| 1 | Representative Dean offered the following: |
| 2 |
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| 3 | Amendment (with title amendment) |
| 4 | Remove the entire body and insert: |
| 5 | Section 1. Section 218.70, Florida Statutes, is amended to |
| 6 | read: |
| 7 | 218.70 Popular name Short title.--This part may be cited |
| 8 | as the "Local Government Florida Prompt Payment Act." |
| 9 | Section 2. Subsections (2), (6), and (7) of section |
| 10 | 218.72, Florida Statutes, are amended, and subsection (10) is |
| 11 | added to that section, to read: |
| 12 | 218.72 Definitions.--As used in this part: |
| 13 | (2) "Local governmental entity" means a county or |
| 14 | municipal government, school board, school district, authority, |
| 15 | special taxing district, other political subdivision, or any |
| 16 | office, board, bureau, commission, department, branch, division, |
| 17 | or institution thereof or any project supported by county or |
| 18 | municipal funds. |
| 19 | (6) "Vendor" means any person who sells goods or services, |
| 20 | sells or leases personal property, or leases real property |
| 21 | directly to a local governmental entity. The term includes any |
| 22 | person who provides waste-hauling services to residents or |
| 23 | businesses located within the boundaries of a local government |
| 24 | pursuant to a contract or local ordinance. |
| 25 | (7) "Construction services" means all labor, services, and |
| 26 | materials provided in connection with the construction, |
| 27 | alteration, repair, demolition, reconstruction, or any other |
| 28 | improvements to real property that require a license under parts |
| 29 | I and II of chapter 489. |
| 30 | (10) "Contractor" or "provider of construction services" |
| 31 | means any person who contracts directly with a local |
| 32 | governmental entity to provide construction services. |
| 33 | Section 3. Subsection (6) of section 218.735, Florida |
| 34 | Statutes, is amended, present subsection (7) of that section is |
| 35 | redesignated as subsection (9), and new subsections (7) and (8) |
| 36 | are added to that section, to read: |
| 37 | 218.735 Timely payment for purchases of construction |
| 38 | services.-- |
| 39 | (6) When a contractor receives payment from a local |
| 40 | governmental entity for labor, services, or materials furnished |
| 41 | by subcontractors and suppliers hired by the contractor, the |
| 42 | contractor shall remit payment due to those subcontractors and |
| 43 | suppliers within 10 15 days after the contractor's receipt of |
| 44 | payment. When a subcontractor receives payment from a contractor |
| 45 | for labor, services, or materials furnished by subcontractors |
| 46 | and suppliers hired by the subcontractor, the subcontractor |
| 47 | shall remit payment due to those subcontractors and suppliers |
| 48 | within 7 15 days after the subcontractor's receipt of payment. |
| 49 | Nothing herein shall prohibit a contractor or subcontractor from |
| 50 | disputing, pursuant to the terms of the relevant contract, all |
| 51 | or any portion of a payment alleged to be due to another party. |
| 52 | In the event of such a dispute, the contractor or subcontractor |
| 53 | may withhold the disputed portion of any such payment if the |
| 54 | contractor or subcontractor notifies the party whose payment is |
| 55 | disputed, in writing, of the amount in dispute and the actions |
| 56 | required to cure the dispute. The contractor or subcontractor |
| 57 | must pay all undisputed amounts due within the time limits |
| 58 | imposed by this section. |
| 59 | (7)(a) Each contract for construction services between a |
| 60 | local governmental entity and a contractor must provide for the |
| 61 | development of a list of items required to render complete, |
| 62 | satisfactory, and acceptable the construction services purchased |
| 63 | by the local governmental entity. The contract must specify the |
| 64 | process for the development of the list, including |
| 65 | responsibilities of the local governmental entity and the |
| 66 | contractor in developing and reviewing the list and a reasonable |
| 67 | time for developing the list, as follows: |
| 68 | 1. For construction projects with an estimated cost of |
| 69 | less than $10 million, within 30 calendar days after reaching |
| 70 | substantial completion of the construction services purchased as |
| 71 | defined in the contract, or, if not defined in the contract, |
| 72 | upon reaching beneficial occupancy or use; or |
| 73 | 2. For construction projects with an estimated cost of $10 |
| 74 | million or more, within 30 calendar days, unless otherwise |
| 75 | extended by contract not to exceed 60 calendar days, after |
| 76 | reaching substantial completion of the construction services |
| 77 | purchased as defined in the contract, or, if not defined in the |
| 78 | contract, upon reaching beneficial occupancy or use. |
| 79 | (b) If the contract between the local governmental entity |
| 80 | and the contractor relates to the purchase of construction |
| 81 | services on more than one building or structure, or involves a |
| 82 | multiphased project, the contract shall provide for the |
| 83 | development of a list of items required to render complete, |
| 84 | satisfactory, and acceptable all the construction services |
| 85 | purchased pursuant to the contract for each building, structure, |
| 86 | or phase of the project within the time limitations provided in |
| 87 | paragraph (a). |
| 88 | (c) The failure to include any corrective work or pending |
| 89 | items not yet completed on the list developed pursuant to this |
| 90 | subsection does not alter the responsibility of the contractor |
| 91 | to complete all the construction services purchased pursuant to |
| 92 | the contract. |
| 93 | (d) Upon completion of all items on the list, the |
| 94 | contractor may submit a payment request for all remaining |
| 95 | retainage withheld by the local governmental entity pursuant to |
| 96 | this section. If a good-faith dispute exists as to whether one |
| 97 | or more items identified on the list have been completed |
| 98 | pursuant to the contract, the local governmental entity may |
| 99 | continue to withhold an amount not to exceed 150 percent of the |
| 100 | total costs to complete such items. |
| 101 | (e) All items that require correction under the contract |
| 102 | and that are identified after the preparation and delivery of |
| 103 | the list remain the obligation of the contractor as defined by |
| 104 | the contract. |
| 105 | (f) Warranty items may not affect the final payment of |
| 106 | retainage as provided in this section or as provided in the |
| 107 | contract between the contractor and its subcontractors and |
| 108 | suppliers. |
| 109 | (g) Retainage may not be held by a local governmental |
| 110 | entity or a contractor to secure payment of insurance premiums |
| 111 | under a consolidated insurance program or series of insurance |
| 112 | policies issued to a local governmental entity or a contractor |
| 113 | for a project or group of projects, and the final payment of |
| 114 | retainage as provided in this section may not be delayed pending |
| 115 | a final audit by the local governmental entity's or contractor's |
| 116 | insurance provider. |
| 117 | (h) If a local governmental entity fails to comply with |
| 118 | its responsibilities to develop the list required under |
| 119 | paragraph (a) or paragraph(b), as defined in the contract, |
| 120 | within the time limitations provided in paragraph (a), the |
| 121 | contractor may submit a payment request for all remaining |
| 122 | retainage withheld by the local governmental entity pursuant to |
| 123 | this section. The local governmental entity need not pay or |
| 124 | process any payment request for retainage if the contractor has, |
| 125 | in whole or in part, failed to cooperate with the local |
| 126 | governmental entity in the development of the list or failed to |
| 127 | perform its contractual responsibilities, if any, with regard to |
| 128 | the development of the list or if paragraph (8)(f) applies. |
| 129 | (8)(a) With regard to any contract for construction |
| 130 | services, a local governmental entity may withhold from each |
| 131 | progress payment made to the contractor an amount not exceeding |
| 132 | 10 percent of the payment as retainage to ensure the |
| 133 | satisfactory completion of the construction services purchased |
| 134 | pursuant to the contract until 50-percent completion of such |
| 135 | services. |
| 136 | (b) After 50-percent completion of the construction |
| 137 | services purchased pursuant to the contract, the local |
| 138 | governmental entity must reduce to 5 percent the amount of |
| 139 | retainage withheld from each subsequent progress payment made to |
| 140 | the contractor. For purposes of this subsection, the term "50- |
| 141 | percent completion" has the meaning set forth in the contract |
| 142 | between the local governmental entity and the contractor, or, if |
| 143 | not defined in the contract, the point at which the local |
| 144 | governmental entity has expended 50 percent of the total cost of |
| 145 | the construction services purchased as identified in the |
| 146 | contract together with all costs associated with existing change |
| 147 | orders and other additions or modifications to the construction |
| 148 | services provided for in the contract. However, notwithstanding |
| 149 | this subsection, a municipality with a population of 25,000 or |
| 150 | fewer, or a county with a population of 100,000 or fewer, may |
| 151 | withhold retainage in an amount not exceeding 10 percent of each |
| 152 | progress payment made to the contractor until final completion |
| 153 | and acceptance of the project by the local governmental entity. |
| 154 | (c) After 50-percent completion of the construction |
| 155 | services purchased pursuant to the contract, the contractor may |
| 156 | elect to withhold retainage from payments to its subcontractors |
| 157 | at a rate higher than 5 percent. The specific amount to be |
| 158 | withheld must be determined on a case-by-case basis and must be |
| 159 | based on the contractor's assessment of the subcontractor's past |
| 160 | performance, the likelihood that such performance will continue, |
| 161 | and the contractor's ability to rely on other safeguards. The |
| 162 | contractor shall notify the subcontractor, in writing, of its |
| 163 | determination to withhold more than 5 percent of the progress |
| 164 | payment and the reasons for making that determination, and the |
| 165 | contractor may not request the release of such retained funds |
| 166 | from the local governmental entity. |
| 167 | (d) After 50-percent completion of the construction |
| 168 | services purchased pursuant to the contract, the contractor may |
| 169 | present to the local governmental entity a payment request for |
| 170 | up to one-half of the retainage held by the local governmental |
| 171 | entity. The local governmental entity shall promptly make |
| 172 | payment to the contractor, unless the local governmental entity |
| 173 | has grounds, pursuant to paragraph (f), for withholding the |
| 174 | payment of retainage. If the local governmental entity makes |
| 175 | payment of retainage to the contractor under this paragraph |
| 176 | which is attributable to the labor, services, or materials |
| 177 | supplied by one or more subcontractors or suppliers, the |
| 178 | contractor shall timely remit payment of such retainage to those |
| 179 | subcontractors and suppliers. |
| 180 | (e) This section does not prohibit a local governmental |
| 181 | entity from withholding retainage at a rate less than 10 percent |
| 182 | of each progress payment, from incrementally reducing the rate |
| 183 | of retainage pursuant to a schedule provided for in the |
| 184 | contract, or from releasing at any point all or a portion of any |
| 185 | retainage withheld by the local governmental entity which is |
| 186 | attributable to the labor, services, or materials supplied by |
| 187 | the contractor or by one or more subcontractors or suppliers. If |
| 188 | a local governmental entity makes any payment of retainage to |
| 189 | the contractor which is attributable to the labor, services, or |
| 190 | materials supplied by one or more subcontractors or suppliers, |
| 191 | the contractor shall timely remit payment of such retainage to |
| 192 | those subcontractors and suppliers. |
| 193 | (f) This section does not require the local governmental |
| 194 | entity to pay or release any amounts that are the subject of a |
| 195 | good-faith dispute, the subject of an action brought pursuant to |
| 196 | s. 255.05, or otherwise the subject of a claim or demand by the |
| 197 | local governmental entity or contractor. |
| 198 | (g) The time limitations set forth in this section for |
| 199 | payment of payment requests apply to any payment request for |
| 200 | retainage made pursuant to this section. |
| 201 | (h) Paragraphs (a)-(d) do not apply to construction |
| 202 | services purchased by a local governmental entity which are paid |
| 203 | for, in whole or in part, with federal funds and are subject to |
| 204 | federal grantor laws and regulations or requirements that are |
| 205 | contrary to any provision of the Local Government Prompt Payment |
| 206 | Act. |
| 207 | (i) This subsection does not apply to any construction |
| 208 | services purchased by a local governmental entity if the total |
| 209 | cost of the construction services purchased as identified in the |
| 210 | contract is $200,000 or less. |
| 211 | Section 4. Section 255.0705, Florida Statutes, is created |
| 212 | to read: |
| 213 | 255.0705 Popular name.--Sections 255.0705-255.078 may be |
| 214 | cited as the "Florida Prompt Payment Act." |
| 215 | Section 5. Subsections (2) and (3) of section 255.071, |
| 216 | Florida Statutes, are amended to read: |
| 217 | 255.071 Payment of subcontractors, sub-subcontractors, |
| 218 | materialmen, and suppliers on construction contracts for public |
| 219 | projects.-- |
| 220 | (2) The failure to pay any undisputed obligations for such |
| 221 | labor, services, or materials within 30 days after the date the |
| 222 | labor, services, or materials were furnished and payment for |
| 223 | such labor, services, or materials became due, or within the |
| 224 | time limitations set forth in s. 255.073(3) 30 days after the |
| 225 | date payment for such labor, services, or materials is received, |
| 226 | whichever last occurs, shall entitle any person providing such |
| 227 | labor, services, or materials to the procedures specified in |
| 228 | subsection (3) and the remedies provided in subsection (4). |
| 229 | (3) Any person providing labor, services, or materials for |
| 230 | the construction of a public building, for the prosecution and |
| 231 | completion of a public work, or for repairs upon a public |
| 232 | building or public work improvements to real property may file a |
| 233 | verified complaint alleging: |
| 234 | (a) The existence of a contract for providing such labor, |
| 235 | services, or materials to improve real property. |
| 236 | (b) A description of the labor, services, or materials |
| 237 | provided and alleging that the labor, services, or materials |
| 238 | were provided in accordance with the contract. |
| 239 | (c) The amount of the contract price. |
| 240 | (d) The amount, if any, paid pursuant to the contract. |
| 241 | (e) The amount that remains unpaid pursuant to the |
| 242 | contract and the amount thereof that is undisputed. |
| 243 | (f) That the undisputed amount has remained due and |
| 244 | payable pursuant to the contract for more than 30 days after the |
| 245 | date the labor or services were accepted or the materials were |
| 246 | received. |
| 247 | (g) That the person against whom the complaint was filed |
| 248 | has received payment on account of the labor, services, or |
| 249 | materials described in the complaint and, as of the date the |
| 250 | complaint was filed, has failed to make payment within the time |
| 251 | limitations set forth in s. 255.073(3) more than 30 days prior |
| 252 | to the date the complaint was filed. |
| 253 | Section 6. Section 255.072, Florida Statutes, is created |
| 254 | to read: |
| 255 | 255.072 Definitions.--As used in ss. 255.073-255.078, the |
| 256 | term: |
| 257 | (1) "Agent" means project architect, project engineer, or |
| 258 | any other agency or person acting on behalf of a public entity. |
| 259 | (2) "Construction services" means all labor, services, and |
| 260 | materials provided in connection with the construction, |
| 261 | alteration, repair, demolition, reconstruction, or any other |
| 262 | improvements to real property. The term "construction services" |
| 263 | does not include contracts or work performed for the Department |
| 264 | of Transportation. |
| 265 | (3) "Contractor" means any person who contracts directly |
| 266 | with a public entity to provide construction services. |
| 267 | (4) "Payment request" means a request for payment for |
| 268 | construction services which conforms with all statutory |
| 269 | requirements and with all requirements specified by the public |
| 270 | entity to which the payment request is submitted. |
| 271 | (5) "Public entity" means the state, or any office, board, |
| 272 | bureau, commission, department, branch, division, or institution |
| 273 | thereof, but does not include a local governmental entity as |
| 274 | defined in s. 218.72. |
| 275 | (6) "Purchase" means the purchase of construction |
| 276 | services. |
| 277 | Section 7. Section 255.073, Florida Statutes, is created |
| 278 | to read: |
| 279 | 255.073 Timely payment for purchases of construction |
| 280 | services.-- |
| 281 | (1) Except as otherwise provided in ss. 255.072-255.078, |
| 282 | s. 215.422 governs the timely payment for construction services |
| 283 | by a public entity. |
| 284 | (2) If a public entity disputes a portion of a payment |
| 285 | request, the undisputed portion must be timely paid. |
| 286 | (3) When a contractor receives payment from a public |
| 287 | entity for labor, services, or materials furnished by |
| 288 | subcontractors and suppliers hired by the contractor, the |
| 289 | contractor shall remit payment due to those subcontractors and |
| 290 | suppliers within 10 days after the contractor's receipt of |
| 291 | payment. When a subcontractor receives payment from a contractor |
| 292 | for labor, services, or materials furnished by subcontractors |
| 293 | and suppliers hired by the subcontractor, the subcontractor |
| 294 | shall remit payment due to those subcontractors and suppliers |
| 295 | within 7 days after the subcontractor's receipt of payment. This |
| 296 | subsection does not prohibit a contractor or subcontractor from |
| 297 | disputing, pursuant to the terms of the relevant contract, all |
| 298 | or any portion of a payment alleged to be due to another party |
| 299 | if the contractor or subcontractor notifies the party whose |
| 300 | payment is disputed, in writing, of the amount in dispute and |
| 301 | the actions required to cure the dispute. The contractor or |
| 302 | subcontractor must pay all undisputed amounts due within the |
| 303 | time limits imposed by this subsection. |
| 304 | (4) All payments due for the purchase of construction |
| 305 | services and not made within the applicable time limits shall |
| 306 | bear interest at the rate specified in s. 215.422. After July 1, |
| 307 | 2005, such payments shall bear interest at the rate of 1 percent |
| 308 | per month, to the extent that the Chief Financial Officer's |
| 309 | replacement project for the state's accounting and cash |
| 310 | management systems (Project ASPIRE) is operational for the |
| 311 | particular affected public entities. After January 1, 2006, all |
| 312 | such payments due from public entities shall bear interest at |
| 313 | the rate of 1 percent per month. |
| 314 | Section 8. Section 255.074, Florida Statutes, is created |
| 315 | to read: |
| 316 | 255.074 Procedures for calculation of payment due dates.-- |
| 317 | (1) Each public entity shall establish procedures whereby |
| 318 | each payment request received by the public entity is marked as |
| 319 | received on the date on which it is delivered to an agent or |
| 320 | employee of the public entity or of a facility or office of the |
| 321 | public entity. |
| 322 | (2) If the terms under which a purchase is made allow for |
| 323 | partial deliveries and a payment request is submitted for a |
| 324 | partial delivery, the time for payment for the partial delivery |
| 325 | must be calculated from the time of the partial delivery and the |
| 326 | submission of the payment request. |
| 327 | (3) A public entity must submit a payment request to the |
| 328 | Chief Financial Officer for payment no more than 20 days after |
| 329 | receipt of the payment request. |
| 330 | Section 9. Section 255.075, Florida Statutes, is created |
| 331 | to read: |
| 332 | 255.075 Mandatory interest.--A contract between a public |
| 333 | entity and a contractor may not prohibit the collection of late |
| 334 | payment interest charges authorized under s. 255.073(4). |
| 335 | Section 10. Section 255.076, Florida Statutes, is created |
| 336 | to read: |
| 337 | 255.076 Improper payment request; resolution of disputes.- |
| 338 | - In an action to recover amounts due for construction services |
| 339 | purchased by a public entity, the court shall award court costs |
| 340 | and reasonable attorney's fees, including fees incurred through |
| 341 | any appeal, to the prevailing party, if the court finds that the |
| 342 | nonprevailing party withheld any portion of the payment that is |
| 343 | the subject of the action without any reasonable basis in law or |
| 344 | fact to dispute the prevailing party's claim to those amounts. |
| 345 | Section 11. Section 255.077, Florida Statutes, is created |
| 346 | to read: |
| 347 | 255.077 Project closeout and payment of retainage.-- |
| 348 | (1) Each contract for construction services between a |
| 349 | public entity and a contractor must provide for the development |
| 350 | of a list of items required to render complete, satisfactory, |
| 351 | and acceptable the construction services purchased by the public |
| 352 | entity. The contract must specify the process for the |
| 353 | development of the list, including responsibilities of the |
| 354 | public entity and the contractor in developing and reviewing the |
| 355 | list and a reasonable time for developing the list, as follows: |
| 356 | 1. For construction projects with an estimated cost of |
| 357 | less than $10 million, within 30 calendar days after reaching |
| 358 | substantial completion of the construction services purchased as |
| 359 | defined in the contract, or, if not defined in the contract, |
| 360 | upon reaching beneficial occupancy or use; or |
| 361 | 2. For construction projects with an estimated cost of $10 |
| 362 | million or more, within 30 calendar days, unless otherwise |
| 363 | extended by contract not to exceed 60 calendar days, after |
| 364 | reaching substantial completion of the construction services |
| 365 | purchased as defined in the contract, or, if not defined in the |
| 366 | contract, upon reaching beneficial occupancy or use. |
| 367 | (2) If the contract between the public entity and the |
| 368 | contractor relates to the purchase of construction services on |
| 369 | more than one building or structure, or involves a multiphased |
| 370 | project, the contract shall provide for the development of a |
| 371 | list of items required to render complete, satisfactory, and |
| 372 | acceptable all the construction services purchased pursuant to |
| 373 | the contract for each building, structure, or phase of the |
| 374 | project within the time limitations provided in subsection (1). |
| 375 | (3) The failure to include any corrective work or pending |
| 376 | items not yet completed on the list developed pursuant to |
| 377 | subsection (1) or subsection(2) does not alter the |
| 378 | responsibility of the contractor to complete all the |
| 379 | construction services purchased pursuant to the contract. |
| 380 | (4) Upon completion of all items on the list, the |
| 381 | contractor may submit a payment request for all remaining |
| 382 | retainage withheld by the public entity pursuant to s. 255.078. |
| 383 | If a good-faith dispute exists as to whether one or more items |
| 384 | identified on the list have been completed pursuant to the |
| 385 | contract, the public entity may continue to withhold an amount |
| 386 | not to exceed 150 percent of the total costs to complete such |
| 387 | items. |
| 388 | (5) All items that require correction under the contract |
| 389 | and that are identified after the preparation and delivery of |
| 390 | the list remain the obligation of the contractor as defined by |
| 391 | the contract. |
| 392 | (6) Warranty items may not affect the final payment of |
| 393 | retainage as provided in this section or as provided in the |
| 394 | contract between the contractor and its subcontractors and |
| 395 | suppliers. |
| 396 | (7) Retainage may not be held by a public entity or a |
| 397 | contractor to secure payment of insurance premiums under a |
| 398 | consolidated insurance program or series of insurance policies |
| 399 | issued to a public entity or a contractor for a project or group |
| 400 | of projects, and the final payment of retainage as provided in |
| 401 | this section may not be delayed pending a final audit by the |
| 402 | public entity's or contractor's insurance provider. |
| 403 | (8) If a public entity fails to comply with its |
| 404 | responsibilities to develop the list required under subsection |
| 405 | (1) or subsection (2), as defined in the contract, within the |
| 406 | time limitations provided in subsection (1), the contractor may |
| 407 | submit a payment request for all remaining retainage withheld by |
| 408 | the public entity pursuant to s. 255.078. The public entity need |
| 409 | not pay or process any payment request for retainage if the |
| 410 | contractor has, in whole or in part, failed to cooperate with |
| 411 | the public entity in the development of the list or failed to |
| 412 | perform its contractual responsibilities, if any, with regard to |
| 413 | the development of the list or if s. 255.078(6) applies. |
| 414 | Section 12. Section 255.078, Florida Statutes, is created |
| 415 | to read: |
| 416 | 255.078 Public construction retainage.-- |
| 417 | (1) With regard to any contract for construction services, |
| 418 | a public entity may withhold from each progress payment made to |
| 419 | the contractor an amount not exceeding 10 percent of the payment |
| 420 | as retainage to ensure the satisfactory completion of the |
| 421 | construction services purchased pursuant to the contract until |
| 422 | 50-percent completion of such services. |
| 423 | (2) After 50-percent completion of the construction |
| 424 | services purchased pursuant to the contract, the public entity |
| 425 | must reduce to 5 percent the amount of retainage withheld from |
| 426 | each subsequent progress payment made to the contractor. For |
| 427 | purposes of this section, the term "50-percent completion" has |
| 428 | the meaning set forth in the contract between the public entity |
| 429 | and the contractor, or, if not defined in the contract, the |
| 430 | point at which the public entity has expended 50 percent of the |
| 431 | total cost of the construction services purchased as identified |
| 432 | in the contract together with all costs associated with existing |
| 433 | change orders and other additions or modifications to the |
| 434 | construction services provided for in the contract. |
| 435 | (3) After 50-percent completion of the construction |
| 436 | services purchased pursuant to the contract, the contractor may |
| 437 | elect to withhold retainage from payments to its subcontractors |
| 438 | at a rate higher than 5 percent. The specific amount to be |
| 439 | withheld must be determined on a case-by-case basis and must be |
| 440 | based on the contractor's assessment of the subcontractor's past |
| 441 | performance, the likelihood that such performance will continue, |
| 442 | and the contractor's ability to rely on other safeguards. The |
| 443 | contractor shall notify the subcontractor, in writing, of its |
| 444 | determination to withhold more than 5 percent of the progress |
| 445 | payment and the reasons for making that determination, and the |
| 446 | contractor may not request the release of such retained funds |
| 447 | from the public entity. |
| 448 | (4) After 50-percent completion of the construction |
| 449 | services purchased pursuant to the contract, the contractor may |
| 450 | present to the public entity a payment request for up to one- |
| 451 | half of the retainage held by the public entity. The public |
| 452 | entity shall promptly make payment to the contractor, unless the |
| 453 | public entity has grounds, pursuant to subsection (6), for |
| 454 | withholding the payment of retainage. If the public entity makes |
| 455 | payment of retainage to the contractor under this subsection |
| 456 | which is attributable to the labor, services, or materials |
| 457 | supplied by one or more subcontractors or suppliers, the |
| 458 | contractor shall timely remit payment of such retainage to those |
| 459 | subcontractors and suppliers. |
| 460 | (5) Neither this section nor s. 255.077 prohibits a public |
| 461 | entity from withholding retainage at a rate less than 10 percent |
| 462 | of each progress payment, from incrementally reducing the rate |
| 463 | of retainage pursuant to a schedule provided for in the |
| 464 | contract, or from releasing at any point all or a portion of any |
| 465 | retainage withheld by the public entity which is attributable to |
| 466 | the labor, services, or materials supplied by the contractor or |
| 467 | by one or more subcontractors or suppliers. If a public entity |
| 468 | makes any payment of retainage to the contractor which is |
| 469 | attributable to the labor, services, or materials supplied by |
| 470 | one or more subcontractors or suppliers, the contractor shall |
| 471 | timely remit payment of such retainage to those subcontractors |
| 472 | and suppliers. |
| 473 | (6) Neither this section nor s. 255.077 requires the |
| 474 | public entity to pay or release any amounts that are the subject |
| 475 | of a good-faith dispute, the subject of an action brought |
| 476 | pursuant to s. 255.05, or otherwise the subject of a claim or |
| 477 | demand by the public entity or contractor. |
| 478 | (7) The same time limits for payment of a payment request |
| 479 | apply regardless of whether the payment request is for, or |
| 480 | includes, retainage. |
| 481 | (8) Subsections (1)-(4) do not apply to construction |
| 482 | services purchased by a public entity which are paid for, in |
| 483 | whole or in part, with federal funds and are subject to federal |
| 484 | grantor laws and regulations or requirements that are contrary |
| 485 | to any provision of the Florida Prompt Payment Act. |
| 486 | (9) This section does not apply to any construction |
| 487 | services purchased by a public entity if the total cost of the |
| 488 | construction services purchased as identified in the contract is |
| 489 | $200,000 or less. |
| 490 | Section 13. Section 255.05, Florida Statutes, is amended |
| 491 | to read: |
| 492 | 255.05 Bond of contractor constructing public buildings; |
| 493 | form; action by materialmen.-- |
| 494 | (1)(a) Any person entering into a formal contract with the |
| 495 | state or any county, city, or political subdivision thereof, or |
| 496 | other public authority, for the construction of a public |
| 497 | building, for the prosecution and completion of a public work, |
| 498 | or for repairs upon a public building or public work shall be |
| 499 | required, before commencing the work or before recommencing the |
| 500 | work after a default or abandonment, to execute, deliver to the |
| 501 | public owner, and record in the public records of the county |
| 502 | where the improvement is located, a payment and performance bond |
| 503 | with a surety insurer authorized to do business in this state as |
| 504 | surety. A public entity may not require a contractor to secure a |
| 505 | surety bond under this section from a specific agent or bonding |
| 506 | company. The bond must state on its front page: the name, |
| 507 | principal business address, and phone number of the contractor, |
| 508 | the surety, the owner of the property being improved, and, if |
| 509 | different from the owner, the contracting public entity; the |
| 510 | contract number assigned by the contracting public entity; and a |
| 511 | description of the project sufficient to identify it, such as a |
| 512 | legal description or the street address of the property being |
| 513 | improved, and a general description of the improvement. Such |
| 514 | bond shall be conditioned upon the contractor's performance of |
| 515 | the construction work in the time and manner prescribed in the |
| 516 | contract and promptly making payments to all persons defined in |
| 517 | s. 713.01 who furnish labor, services, or materials for the |
| 518 | prosecution of the work provided for in the contract. Any |
| 519 | claimant may apply to the governmental entity having charge of |
| 520 | the work for copies of the contract and bond and shall thereupon |
| 521 | be furnished with a certified copy of the contract and bond. The |
| 522 | claimant shall have a right of action against the contractor and |
| 523 | surety for the amount due him or her, including unpaid finance |
| 524 | charges due under the claimant's contract. Such action shall not |
| 525 | involve the public authority in any expense. When such work is |
| 526 | done for the state and the contract is for $100,000 or less, no |
| 527 | payment and performance bond shall be required. At the |
| 528 | discretion of the official or board awarding such contract when |
| 529 | such work is done for any county, city, political subdivision, |
| 530 | or public authority, any person entering into such a contract |
| 531 | which is for $200,000 or less may be exempted from executing the |
| 532 | payment and performance bond. When such work is done for the |
| 533 | state, the Secretary of the Department of Management Services |
| 534 | may delegate to state agencies the authority to exempt any |
| 535 | person entering into such a contract amounting to more than |
| 536 | $100,000 but less than $200,000 from executing the payment and |
| 537 | performance bond. In the event such exemption is granted, the |
| 538 | officer or officials shall not be personally liable to persons |
| 539 | suffering loss because of granting such exemption. The |
| 540 | Department of Management Services shall maintain information on |
| 541 | the number of requests by state agencies for delegation of |
| 542 | authority to waive the bond requirements by agency and project |
| 543 | number and whether any request for delegation was denied and the |
| 544 | justification for the denial. Any provision in a bond furnished |
| 545 | for public work contracts as provided by this subsection |
| 546 | restricting the classes or persons protected by the bond or the |
| 547 | venue of any proceeding relating to the bond is unenforceable. |
| 548 | (b) The Department of Management Services shall adopt |
| 549 | rules with respect to all contracts for $200,000 or less, to |
| 550 | provide: |
| 551 | 1. Procedures for retaining up to 10 percent of each |
| 552 | request for payment submitted by a contractor and procedures for |
| 553 | determining disbursements from the amount retained on a pro rata |
| 554 | basis to laborers, materialmen, and subcontractors, as defined |
| 555 | in s. 713.01. |
| 556 | 2. Procedures for requiring certification from laborers, |
| 557 | materialmen, and subcontractors, as defined in s. 713.01, prior |
| 558 | to final payment to the contractor that such laborers, |
| 559 | materialmen, and subcontractors have no claims against the |
| 560 | contractor resulting from the completion of the work provided |
| 561 | for in the contract. |
| 562 |
|
| 563 |
|
| 564 | The state shall not be held liable to any laborer, materialman, |
| 565 | or subcontractor for any amounts greater than the pro rata share |
| 566 | as determined under this section. |
| 567 | (2)(a)1. If a claimant is no longer furnishing labor, |
| 568 | services, or materials on a project, a contractor or the |
| 569 | contractor's agent or attorney may elect to shorten the |
| 570 | prescribed time in this paragraph within which an action to |
| 571 | enforce any claim against a payment bond provided pursuant to |
| 572 | this section may be commenced by recording in the clerk's office |
| 573 | a notice in substantially the following form: |
| 574 |
|
| 575 |
|
| 576 | NOTICE OF CONTEST OF CLAIM |
| 577 | AGAINST PAYMENT BOND |
| 578 |
|
| 579 |
|
| 580 | To: . . . (Name and address of claimant) . . . |
| 581 |
|
| 582 | You are notified that the undersigned contests your notice |
| 583 | of nonpayment, dated ____________, ________, and served on the |
| 584 | undersigned on ____________, ________, and that the time within |
| 585 | which you may file suit to enforce your claim is limited to 60 |
| 586 | days after the date of service of this notice. |
| 587 |
|
| 588 | DATED on ____________, ________. |
| 589 |
|
| 590 |
|
| 591 | Signed: . . . (Contractor or Attorney) . . . |
| 592 |
|
| 593 |
|
| 594 | The claim of any claimant upon whom such notice is served and |
| 595 | who fails to institute a suit to enforce his or her claim |
| 596 | against the payment bond within 60 days after service of such |
| 597 | notice shall be extinguished automatically. The clerk shall mail |
| 598 | a copy of the notice of contest to the claimant at the address |
| 599 | shown in the notice of nonpayment or most recent amendment |
| 600 | thereto and shall certify to such service on the face of such |
| 601 | notice and record the notice. Service is complete upon mailing. |
| 602 | 2. A claimant, except a laborer, who is not in privity |
| 603 | with the contractor shall, before commencing or not later than |
| 604 | 45 days after commencing to furnish labor, materials, or |
| 605 | supplies for the prosecution of the work, furnish the contractor |
| 606 | with a notice that he or she intends to look to the bond for |
| 607 | protection. A claimant who is not in privity with the contractor |
| 608 | and who has not received payment for his or her labor, |
| 609 | materials, or supplies shall deliver to the contractor and to |
| 610 | the surety written notice of the performance of the labor or |
| 611 | delivery of the materials or supplies and of the nonpayment. The |
| 612 | notice of nonpayment may be served at any time during the |
| 613 | progress of the work or thereafter but not before 45 days after |
| 614 | the first furnishing of labor, services, or materials, and not |
| 615 | later than 90 days after the final furnishing of the labor, |
| 616 | services, or materials by the claimant or, with respect to |
| 617 | rental equipment, not later than 90 days after the date that the |
| 618 | rental equipment was last on the job site available for use. Any |
| 619 | notice of nonpayment served by a claimant who is not in privity |
| 620 | with the contractor which includes sums for retainage must |
| 621 | specify the portion of the amount claimed for retainage. No |
| 622 | action for the labor, materials, or supplies may be instituted |
| 623 | against the contractor or the surety unless both notices have |
| 624 | been given. Notices required or permitted under this section may |
| 625 | be served in accordance with s. 713.18. An action, except for an |
| 626 | action exclusively for recovery of retainage, must be instituted |
| 627 | against the contractor or the surety on the payment bond or the |
| 628 | payment provisions of a combined payment and performance bond |
| 629 | within 1 year after the performance of the labor or completion |
| 630 | of delivery of the materials or supplies. An action exclusively |
| 631 | for recovery of retainage must be instituted against the |
| 632 | contractor or the surety within 1 year after the performance of |
| 633 | the labor or completion of delivery of the materials or |
| 634 | supplies, or within 90 days after receipt of final payment (or |
| 635 | the payment estimate containing the owner's final reconciliation |
| 636 | of quantities if no further payment is earned and due as a |
| 637 | result of deductive adjustments) by the contractor or surety, |
| 638 | whichever comes last. A claimant may not waive in advance his or |
| 639 | her right to bring an action under the bond against the surety. |
| 640 | In any action brought to enforce a claim against a payment bond |
| 641 | under this section, the prevailing party is entitled to recover |
| 642 | a reasonable fee for the services of his or her attorney for |
| 643 | trial and appeal or for arbitration, in an amount to be |
| 644 | determined by the court, which fee must be taxed as part of the |
| 645 | prevailing party's costs, as allowed in equitable actions. The |
| 646 | time periods for service of a notice of nonpayment or for |
| 647 | bringing an action against a contractor or a surety shall be |
| 648 | measured from the last day of furnishing labor, services, or |
| 649 | materials by the claimant and shall not be measured by other |
| 650 | standards, such as the issuance of a certificate of occupancy or |
| 651 | the issuance of a certificate of substantial completion. |
| 652 | (b) When a person is required to execute a waiver of his |
| 653 | or her right to make a claim against the payment bond in |
| 654 | exchange for, or to induce payment of, a progress payment, the |
| 655 | waiver may be in substantially the following form: |
| 656 |
|
| 657 |
|
| 658 | WAIVER OF RIGHT TO CLAIM AGAINST THE PAYMENT BOND (PROGRESS |
| 659 | PAYMENT) |
| 660 |
|
| 661 | The undersigned, in consideration of the sum of $____, |
| 662 | hereby waives its right to claim against the payment bond for |
| 663 | labor, services, or materials furnished through . . . (insert |
| 664 | date) . . . to . . . (insert the name of your customer) . . . |
| 665 | on the job of . . . (insert the name of the owner) . . . , for |
| 666 | improvements to the following described project: |
| 667 |
|
| 668 |
|
| 669 | (description of project) |
| 670 |
|
| 671 |
|
| 672 | This waiver does not cover any retention or any labor, |
| 673 | services, or materials furnished after the date specified. |
| 674 |
|
| 675 | DATED ON ________, ____. |
| 676 | . . . (Claimant) . . . |
| 677 | By:____________ |
| 678 |
|
| 679 | (c) When a person is required to execute a waiver of his |
| 680 | or her right to make a claim against the payment bond, in |
| 681 | exchange for, or to induce payment of, the final payment, the |
| 682 | waiver may be in substantially the following form: |
| 683 |
|
| 684 |
|
| 685 | WAIVER OF RIGHT TO CLAIM AGAINST THE PAYMENT BOND (FINAL |
| 686 | PAYMENT) |
| 687 |
|
| 688 | The undersigned, in consideration of the final payment in |
| 689 | the amount of $____, hereby waives its right to claim against |
| 690 | the payment bond for labor, services, or materials furnished to |
| 691 | . . . (insert the name of your customer) . . . on the job of . |
| 692 | . . (insert the name of the owner) . . . , for improvements to |
| 693 | the following described project: |
| 694 |
|
| 695 |
|
| 696 | (description of project) |
| 697 |
|
| 698 | DATED ON ________, ____. |
| 699 | . . . (Claimant) . . . |
| 700 | By:____________ |
| 701 |
|
| 702 | (d) A person may not require a claimant to furnish a |
| 703 | waiver that is different from the forms in paragraphs (b) and |
| 704 | (c). |
| 705 | (e) A claimant who executes a waiver in exchange for a |
| 706 | check may condition the waiver on payment of the check. |
| 707 | (f) A waiver that is not substantially similar to the |
| 708 | forms in this subsection is enforceable in accordance with its |
| 709 | terms. |
| 710 | (3) The bond required in subsection (1) may be in |
| 711 | substantially the following form: |
| 712 |
|
| 713 |
|
| 714 | PUBLIC CONSTRUCTION BOND |
| 715 |
|
| 716 | Bond No. (enter bond number) |
| 717 |
|
| 718 |
|
| 719 |
|
| 720 |
|
| 721 | BY THIS BOND, We _____, as Principal and _____, a |
| 722 | corporation, as Surety, are bound to _____, herein called Owner, |
| 723 | in the sum of $_____, for payment of which we bind ourselves, |
| 724 | our heirs, personal representatives, successors, and assigns, |
| 725 | jointly and severally. |
| 726 | THE CONDITION OF THIS BOND is that if Principal: |
| 727 | 1. Performs the contract dated _____, _____, between |
| 728 | Principal and Owner for construction of _____, the contract |
| 729 | being made a part of this bond by reference, at the times and in |
| 730 | the manner prescribed in the contract; and |
| 731 | 2. Promptly makes payments to all claimants, as defined in |
| 732 | Section 255.05(1), Florida Statutes, supplying Principal with |
| 733 | labor, materials, or supplies, used directly or indirectly by |
| 734 | Principal in the prosecution of the work provided for in the |
| 735 | contract; and |
| 736 | 3. Pays Owner all losses, damages, expenses, costs, and |
| 737 | attorney's fees, including appellate proceedings, that Owner |
| 738 | sustains because of a default by Principal under the contract; |
| 739 | and |
| 740 | 4. Performs the guarantee of all work and materials |
| 741 | furnished under the contract for the time specified in the |
| 742 | contract, then this bond is void; otherwise it remains in full |
| 743 | force. |
| 744 | Any action instituted by a claimant under this bond for |
| 745 | payment must be in accordance with the notice and time |
| 746 | limitation provisions in Section 255.05, Florida Statutes. |
| 747 | Any changes in or under the contract documents and |
| 748 | compliance or noncompliance with any formalities connected with |
| 749 | the contract or the changes does not affect Surety's obligation |
| 750 | under this bond. |
| 751 |
|
| 752 | DATED ON _____, _____. |
| 753 |
|
| 754 |
|
| 755 | ... (Name of Principal) ... |
| 756 |
|
| 757 | By ... (As Attorney in Fact) ... |
| 758 |
|
| 759 | ... (Name of Surety) ... |
| 760 |
|
| 761 | (4) The payment provisions of all bonds required by |
| 762 | furnished for public work contracts described in subsection (1) |
| 763 | shall, regardless of form, be construed and deemed statutory |
| 764 | bonds furnished pursuant to this section and such bonds shall |
| 765 | not under any circumstances be converted into common law bonds |
| 766 | bond provisions, subject to all requirements of subsection (2). |
| 767 | (5) In addition to the provisions of chapter 47, any |
| 768 | action authorized under this section may be brought in the |
| 769 | county in which the public building or public work is being |
| 770 | constructed or repaired. This subsection shall not apply to an |
| 771 | action instituted prior to May 17, 1977. |
| 772 | (6) All bonds executed pursuant to this section shall make |
| 773 | reference to this section by number and shall contain reference |
| 774 | to the notice and time limitation provisions of this section. |
| 775 | (6)(7) In lieu of the bond required by this section, a |
| 776 | contractor may file with the state, county, city, or other |
| 777 | political authority an alternative form of security in the form |
| 778 | of cash, a money order, a certified check, a cashier's check, an |
| 779 | irrevocable letter of credit, or a security of a type listed in |
| 780 | part II of chapter 625. Any such alternative form of security |
| 781 | shall be for the same purpose and be subject to the same |
| 782 | conditions as those applicable to the bond required by this |
| 783 | section. The determination of the value of an alternative form |
| 784 | of security shall be made by the appropriate state, county, |
| 785 | city, or other political subdivision. |
| 786 | (7)(8) When a contractor has furnished a payment bond |
| 787 | pursuant to this section, he or she may, when the state, county, |
| 788 | municipality, political subdivision, or other public authority |
| 789 | makes any payment to the contractor or directly to a claimant, |
| 790 | serve a written demand on any claimant who is not in privity |
| 791 | with the contractor for a written statement under oath of his or |
| 792 | her account showing the nature of the labor or services |
| 793 | performed and to be performed, if any; the materials furnished; |
| 794 | the materials to be furnished, if known; the amount paid on |
| 795 | account to date; the amount due; and the amount to become due, |
| 796 | if known, as of the date of the statement by the claimant. Any |
| 797 | such demand to a claimant who is not in privity with the |
| 798 | contractor must be served on the claimant at the address and to |
| 799 | the attention of any person who is designated to receive the |
| 800 | demand in the notice to contractor served by the claimant. The |
| 801 | failure or refusal to furnish the statement does not deprive the |
| 802 | claimant of his or her rights under the bond if the demand is |
| 803 | not served at the address of the claimant or directed to the |
| 804 | attention of the person designated to receive the demand in the |
| 805 | notice to contractor. The failure to furnish the statement |
| 806 | within 30 days after the demand, or the furnishing of a false or |
| 807 | fraudulent statement, deprives the claimant who fails to furnish |
| 808 | the statement, or who furnishes the false or fraudulent |
| 809 | statement, of his or her rights under the bond. If the |
| 810 | contractor serves more than one demand for statement of account |
| 811 | on a claimant and none of the information regarding the account |
| 812 | has changed since the claimant's last response to a demand, the |
| 813 | failure or refusal to furnish such statement does not deprive |
| 814 | the claimant of his or her rights under the bond. The negligent |
| 815 | inclusion or omission of any information deprives the claimant |
| 816 | of his or her rights under the bond to the extent that the |
| 817 | contractor can demonstrate prejudice from such act or omission |
| 818 | by the claimant. The failure to furnish a response to a demand |
| 819 | for statement of account does not affect the validity of any |
| 820 | claim on the bond being enforced in a lawsuit filed before the |
| 821 | date the demand for statement of account is received by the |
| 822 | claimant. |
| 823 | (8)(9) On any public works project for which the public |
| 824 | authority requires a performance and payment bond, suits at law |
| 825 | and in equity may be brought and maintained by and against the |
| 826 | public authority on any contract claim arising from breach of an |
| 827 | express provision or an implied covenant of a written agreement |
| 828 | or a written directive issued by the public authority pursuant |
| 829 | to the written agreement. In any such suit, the public |
| 830 | authority and the contractor shall have all of the same rights |
| 831 | and obligations as a private person under a like contract except |
| 832 | that no liability may be based on an oral modification of either |
| 833 | the written contract or written directive. Nothing herein shall |
| 834 | be construed to waive the sovereign immunity of the state and |
| 835 | its political subdivisions from equitable claims and equitable |
| 836 | remedies. The provisions of this subsection shall apply only to |
| 837 | contracts entered into on or after July 1, 1999. |
| 838 | (9) An action, except an action for recovery of retainage, |
| 839 | must be instituted against the contractor or the surety on the |
| 840 | payment bond or the payment provisions of a combined payment and |
| 841 | performance bond within 1 year after the performance of the |
| 842 | labor or completion of delivery of the materials or supplies. An |
| 843 | action for recovery of retainage must be instituted against the |
| 844 | contractor or the surety within 1 year after the performance of |
| 845 | the labor or completion of delivery of the materials or |
| 846 | supplies, provided that such an action may not be instituted |
| 847 | until one of the following conditions is satisfied: |
| 848 | (a) The public entity has paid out the claimant's |
| 849 | retainage to the contractor, and the time provided under s. |
| 850 | 255.073(3) for payment of that retainage to the claimant has |
| 851 | expired; |
| 852 | (b) The claimant has completed all work required under its |
| 853 | contract and 70 days have passed since the contractor sent its |
| 854 | final payment request to the public entity; or |
| 855 | (c) The claimant has asked the contractor, in writing, |
| 856 | when the contractor received payment of the claimant's retainage |
| 857 | or when the contractor sent its final payment request to the |
| 858 | public entity, and the contractor has failed to respond to this |
| 859 | request, in writing, within 10 days after receipt. |
| 860 |
|
| 861 |
|
| 862 | If none of the conditions described in paragraph (a), paragraph |
| 863 | (b), or paragraph (c) is satisfied and an action for recovery of |
| 864 | retainage therefore cannot be instituted within the 1-year |
| 865 | limitation period set forth in this subsection, this limitation |
| 866 | period shall be extended until 120 days after one of these |
| 867 | conditions is satisfied. |
| 868 | Section 14. Paragraph (b) of subsection (2) of section |
| 869 | 95.11, Florida Statutes, is amended to read: |
| 870 | 95.11 Limitations other than for the recovery of real |
| 871 | property.--Actions other than for recovery of real property |
| 872 | shall be commenced as follows: |
| 873 | (2) WITHIN FIVE YEARS.-- |
| 874 | (b) A legal or equitable action on a contract, obligation, |
| 875 | or liability founded on a written instrument, except for an |
| 876 | action to enforce a claim against a payment bond, which shall be |
| 877 | governed by the applicable provisions of ss. 255.05(9) |
| 878 | 255.05(2)(a)2. and 713.23(1)(e). |
| 879 | Section 15. Section 713.015, Florida Statutes, is amended |
| 880 | to read: |
| 881 | 713.015 Mandatory provisions for direct contracts.--Any |
| 882 | direct contract between an owner and a contractor, related to |
| 883 | improvements to real property consisting of single or multiple |
| 884 | family dwellings up to and including four units, must contain |
| 885 | the following provision printed in capital letters no less than |
| 886 | the same size 18-point, capitalized, boldfaced type used in the |
| 887 | body of the contract: |
| 888 |
|
| 889 |
|
| 890 |
|
| 891 | ACCORDING TO FLORIDA'S CONSTRUCTION LIEN LAW (SECTIONS 713.001- |
| 892 | 713.37, FLORIDA STATUTES), THOSE WHO WORK ON YOUR PROPERTY OR |
| 893 | PROVIDE MATERIALS AND ARE NOT PAID IN FULL HAVE A RIGHT TO |
| 894 | ENFORCE THEIR CLAIM FOR PAYMENT AGAINST YOUR PROPERTY. THIS |
| 895 | CLAIM IS KNOWN AS A CONSTRUCTION LIEN. IF YOUR CONTRACTOR OR A |
| 896 | SUBCONTRACTOR FAILS TO PAY SUBCONTRACTORS, SUB-SUBCONTRACTORS, |
| 897 | OR MATERIAL SUPPLIERS OR NEGLECTS TO MAKE OTHER LEGALLY REQUIRED |
| 898 | PAYMENTS, THE PEOPLE WHO ARE OWED MONEY MAY LOOK TO YOUR |
| 899 | PROPERTY FOR PAYMENT, EVEN IF YOU HAVE PAID YOUR CONTRACTOR IN |
| 900 | FULL. IF YOU FAIL TO PAY YOUR CONTRACTOR, YOUR CONTRACTOR MAY |
| 901 | ALSO HAVE A LIEN ON YOUR PROPERTY. THIS MEANS IF A LIEN IS FILED |
| 902 | YOUR PROPERTY COULD BE SOLD AGAINST YOUR WILL TO PAY FOR LABOR, |
| 903 | MATERIALS, OR OTHER SERVICES THAT YOUR CONTRACTOR OR A |
| 904 | SUBCONTRACTOR MAY HAVE FAILED TO PAY. FLORIDA'S CONSTRUCTION |
| 905 | LIEN LAW IS COMPLEX AND IT IS RECOMMENDED THAT WHENEVER A |
| 906 | SPECIFIC PROBLEM ARISES, YOU CONSULT AN ATTORNEY. |
| 907 |
|
| 908 |
|
| 909 | Nothing in this section shall be construed to adversely affect |
| 910 | the lien and bond rights of lienors who are not in privity with |
| 911 | the owner. This section does not apply when the owner is also a |
| 912 | licensed contractor or a construction professional who is in the |
| 913 | business of developing property. |
| 914 | Section 16. Subsection (7) of section 713.02, Florida |
| 915 | Statutes, is amended to read: |
| 916 | 713.02 Types of lienors and exemptions.-- |
| 917 | (7) Notwithstanding any other provision of this part, no |
| 918 | lien shall exist in favor of any contractor, subcontractor, or |
| 919 | sub-subcontractor who is unlicensed as provided in s. 489.128 or |
| 920 | s. 489.532. Notwithstanding any other provision of this part, if |
| 921 | a contract is rendered unenforceable by an unlicensed |
| 922 | contractor, subcontractor, or sub-subcontractor pursuant to s. |
| 923 | 489.128 or s. 489.532, such unenforceability shall not affect |
| 924 | the rights of any other persons to enforce contract, lien, or |
| 925 | bond remedies and shall not affect the obligations of a surety |
| 926 | that has provided a bond on behalf of the unlicensed contractor, |
| 927 | subcontractor, or sub-subcontractor. It shall not be a defense |
| 928 | to any claim on a bond or indemnity agreement that the principal |
| 929 | or indemnitor is unlicensed as provided in s. 489.128 or s. |
| 930 | 489.532. |
| 931 | Section 17. Subsection (3) of section 713.04, Florida |
| 932 | Statutes, is amended, and subsection(4) is added to that |
| 933 | section, to read: |
| 934 | 713.04 Subdivision improvements.-- |
| 935 | (3) The owner shall not pay any money on account of a |
| 936 | direct contract before actual furnishing of labor and services |
| 937 | or materials for subdivision improvements. Any such The payment |
| 938 | not complying with such requirement shall not qualify as a |
| 939 | proper payment under this chapter section. |
| 940 | (4) The owner shall make final payment on account of a |
| 941 | direct contract only after the contractor complies with s. |
| 942 | 713.06(3)(d). Any such payment not complying with such |
| 943 | requirement shall not qualify as a proper payment under this |
| 944 | chapter. |
| 945 |
|
| 946 | Section 18. Paragraph (c) of subsection (4) of section |
| 947 | 713.08, Florida Statutes, is amended to read: |
| 948 | 713.08 Claim of lien.-- |
| 949 | (4) |
| 950 | (c) The claim of lien shall be served on the owner. |
| 951 | Failure to serve any claim of lien in the manner provided in s. |
| 952 | 713.18 before recording or within 15 days after recording shall |
| 953 | render the claim of lien voidable to the extent that the failure |
| 954 | or delay is shown to have been prejudicial to any person |
| 955 | entitled to rely on the service. |
| 956 | Section 19. Paragraph (e) of subsection (1) of section |
| 957 | 713.13, Florida Statutes, is amended to read: |
| 958 | 713.13 Notice of commencement.-- |
| 959 | (1) |
| 960 | (e) A copy of any bond must be attached at the time of |
| 961 | recordation of the notice of commencement. The failure to attach |
| 962 | a copy of the bond to the notice of commencement when the notice |
| 963 | is recorded negates the exemption provided in s. 713.02(6). |
| 964 | However, if such a bond exists but is not recorded, the bond may |
| 965 | be used as a transfer bond pursuant to s. 713.24. The bond shall |
| 966 | be deemed a transfer bond under s. 713.24 for all purposes at |
| 967 | the time of recordation of the notice of bond and the clerk's |
| 968 | mailing as provided in s. 713.23(2). The notice requirements of |
| 969 | s. 713.23 apply to any claim against the bond; however, the time |
| 970 | limits for serving the notice shall run from the later of the |
| 971 | time specified in s. 713.23 or the date the notice of bond is |
| 972 | served on the lienor. |
| 973 | Section 20. Paragraph (b) of subsection (1) and subsection |
| 974 | (4) of section 713.135, Florida Statutes, are amended, and |
| 975 | paragraph (e) is added to subsection (1) of that section, to |
| 976 | read: |
| 977 | 713.135 Notice of commencement and applicability of lien.- |
| 978 | - |
| 979 | (1) When any person applies for a building permit, the |
| 980 | authority issuing such permit shall: |
| 981 | (b) Provide the applicant and the owner of the real |
| 982 | property upon which improvements are to be constructed with a |
| 983 | printed statement stating that the right, title, and interest of |
| 984 | the person who has contracted for the improvement may be subject |
| 985 | to attachment under the Construction Lien Law. The Department of |
| 986 | Business and Professional Regulation shall furnish, for |
| 987 | distribution, the statement described in this paragraph, and the |
| 988 | statement must be a summary of the Construction Lien Law and |
| 989 | must include an explanation of the provisions of the |
| 990 | Construction Lien Law relating to the recording, and the posting |
| 991 | of copies, of notices of commencement and a statement |
| 992 | encouraging the owner to record a notice of commencement and |
| 993 | post a copy of the notice of commencement in accordance with s. |
| 994 | 713.13. The statement must also contain an explanation of the |
| 995 | owner's rights if a lienor fails to furnish the owner with a |
| 996 | notice as provided in s. 713.06(2) and an explanation of the |
| 997 | owner's rights as provided in s. 713.22. The authority that |
| 998 | issues the building permit must obtain from the Department of |
| 999 | Business and Professional Regulation the statement required by |
| 1000 | this paragraph and must mail, deliver by electronic mail or |
| 1001 | other electronic format or facsimile, or personally deliver that |
| 1002 | statement to the owner or, in the case in which the owner is |
| 1003 | required to personally appear to obtain the permit, provide that |
| 1004 | statement to any owner making improvements to real property |
| 1005 | consisting of a single or multiple family dwelling up to and |
| 1006 | including four units. However, the failure by the authorities to |
| 1007 | provide the summary does not subject the issuing authority to |
| 1008 | liability. |
| 1009 | (e) Nothing in this subsection shall be construed to |
| 1010 | require a notice of commencement to be recorded as a condition |
| 1011 | to the issuance of a building permit. |
| 1012 | (4) The several boards of county commissioners, municipal |
| 1013 | councils, or other similar bodies may by ordinance or resolution |
| 1014 | establish reasonable fees for furnishing copies of the forms and |
| 1015 | the printed statement provided in paragraphs (1)(b) and |
| 1016 | paragraph (1)(d) in an amount not to exceed $5 to be paid by the |
| 1017 | applicant for each permit in addition to all other costs of the |
| 1018 | permit; however, no forms or statement need be furnished, |
| 1019 | mailed, or otherwise provided to, nor may such additional fee be |
| 1020 | obtained from, applicants for permits in those cases in which |
| 1021 | the owner of a legal or equitable interest (including that of |
| 1022 | ownership of stock of a corporate landowner) of the real |
| 1023 | property to be improved is engaged in the business of |
| 1024 | construction of buildings for sale to others and intends to make |
| 1025 | the improvements authorized by the permit on the property and |
| 1026 | upon completion will offer the improved real property for sale. |
| 1027 | Section 21. Subsection (4) of section 713.24, Florida |
| 1028 | Statutes, is amended to read: |
| 1029 | 713.24 Transfer of liens to security.-- |
| 1030 | (4) If a proceeding to enforce a transferred lien is not |
| 1031 | commenced within the time specified in s. 713.22 or if it |
| 1032 | appears that the transferred lien has been satisfied of record, |
| 1033 | the clerk shall return said security upon request of the person |
| 1034 | depositing or filing the same, or the insurer. If a proceeding |
| 1035 | to enforce a lien is commenced in a court of competent |
| 1036 | jurisdiction within the time specified in s. 713.22 and, |
| 1037 | subsequent to the expiration of the proceeding, the lien is |
| 1038 | transferred pursuant to s. 713.24, an action commenced to |
| 1039 | recover against the security shall be deemed to have been |
| 1040 | brought as of the date of filing the action to enforce the lien. |
| 1041 | Section 22. Paragraph (b) of subsection (1) of section |
| 1042 | 713.345, Florida Statutes, is amended to read: |
| 1043 | 713.345 Moneys received for real property improvements; |
| 1044 | penalty for misapplication.-- |
| 1045 | (1) |
| 1046 | (b) Any person who knowingly and intentionally fails to |
| 1047 | comply with paragraph (a) is guilty of misapplication of |
| 1048 | construction funds, punishable as follows: |
| 1049 | 1. If the amount of payments misapplied has an aggregate |
| 1050 | value of $100,000 or more, the violator is guilty of a felony of |
| 1051 | the first degree, punishable as provided in s. 775.082, s. |
| 1052 | 775.083, or s. 775.084. |
| 1053 | 2. If the amount of payments misapplied has an aggregate |
| 1054 | value of $20,000 or more but less than $100,000, the violator is |
| 1055 | guilty of a felony of the second degree, punishable as provided |
| 1056 | in s. 775.082, s. 775.083, or s. 775.084. |
| 1057 | 3. If the amount of payments misapplied has an aggregate |
| 1058 | value of less than $20,000, the violator is guilty of a felony |
| 1059 | of the third degree, punishable as provided in s. 775.082, s. |
| 1060 | 775.083, or s. 775.084. |
| 1061 | Section 23. Subsection (1) of section 713.3471, Florida |
| 1062 | Statutes, is amended to read: |
| 1063 | 713.3471 Lender responsibilities with construction loans.- |
| 1064 | - |
| 1065 | (1) Prior to a lender making the first any loan |
| 1066 | disbursement on any construction loan secured by residential |
| 1067 | property directly to the owner, which for purposes of this |
| 1068 | section means an individual owner only, or jointly to the owner |
| 1069 | and any other party, the lender shall give the following written |
| 1070 | notice to the owner borrowers in bold type larger than any other |
| 1071 | type on the page: |
| 1072 | WARNING! |
| 1073 |
|
| 1074 | YOUR LENDER IS MAKING A LOAN DISBURSEMENT DIRECTLY TO YOU AS |
| 1075 | THE OWNER BORROWER, OR JOINTLY TO YOU AND ANOTHER PARTY. TO |
| 1076 | PROTECT YOURSELF FROM HAVING TO PAY TWICE FOR THE SAME LABOR, |
| 1077 | SERVICES, OR MATERIALS USED IN MAKING THE IMPROVEMENTS TO YOUR |
| 1078 | PROPERTY, BE SURE THAT YOU REQUIRE YOUR CONTRACTOR TO GIVE YOU |
| 1079 | LIEN RELEASES FROM EACH LIENOR WHO HAS SENT YOU A NOTICE TO |
| 1080 | OWNER EACH TIME YOU MAKE A PAYMENT TO YOUR CONTRACTOR. |
| 1081 | Section 24. Neither the amendments to sections 95.11, |
| 1082 | 218.70, 218.72, 218.735, and 255.071, Florida Statutes, and |
| 1083 | subsection (2) of section 255.05, Florida Statutes, as provided |
| 1084 | in this act, nor subsection (9) of section 255.05, Florida |
| 1085 | Statutes, and section 255.078, Florida Statutes, as created by |
| 1086 | this act, apply to any existing construction contract pending |
| 1087 | approval by a local governmental entity or public entity, or to |
| 1088 | any project advertised for bid by the local government entity or |
| 1089 | public entity, on or before the effective date of this act. The |
| 1090 | amendments to subsections (3), (4), and (6) of section 255.05, |
| 1091 | Florida Statutes, as provided in this act, apply to public |
| 1092 | construction bonds issued for contracts entered into on or after |
| 1093 | the effective date of this act. |
| 1094 | Section 25. This act shall take effect October 1, 2004. |
| 1095 |
|
| 1096 |
|
| 1097 | ================= T I T L E A M E N D M E N T ================= |
| 1098 | Remove the entire title and insert: |
| 1099 | A bill to be entitled |
| 1100 | An act relating to construction contracting; amending s. |
| 1101 | 218.70, F.S.; providing a short title; amending s. 218.72, |
| 1102 | F.S.; redefining terms used in part VII of ch. 218, F.S.; |
| 1103 | amending s. 218.735, F.S.; revising provisions relating to |
| 1104 | timely payment for purchases of construction services; |
| 1105 | revising deadlines for payment; providing procedures for |
| 1106 | project closeout and payment of retainage; providing |
| 1107 | requirements for local government construction retainage; |
| 1108 | providing that ss. 218.72-218.76, F.S., apply to the |
| 1109 | payment of any payment request for retainage; providing |
| 1110 | exceptions; creating s. 255.0705, F.S.; providing a short |
| 1111 | title; amending s. 255.071, F.S.; revising deadlines for |
| 1112 | the payment of subcontractors, sub-subcontractors, |
| 1113 | materialmen, and suppliers on construction contracts for |
| 1114 | public projects; creating ss. 255.072, 255.073, 255.074, |
| 1115 | 255.075, 255.076, 255.077, and 255.078, F.S.; providing |
| 1116 | definitions; providing for timely payment for purchases of |
| 1117 | construction services by a public entity; providing |
| 1118 | procedures for calculating payment due dates; providing |
| 1119 | procedures for handling improper payment requests; |
| 1120 | providing for the resolution of disputes; providing for |
| 1121 | project closeout and payment of retainage; providing that |
| 1122 | ss. 255.072-255.076, F.S., apply to the payment of any |
| 1123 | payment request for retainage; providing exceptions; |
| 1124 | amending s. 255.05, F.S.; providing that certain |
| 1125 | restrictions in bonds issued for public works projects are |
| 1126 | unenforceable; providing requirements for certain notices |
| 1127 | of nonpayment served by a claimant who is not in privity |
| 1128 | with the contractor; revising the form for a public |
| 1129 | construction bond; requiring the payment provisions of all |
| 1130 | public construction bonds to be construed as statutory |
| 1131 | bonds; prohibiting conversion to common law bonds; |
| 1132 | deleting obsolete language; deleting a requirement that |
| 1133 | bond forms used by public owners reference certain notice |
| 1134 | and time limitation provisions; providing limitations on a |
| 1135 | claimant's institution of certain actions against a |
| 1136 | contractor or surety; amending s. 95.11, F.S., to conform |
| 1137 | a cross-reference; amending s. 713.015, F.S.; revising a |
| 1138 | direct contract provision requirement; amending s. 713.02, |
| 1139 | F.S.; protecting the rights of certain persons to enforce |
| 1140 | certain contract, lien, or bond remedies or contractual |
| 1141 | obligations under certain circumstances; precluding |
| 1142 | certain defenses; amending s. 713.04, F.S.; revising |
| 1143 | certain final payment requirements; amending s. 713.08, |
| 1144 | F.S.; requiring a claim of lien to be served on an owner; |
| 1145 | amending s. 713.13, F.S.; clarifying use of a payment bond |
| 1146 | as a transfer bond; amending s. 713.135, F.S., revising |
| 1147 | certain notice of commencement and applicability of lien |
| 1148 | requirements for certain authorities issuing building |
| 1149 | permits; amending s. 713.24, F.S.; preserving certain lien |
| 1150 | rights when filing a transfer bond after commencing |
| 1151 | certain lien enforcement proceedings; amending s. 713.345, |
| 1152 | F.S.; increasing certain criminal penalties for |
| 1153 | misapplication of construction funds; amending s. |
| 1154 | 713.3471, F.S.; revising a notice requirement concerning |
| 1155 | the disbursement of payments on construction loans; |
| 1156 | requiring that the notice be provided to the owner; |
| 1157 | providing for application of specified sections of the act |
| 1158 | to certain contracts and projects; providing an effective |
| 1159 | date. |