This bill makes a number of changes to Florida Statute 255.05 which governs bonds on public construction projects and Chapter 713 which covers construction liens and bonds for private construction work.
Changes to Section 255.05
Under existing law, the contractor is required to record in the public records a bond issued under Section 255.05. This bill adds some enforcement to that requirement. It would allow building inspections only after a copy of the recorded bond or sworn evidence that it has been recorded has been provided. This would not prevent inspections for temporary electric service or other temporary utility service, land clearing or other preliminary site work.
There are other changes made to Section 255.05, but they generally clarify the wording without making substantive changes.
There is a change in the handling of the Notice of Contest of Claim Against a Payment Bond. Under this bill the responsibility for service of the Notice is transferred from the Clerk to the contractor or its attorney. A statutory form for the Notice to Contractor is also added.
Additional requirements would be imposed on the Notice of Nonpayment required of a claimant who is not in privity with the contractor. The Notice of Nonpayment must state, as of the date of the notice, the nature of the labor or services performed or to be performed, if any; the materials furnished; the materials to be furnished, if known; the amount paid on account to date; the amount due; the amount to become due, if known; and the date that the notice to contractor, if any, was served on the contractor. It also requires that the Notice of Nonpayment be a sworn statement. A statutory form for the Notice of Nonpayment is added by this bill. It is not clear how this improves the process since sureties uniformly require that a sworn claim be submitted with this information before any payment is made. It certainly can be argued that the main purpose is to create a way to avoid these claims.
One beneficial change would be to forbid a public authority from conditioning its payments to a contractor who has supplied a payment and performance bond on the production of a release or waiver from a claimant. A Waiver of Lien on a public project is pointless since the property cannot be liened in any event.
Changes to Chapter 713
At present, a notice regarding the operation of the Florida Construction Lien Law must be provided to owners on residential projects up to four units. That provision has been deleted and a General Statement of Owners’ Rights and Responsibilities has been substituted. The form of the General Statement is prescribed in the bill. The General Statement explains in considerable detail the operation of the Lien Law and a copy of the Notice of Commencement must be attached. Unlike the old form the General Statement is independent of the contract. The General Statement is a separate document that must be signed and dated by the owner and submitted with the permit application.
Changes are also made to the Notice to Owner which is required if the lienor is not in privity with the owner. The language regarding the importance of obtaining lien waivers upon payment has been expanded.
This bill would modify the statutory form for the Notice of Commencement by adding language advising that the Notice of Commencement must be extended if it will expire before all work is completed and final payment is made. Unless specifically stated, a Notice of Commencement expires after one year. Payments by the owner after expiration are considered improper payments.
This bill makes changes in the wording that must appear on the face of each permit card regarding the requirement to record a Notice of Commencement.
Because of the new General Statement many of the requirements of the building department to provide information to the owner have been deleted.
A new Section 713.137 entitled Prerequisites to Inspection of Improvements would be created. This generally sets forth the requirements that must be met before an inspection can be made. These requirements include a copy or verification of the recording of the Notice of Commencement. If the permit is for a commercial project there must be a copy of the contractor’s recorded payment bond or a notarized statement of the contractor or owners’ statement if a payment bond is not required. There must also be a signed copy of the General Statement of Owners’ Rights and Responsibilities, if required. The information in the Notice of Commencement must be verified by the issuing authority to be legible, complete and consistent with the building permit application. These requirements do not apply to inspections for temporary utility services, land clearing or other preliminary site work; improvements pursuant to a direct contract of less than $5,000; repair or replacement of an air conditioning unit in an amount less than $7,500; or the installation of a solar hot water system in an amount of $7,500 or less.
This bill also modifies the section regarding demands for copies of contracts and statements of account to add a requirement that the lienor include a description of the project, the names of the owners, the contractor and the lienor’s customer sufficient to identify the account in question. The statutory form for the Request for Sworn Statement of Account has been modified to include these requirements.
A lienor is also permitted to make demands for information on an owner. The ability to make that demand arises only after a Claim of Lien has been recorded. This bill would allow the demand to be made upon submission or mailing of a Claim of Lien to the Clerk for recording. This demand must also include the description of the project, the name of the contractor and the lienor’s customer sufficient for the owner to properly identify the project.
Section 713.18 sets out the manner of serving notices. This would be changed to allow service by a common carrier delivery or global express guaranteed.
This bill would allow modification of the address shown in the Notice of Commencement if it is incomplete for purposes of mailing or delivery. The address change would be based on information obtained from the property appraiser or another public record or directory. The service would still valid.
The provision that an owner’s agent may serve a Notice of Contest of a lien has been deleted. On occasion, contractors have been appointed the owner’s agent for the purpose of serving the Notice of Contest of lien. This would no longer be available.
In Section 713.23 the statutory form for Notice to Contractor would be changed to include the additional requirements for the Notice to Contractor under Section 255.05 discussed above. Additionally, the Notice of Nonpayment would also be modified to incorporate the same requirements as in the proposed modification to Section 255.05. The provisions relating to service of a Notice of Bond under Section 713.23 or a Transfer Bond under Section 713.24 have been modified to require service by the contractor or the contractor’s attorney rather than by the Clerk.