The 2005 Legislature more than made up for the failure of the 2004 session to produce much legislation affecting the construction industry. Due to space limitations we are providing the highlights of these bills. At press time many of these bills have not been taken up by the Governor so they are subject to veto. The full text of the bills can be found at http://www.leg.state.fl.us/Welcome/index.cfm.
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The Florida Local Government Prompt Payment
Act was revised and a similar one created for state
projects. It addresses withholding and release of
retainage, creation and completion of a final punchlist, and
time periods within which final payment m ust be made.
One of its primary features is to put an end to the
"rolling" punchlist. A single punchlist must be generated
and payment made on completion of the single punchlist.
Any deficiencies discovered after the punchlist is prepared
become warranty items. It also shortens the time for
contractors to make downstream payments from 15 days
to 10 days from receipt of payment and subcontractors
must pay downstream within 7 days. If money is not to be
paid to a subcontractor, it must be held by the public
owner and not the contractor. Retainage will be 10% until
50% completion after that 5% can be withheld. After 50%
completion the contractor may withhold retainage from
specific subcontractors at a rate higher than 5% only for a
good cause, on a case-by-case basis. Public owners may
not hold retainage to secure a warranty.
Download House Bill 509 PDF
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This is an 85-page bill addressing a number of issues. Among other changes are:
• The Florida Building Code, 2004 edition, becomes effective October 1, 2005.
• It is a disciplinary violation for a building code
administrator, engineer or registered architect to perform
inspections without the necessary insurance.
• Cities and counties are barred from imposing additional
requirements on certified electrical contractors.
• Sets procedures for binding review of code
interpretations by local building officials.
• Private providers of code inspection services are no
longer required to have general liability insurance, but
professional liability coverage requirements are increased.
• Restricts ability of local building officials to obstruct the
use of a private provider of inspections.
• Requires posting of contact information for the private
provider with a description of the services.
• Private inspectors must be em ployees of the provider.
• The audit procedures by local officials of private
providers is changed from required to permissive.
• Work may now proceed after an inspection by a private
provider and may not be delayed for completion of an
audit inspection by building officials. Building officials have
tried to limit the use of private providers by auditing all
inspections. W ork had to be held open until the audit was
completed.
• Forbids use of building code fees for activities not
related to review and inspection.
Download Senate Bill 442 PDF
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For the first time in several years, the legislature has made changes to the lien and bond laws. These changes are generally as follows:
• Amends Section 255.05 to forbid bonds that restrict
claims from any of the claimants defined in Section 713.01
nor may the bond restrict the venue of any action under
the bond.
• Amends Section 713.05 which requires that an
explanation of the lien law be provided in any contract
between an owner and a contractor for up to four
residential units. The explanation may now be in 14 point
type (down from 18 point) and must be on the front page
of the contract. There are also changes in the wording of
the explanation. Clarifies that the failure to provide the
explanation does not affect the rights of lienors who are
not in privity with the owner.
• Amends Section 713.02 to make it clear that the
absence of a license by a contractor, subcontractor or
sub-subcontractor does not affect anyone else's rights to
lien or contract claims. It prohibits a surety from defending
claims on the basis that its principal was not properly
licensed.
• Section 713.04, regarding subdivision improvements,
now requires a Final Contractors Affidavit. Without it the
final payment is an improper payment.
• The procedure for using a payment bond issued under
section 713.23, but not recorded with the Notice of
Commencement has been clarified. 713.23 allows the
unrecorded bond to be used as a transfer bond. This
implied that the bond transfer procedures of 712.24 were
to be followed to effect the transfer of the bond. Now the
Notice of Bond pursuant to 713.23(2) is to be used to
make the transfer. Time limits for serving notices are
changed to the later of the time specified in 713.23 or the
date the Notice of Bond is served on the lienor.
• Section 713.23 relating to Notice of Contest of Claim
Against Payment Bond makes it clear that such a notice
can be served at any time after a Notice of Nonpayment
has been served.
• For suits on lien and bond claims, there was a question
about the jurisdiction of county courts in these matters. It
is now clear that county courts share jurisdiction with the
circuit courts for claims below $15,000.00.
• Less than 713.24 where a suit to enforce a lien has been
tim ely filed and during the suit the lien is transferred to a
bond, an action commenced within one year after the
transfer shall be deemed filed as of the date of filing of the
suit to enforce the lien. The exception is where there is a
Notice of Contest of Bond.
• Increases penalties for misapplication of funds.
Misapplication of a total value of $1,000, but less than
$100,000, is a second degree felony. Previously the range
for a second degree felony was $20,000 to $100,000.
Less than $1,000 is a third degree felony.
• Section 713.3471 sets forth the lender's responsibilities
when disbursing construction loans. The lender was
required to provide a warning regarding the need for lien
releases every time a disbursement was made. This
requirement is now restricted to residential real property
owned by a natural person. It also permits delivery of the
warning by mail, e-mail or facsimile.
Download House Bill 113 PDF
This bill creates standards for residential home
inspectors. Certain educational and examination
requirements must be met to perform this service. It also
requires continuing education and a commercial general
liability policy of at least $300,000. The bill does not
provide for regulation by any state entity but does specify
that violations of the standards will be treated as a
violation of the Deceptive and Unfair Trade Practices Act.
Contractors are not exempt from these requirements
unless their work is within the scope of their license.
This bill also creates a mold assessment
certification and a mold remediation certification for
contractors who wish to focus on mold inspection or mold
remediation that is not incidental to the scope of his or her
license. An educational course is required. Certification
requirements are established for any person that perform s
or directly supervises a mold assessment or for any
person that perform s mold remediation.
Download House Bill 315 PDF
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This bill allows reinstatement of licenses issued by
the Department of Business and Professional Regulations
or any of its Boards, where they have become delinquent
due to illness or unusual hardship. It requires a good faith
effort to comply with the license requirements. As
presently structured, failure to renew the license puts it in
delinquent status. If a licensee fails to renew the license
before the expiration of the next license cycle, the license
becomes void. There is presently no procedure that
perm its DBPR or a professional board to consider
hardship or unusual circumstances in a failure to renew a
license. This bill will allow reinstatement without having to
meet current education standards or to retake an
examination.
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This bill expands licensing scopes for different
contractors or professionals.
For plumbers, mechanical contractors, and Class
A and B air conditioning and heating contractors, the
scope of work authorized under their respective licenses
has been expanded. Plumbers can now install liquid
propane (LP) lines, in addition to natural gas lines.
Mechanical contractors also can now install LP lines, in
addition to gas lines, in new buildings. Class A and B air
conditioning and heating contractors can now disconnect
and reconnect LP and natural gas lines when installing
replacement air conditioning and heating systems.
For those individuals holding a license or permit
for the installation of pre-engineered fire suppression
systems, Chapter 489, was amended so that the statute
can no longer be interpreted to also require a construction
contracting license.
Architects, interior designers, and landscape
architects can now electronically sign and seal their plans
and documents.
Download House Bill 213 PDF
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Two amendments were made to Section 718.301,
which generally requires certain procedures for the
transfer of control for condominiums from the developer to
the association.
First, the revised statute now explicitly holds the
developer responsible to the association and its members
for all actions taken by the board of administration
designated by the developer, until the unit owners have
elected a majority of the board.
Second, a new requirement has been imposed on
condominium associations bringing claims against
developers. Any claims asserted against the developer by
a condominium alleging a defect in design, structural
elements, construction, mechanical, electrical, fire
protection, plumbing, or other element requiring a
construction license must be "exam ined and certified by
an appropriately licensed Florida engineer, design
professional, contractor, or otherwise licensed Florida
individual or entity." Presumably the required certification
will attest to the legitimacy of the alleged defect, since the
revised statute does not indicate exactly what the
certification m ust say.
Download House Bill 291 PDF
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The Florida Legislature made revisions to Section 255.05, which requires payment bonds on public construction projects. Two changes were made to the form of public construction bonds:
- A space for inserting the bond number is now provided, and
- Warning language that any action by any claimant against the bond must be in accordance with the notice and time limitations of Section 255.05(2) is now mandatory.
The Legislature also addressed an issue currently
pending before the Florida Supreme Court. Paragraph 4
of Section 255.05 was revised to require that the payment
bond provisions of all bonds required by the section be
"construed and deemed statutory payment bonds...and
such bonds shall not under any circumstances be
converted into common law bonds." The clarification will
make uniform the application of the time requirements of
Section 255.05 to make a claim the bond. Claimants will
no longer be able to get longer notice periods by arguing
that a public bond became a "common law" bond.
Last, the Legislature also clarified that sureties
issuing payment or performance bonds for the
construction or maintenance of a building or roadway
project are not "insurers" for purposes of the civil remedies
provision of Florida law. The civil remedies statute
generally imposes a duty on insurance companies to settle
claims within policy lim its, in good faith and with due
regard to the interests of the insureds. This change was
made to deal with a case where a surety company was
held liable for bad faith subjecting it to punitive damages.
The concern to contractors was whether they would be
liable for these dam ages under their indemnity agreement.
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