to avoid any difficulties.
This Bill now specifically provides
that the form of the Notice to Contractor under
section 713.23 or section 255.05 may be combined
with the Notice to Owner. This is a practice that
has been going on for many years and we are not
aware of any problems as a result. However, this
should resolve any issue in the future. See our
website for a copy of this form.
Section 713.13 sets out a statutory
form for Notice of Commencement without an absolute
requirement that the form be used. This Bill amends
the statute to specifically identify the items
that must be contained within the Notice of Commencement.
These are as follows:
1. The name and address of the owner.
2. The name and address of the contractor.
3. The location or address of the
property being improved.
The authority issuing the building
permit is now required to verify that these items
in the Notice of Commencement are consistent with
the information contained in the building permit
application.
An exemption to the requirement
for a Notice of Commencement was created for a
direct contract to repair or replace an existing
heating or air-conditioning system for less than
$5,000.00.
Section 713.16 allows for a demand
for copies of contracts and other information.
This Bill amends that to specify exactly what
information is required. It further goes on to
change existing law so that the failure to furnish
the statement under oath does not invalidate the
lien. This particular amendment is deemed remedial
in nature. This means that it becomes effective
immediately upon becoming law and will apply retroactively
to May 4, 1994.
A provision has been added to section
713.23 making it clear that a Waiver and Release
of Lien also constitutes a waiver and release
of the right to make a claim against a payment
bond under section 713.23.
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Venue is the place where a lawsuit
to enforce a contract may be brought. Venue is
usually in the county where the defendant resides
or where the case arose (generally the location
of the project).
However, the parties to a contract
have the ability to specify in their contract
another venue for any litigation. This has occasionally
resulted in out of state contractors requiring
venue where their home office is located rather
than in Florida.
The law in Florida has been that
where the parties agree to venue, then it is enforceable.
House Bill 681 outlaws this practice. Suit must
be filed either where the defendant resides or
where the property is located. This only applies
to venue outside of Florida. For example, a contractor
located in Tampa could still agree to venue being
in Miami.
If you need additional information, please contact
our office and we will be happy to assist
you.
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