© Roetzel & Andress, LPA 2012

2012 STATUTORY

CHANGES IN FLORIDA’S

CONSTRUCTION LAWSJuly 2012

Presented by:

Thomas P. Wert, Esq.

Roetzel Introduction

With offices in four states and Washington, D.C., Roetzel offers comprehensive legal services to a broad spectrum of clients on a regional, national and international basis.

Orlando services include Construction, Business Litigation, Real Estate Development, Banking & Finance, Creditors’ Rights, Health Care, and Corporate and Business Services.

Our attorneys represent a wide range of clients, from multinational corporations to government entities, individuals and closely held businesses. The firm serves as general counsel to numerous clients and many of those relationships have existed for much of our history.

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Public Construction Bonds and Private Payment Bonds

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Changes have been made to the form required for payment and performance bonds on public projects and the enforceability of certain bond provisions

Public Construction Bonds

After October 1, 2012, the required payment and performance bond must state the bond number assigned by the surety on its front page

Before commencing work, the contractor must provide the public entity with a certified copy of the recorded bond.

Public entity now may not make a payment to the contractor until the contractor has provided the required certified copy of the recorded bond.

Public and Private Payment Bonds

§ 255.05(1)(a), Florida Statutes previously made certain bond provisions unenforceable.

After 10/01/12, provisions limiting or expanding the duration of the bond or adding conditions to the enforcement of a claim against the bond are also unenforceable.

Similar change to private payment bonds

(§ 713.23)

Public and Private Payment Bonds

§ 255.05 - contractor may shorten the one-year duration of a payment bond claim to 60 days by recording a Notice of Contest of Claim Against Payment Bond

Clerk previously required to serve a copy of the notice upon the bond claimant by mail

60-day period did not begin to run until the clerk mailed the notice

Public and Private Payment Bonds

Contractor or the contractor’s attorney now required to serve the notice, rather than the clerk

Similar provisions added to § 713.23 concerning private payment bonds

Public Construction Bonds

§ 255.05, now has new subsection 11

After 10/01/12, public entity cannot condition payments on delivery of a releases or waivers from bond claimants, if the contractor furnishes and records bond and provides a written consent from the surety.

§ 255.05 (11) also allows surety to revoke a prior consent, or direct the public authority to withhold a specified amount from a payment, by serving written notice upon the public authority

Private Payment Bonds

Section 713.23 previously provided if NOC is not recorded or a reference to the bond not given in NOC and the lienor is not notified in writing that a bond exists, the lienor has 45 days from notification of the bond’s existence to serve a NTC

§ 713.23 now provides that if NOC is not recorded with the bond before commencement of construction, a lienor not in privity with the contractor can elect to serve NTC up to 45 days after the lienor is served with a copy of the bond.

Private Payment Bonds

§ 723.23 now provides that a timely served notice to owner, which is served on the contractor, has the same effect as a notice to contractor

But NTO cannot extend the 1-year statutory limitation period for filing an action on the bond

Allows for the combination of NTO with a NTC, which may be entitled “NOTICE TO OWNER/ NOTICE TO CONTRACTOR.”

Private Payment Bonds

If bond is not recorded before construction, § 713.23 (d) now allows a claimant, at its option, to calculate the 90-day time period for serving a notice of nonpayment from either:

(1) the date of final furnishing of labor, service or materials or

(2) the date the lienor is served with a copy of the bond

But, 1 year limitations period for bringing claim cannot be extended

Public Bids

New statute - § 255.0518

Public Bids

Requires government departments or agencies to open sealed competitive bids

◦ at a public meeting

◦ announce the name of each bidder

◦ announce the price of each bid

◦ make each bidder’s name/price available upon request.

Public Bids

§ 255.0518 - effective immediately

Must be complied with notwithstanding § 119.071, F.S.

Construction Liens for Tenant Work

Section 713.10 has been

amended to clarify the extent

of liens on the interest of

landlord when a tenant makes

improvements

Abrogates Everglades Electric

Supply, Inc. v. Paraiso Granite

Construction Liens for Tenant Work

Section 713.10 now provides that a blanket notice recorded in the public records

“effectively prohibits liens for improvements made by a lessee even if other leases for the premises on the parcel do not expressly prohibit liens or if provisions of each lease restricting the application of liens are not identical.”

Notice of Commencement

Required Notice of Commencement form:

◦ Expiration Date:

… 9. Expiration date of Notice of Commencement (The expiration date will be one year from the date of recording unless a different date is specified)….

◦ Sworn statement removed:

“[U]nder penalty of perjury, I declare that I have read the foregoing Notice of Commencement and that the facts stated therein are true to the best of my knowledge and belief.”

Demand for Copy of Contract and Sworn Statement of

Account

§ 713.16 (2) -written demand by the owner must now include “a description of the property and the names of the owner, the contractor, and the lienor’s customer, as set forth in the notice to owner”

Same information also now required in any written demand for a sworn statement of account served by a contractor

Demand for Copy of Contract and Sworn Statement of

Account

§ 713.16(5) – previously allowed a lienor to serve a written demand on the owner for a written statement of various contract amounts upon recordation of the claim of lien

Now, it allows lienor to serve the written demand on the owner while lienor is perfecting a claim of lien

Written demand must now include description of property and names of contractor and lienor’s customer

Manner of Serving Notices

Notices, claims of lien and other papers served under Chapter 713 may now be served by common carrier delivery service or by Global Express Guaranteed mail paid by the sender

If the address in NOC or building permit app. is incomplete, § 713.18 allows service of notice by completing the address using information obtained from property appraiser or public record

Grandfathering - Certification of Registered Contractor

§ 489.118 reenacted for all applications submitted by November 1, 2015

Grandfathering - Certification of Registered Contractor

Licensing board required to issue certificate to registered contractor who can show:− holds a valid registered local license in a specified

category

− passed a written exam substantially similar to the exam required to be certified contractor

− at least 5 years of experience as a contractor in that contracting category

− not had contractor's license revoked

− complies with the insurance and financial responsibility requirements

Applicants wishing to obtain a certificate pursuant to this section must make application by November 1, 2005.

Notice of Termination

§ 713.132 – Owners seeking to terminate the period of effectiveness of a NOC could previously do so by recording a Notice of Termination stating that the owner served a copy upon each lienor who had “given notice” and serving the NOT upon those lienors

Now, the NOT must contain a statement that owner has served copy of notice on each lienor with direct contract with owner or each lienor who has served a notice to owner and it is not effective to terminate NOC unless those parties have been served with the NOT

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Speaker Contact Information

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Thomas P. Wert, Esq.Roetzel & Andress, LPA420 South Orange Avenue

CNL II, 7th FloorOrlando, FL 32801

Phone: 407-835-8548twert@ralaw.com