| 1 | The Civil Justice Committee recommends the following: |
| 2 |
|
| 3 | Council/Committee Substitute |
| 4 | Remove the entire bill and insert: |
| 5 |
|
| 6 | A bill to be entitled |
| 7 | An act relating to construction contracting; amending s. |
| 8 | 255.05, F.S.; making certain restrictions in bonds issued |
| 9 | for public works projects unenforceable; amending ss. |
| 10 | 489.129 and 489.533, F.S.; increasing an administrative |
| 11 | fine under certain disciplinary proceeding provisions; |
| 12 | amending s. 713.015, F.S.; revising a direct contract |
| 13 | provision requirement; providing that failure to include |
| 14 | such provision in such contracts limits certain lien |
| 15 | rights under the contract; providing construction relating |
| 16 | to validity and enforceability; preserving lien rights of |
| 17 | certain persons; amending s. 713.02, F.S.; protecting the |
| 18 | rights of certain persons to enforce certain contract, |
| 19 | lien, or bond remedies or contractual obligations under |
| 20 | certain circumstances; precluding certain defenses; |
| 21 | amending s. 713.04, F.S.; revising certain final payment |
| 22 | requirements; amending s. 713.08, F.S.; requiring a claim |
| 23 | of lien to be served on an owner; amending s. 713.13, |
| 24 | F.S.; revising provisions authorizing use of certain |
| 25 | payment bonds to transfer certain recorded liens; |
| 26 | specifying application of certain notice requirements to |
| 27 | certain claims; revising time limits for serving certain |
| 28 | required notices; amending s. 713.135, F.S.; revising |
| 29 | certain notice of commencement and applicability of lien |
| 30 | requirements for certain authorities issuing building |
| 31 | permits; providing construction; amending s. 713.24, F.S.; |
| 32 | preserving certain lien rights when filing a transfer bond |
| 33 | after commencing certain lien enforcement proceedings; |
| 34 | amending s. 713.345, F.S.; increasing certain criminal |
| 35 | penalties for misapplication of construction funds; |
| 36 | amending s. 713.3471, F.S.; revising a provision requiring |
| 37 | a lender to provide notice to a property owner when making |
| 38 | a first loan disbursement on a construction loan secured |
| 39 | by residential real property; revising a notice form; |
| 40 | providing an effective date. |
| 41 |
|
| 42 | Be It Enacted by the Legislature of the State of Florida: |
| 43 |
|
| 44 | Section 1. Paragraph (a) of subsection (1) of section |
| 45 | 255.05, Florida Statutes, is amended to read: |
| 46 | 255.05 Bond of contractor constructing public buildings; |
| 47 | form; action by materialmen.-- |
| 48 | (1)(a) Any person entering into a formal contract with the |
| 49 | state or any county, city, or political subdivision thereof, or |
| 50 | other public authority, for the construction of a public |
| 51 | building, for the prosecution and completion of a public work, |
| 52 | or for repairs upon a public building or public work shall be |
| 53 | required, before commencing the work or before recommencing the |
| 54 | work after a default or abandonment, to execute, deliver to the |
| 55 | public owner, and record in the public records of the county |
| 56 | where the improvement is located, a payment and performance bond |
| 57 | with a surety insurer authorized to do business in this state as |
| 58 | surety. A public entity may not require a contractor to secure a |
| 59 | surety bond under this section from a specific agent or bonding |
| 60 | company. The bond must state on its front page: the name, |
| 61 | principal business address, and phone number of the contractor, |
| 62 | the surety, the owner of the property being improved, and, if |
| 63 | different from the owner, the contracting public entity; the |
| 64 | contract number assigned by the contracting public entity; and a |
| 65 | description of the project sufficient to identify it, such as a |
| 66 | legal description or the street address of the property being |
| 67 | improved, and a general description of the improvement. Such |
| 68 | bond shall be conditioned upon the contractor's performance of |
| 69 | the construction work in the time and manner prescribed in the |
| 70 | contract and promptly making payments to all persons defined in |
| 71 | s. 713.01 who furnish labor, services, or materials for the |
| 72 | prosecution of the work provided for in the contract. Any |
| 73 | claimant may apply to the governmental entity having charge of |
| 74 | the work for copies of the contract and bond and shall thereupon |
| 75 | be furnished with a certified copy of the contract and bond. The |
| 76 | claimant shall have a right of action against the contractor and |
| 77 | surety for the amount due him or her, including unpaid finance |
| 78 | charges due under the claimant's contract. Such action shall not |
| 79 | involve the public authority in any expense. When such work is |
| 80 | done for the state and the contract is for $100,000 or less, no |
| 81 | payment and performance bond shall be required. At the |
| 82 | discretion of the official or board awarding such contract when |
| 83 | such work is done for any county, city, political subdivision, |
| 84 | or public authority, any person entering into such a contract |
| 85 | which is for $200,000 or less may be exempted from executing the |
| 86 | payment and performance bond. When such work is done for the |
| 87 | state, the Secretary of the Department of Management Services |
| 88 | may delegate to state agencies the authority to exempt any |
| 89 | person entering into such a contract amounting to more than |
| 90 | $100,000 but less than $200,000 from executing the payment and |
| 91 | performance bond. In the event such exemption is granted, the |
| 92 | officer or officials shall not be personally liable to persons |
| 93 | suffering loss because of granting such exemption. The |
| 94 | Department of Management Services shall maintain information on |
| 95 | the number of requests by state agencies for delegation of |
| 96 | authority to waive the bond requirements by agency and project |
| 97 | number and whether any request for delegation was denied and the |
| 98 | justification for the denial. Any provision in a bond furnished |
| 99 | for public work contracts as provided by this subsection |
| 100 | restricting the classes or persons protected by such bond or the |
| 101 | venue of any proceeding relating to such bond is unenforceable. |
| 102 | Section 2. Subsection (1) of section 489.129, Florida |
| 103 | Statutes, is amended to read: |
| 104 | 489.129 Disciplinary proceedings.-- |
| 105 | (1) The board may take any of the following actions |
| 106 | against any certificateholder or registrant: place on probation |
| 107 | or reprimand the licensee, revoke, suspend, or deny the issuance |
| 108 | or renewal of the certificate, registration, or certificate of |
| 109 | authority, require financial restitution to a consumer for |
| 110 | financial harm directly related to a violation of a provision of |
| 111 | this part, impose an administrative fine not to exceed $10,000 |
| 112 | $5,000 per violation, require continuing education, or assess |
| 113 | costs associated with investigation and prosecution, if the |
| 114 | contractor, financially responsible officer, or business |
| 115 | organization for which the contractor is a primary qualifying |
| 116 | agent, a financially responsible officer, or a secondary |
| 117 | qualifying agent responsible under s. 489.1195 is found guilty |
| 118 | of any of the following acts: |
| 119 | (a) Obtaining a certificate, registration, or certificate |
| 120 | of authority by fraud or misrepresentation. |
| 121 | (b) Being convicted or found guilty of, or entering a plea |
| 122 | of nolo contendere to, regardless of adjudication, a crime in |
| 123 | any jurisdiction which directly relates to the practice of |
| 124 | contracting or the ability to practice contracting. |
| 125 | (c) Violating any provision of chapter 455. |
| 126 | (d) Performing any act which assists a person or entity in |
| 127 | engaging in the prohibited uncertified and unregistered practice |
| 128 | of contracting, if the certificateholder or registrant knows or |
| 129 | has reasonable grounds to know that the person or entity was |
| 130 | uncertified and unregistered. |
| 131 | (e) Knowingly combining or conspiring with an uncertified |
| 132 | or unregistered person by allowing his or her certificate, |
| 133 | registration, or certificate of authority to be used by the |
| 134 | uncertified or unregistered person with intent to evade the |
| 135 | provisions of this part. When a certificateholder or registrant |
| 136 | allows his or her certificate or registration to be used by one |
| 137 | or more business organizations without having any active |
| 138 | participation in the operations, management, or control of such |
| 139 | business organizations, such act constitutes prima facie |
| 140 | evidence of an intent to evade the provisions of this part. |
| 141 | (f) Acting in the capacity of a contractor under any |
| 142 | certificate or registration issued hereunder except in the name |
| 143 | of the certificateholder or registrant as set forth on the |
| 144 | issued certificate or registration, or in accordance with the |
| 145 | personnel of the certificateholder or registrant as set forth in |
| 146 | the application for the certificate or registration, or as later |
| 147 | changed as provided in this part. |
| 148 | (g) Committing mismanagement or misconduct in the practice |
| 149 | of contracting that causes financial harm to a customer. |
| 150 | Financial mismanagement or misconduct occurs when: |
| 151 | 1. Valid liens have been recorded against the property of |
| 152 | a contractor's customer for supplies or services ordered by the |
| 153 | contractor for the customer's job; the contractor has received |
| 154 | funds from the customer to pay for the supplies or services; and |
| 155 | the contractor has not had the liens removed from the property, |
| 156 | by payment or by bond, within 75 days after the date of such |
| 157 | liens; |
| 158 | 2. The contractor has abandoned a customer's job and the |
| 159 | percentage of completion is less than the percentage of the |
| 160 | total contract price paid to the contractor as of the time of |
| 161 | abandonment, unless the contractor is entitled to retain such |
| 162 | funds under the terms of the contract or refunds the excess |
| 163 | funds within 30 days after the date the job is abandoned; or |
| 164 | 3. The contractor's job has been completed, and it is |
| 165 | shown that the customer has had to pay more for the contracted |
| 166 | job than the original contract price, as adjusted for subsequent |
| 167 | change orders, unless such increase in cost was the result of |
| 168 | circumstances beyond the control of the contractor, was the |
| 169 | result of circumstances caused by the customer, or was otherwise |
| 170 | permitted by the terms of the contract between the contractor |
| 171 | and the customer. |
| 172 | (h) Being disciplined by any municipality or county for an |
| 173 | act or violation of this part. |
| 174 | (i) Failing in any material respect to comply with the |
| 175 | provisions of this part or violating a rule or lawful order of |
| 176 | the board. |
| 177 | (j) Abandoning a construction project in which the |
| 178 | contractor is engaged or under contract as a contractor. A |
| 179 | project may be presumed abandoned after 90 days if the |
| 180 | contractor terminates the project without just cause or without |
| 181 | proper notification to the owner, including the reason for |
| 182 | termination, or fails to perform work without just cause for 90 |
| 183 | consecutive days. |
| 184 | (k) Signing a statement with respect to a project or |
| 185 | contract falsely indicating that the work is bonded; falsely |
| 186 | indicating that payment has been made for all subcontracted |
| 187 | work, labor, and materials which results in a financial loss to |
| 188 | the owner, purchaser, or contractor; or falsely indicating that |
| 189 | workers' compensation and public liability insurance are |
| 190 | provided. |
| 191 | (l) Committing fraud or deceit in the practice of |
| 192 | contracting. |
| 193 | (m) Committing incompetency or misconduct in the practice |
| 194 | of contracting. |
| 195 | (n) Committing gross negligence, repeated negligence, or |
| 196 | negligence resulting in a significant danger to life or |
| 197 | property. |
| 198 | (o) Proceeding on any job without obtaining applicable |
| 199 | local building department permits and inspections. |
| 200 | (p) Intimidating, threatening, coercing, or otherwise |
| 201 | discouraging the service of a notice to owner under part I of |
| 202 | chapter 713 or a notice to contractor under chapter 255 or part |
| 203 | I of chapter 713. |
| 204 | (q) Failing to satisfy within a reasonable time, the terms |
| 205 | of a civil judgment obtained against the licensee, or the |
| 206 | business organization qualified by the licensee, relating to the |
| 207 | practice of the licensee's profession. |
| 208 |
|
| 209 | For the purposes of this subsection, construction is considered |
| 210 | to be commenced when the contract is executed and the contractor |
| 211 | has accepted funds from the customer or lender. A contractor |
| 212 | does not commit a violation of this subsection when the |
| 213 | contractor relies on a building code interpretation rendered by |
| 214 | a building official or person authorized by s. 553.80 to enforce |
| 215 | the building code, absent a finding of fraud or deceit in the |
| 216 | practice of contracting, or gross negligence, repeated |
| 217 | negligence, or negligence resulting in a significant danger to |
| 218 | life or property on the part of the building official, in a |
| 219 | proceeding under chapter 120. |
| 220 | Section 3. Paragraph (c) of subsection (2) of section |
| 221 | 489.533, Florida Statutes, is amended to read: |
| 222 | 489.533 Disciplinary proceedings.-- |
| 223 | (2) When the board finds any applicant, contractor, or |
| 224 | business organization for which the contractor is a primary |
| 225 | qualifying agent or secondary qualifying agent responsible under |
| 226 | s. 489.522 guilty of any of the grounds set forth in subsection |
| 227 | (1), it may enter an order imposing one or more of the following |
| 228 | penalties: |
| 229 | (c) Imposition of an administrative fine not to exceed |
| 230 | $10,000 $5,000 for each count or separate offense. |
| 231 | Section 4. Section 713.015, Florida Statutes, is amended |
| 232 | to read: |
| 233 | 713.015 Mandatory provisions for direct contracts.--Any |
| 234 | direct contract between an owner and a contractor, related to |
| 235 | improvements to real property consisting of single or multiple |
| 236 | family dwellings up to and including four units, must contain |
| 237 | the following provision printed in capital letters no less than |
| 238 | the same size as the 18-point, capitalized, boldfaced type used |
| 239 | in the body of the contract: |
| 240 |
|
| 241 | ACCORDING TO FLORIDA'S CONSTRUCTION LIEN LAW (SECTIONS 713.001- |
| 242 | 713.37, FLORIDA STATUTES), THOSE WHO WORK ON YOUR PROPERTY OR |
| 243 | PROVIDE MATERIALS AND ARE NOT PAID IN FULL HAVE A RIGHT TO |
| 244 | ENFORCE THEIR CLAIM FOR PAYMENT AGAINST YOUR PROPERTY. THIS |
| 245 | CLAIM IS KNOWN AS A CONSTRUCTION LIEN. IF YOUR CONTRACTOR OR A |
| 246 | SUBCONTRACTOR FAILS TO PAY SUBCONTRACTORS, SUB-SUBCONTRACTORS, |
| 247 | OR MATERIAL SUPPLIERS OR NEGLECTS TO MAKE OTHER LEGALLY REQUIRED |
| 248 | PAYMENTS, THE PEOPLE WHO ARE OWED MONEY MAY LOOK TO YOUR |
| 249 | PROPERTY FOR PAYMENT, EVEN IF YOU HAVE PAID YOUR CONTRACTOR IN |
| 250 | FULL. IF YOU FAIL TO PAY YOUR CONTRACTOR, YOUR CONTRACTOR MAY |
| 251 | ALSO HAVE A LIEN ON YOUR PROPERTY. THIS MEANS IF A LIEN IS FILED |
| 252 | YOUR PROPERTY COULD BE SOLD AGAINST YOUR WILL TO PAY FOR LABOR, |
| 253 | MATERIALS, OR OTHER SERVICES THAT YOUR CONTRACTOR OR A |
| 254 | SUBCONTRACTOR MAY HAVE FAILED TO PAY. FLORIDA'S CONSTRUCTION |
| 255 | LIEN LAW IS COMPLEX AND IT IS RECOMMENDED THAT WHENEVER A |
| 256 | SPECIFIC PROBLEM ARISES, YOU CONSULT AN ATTORNEY. |
| 257 |
|
| 258 | Nothing in this section shall be construed to adversely affect |
| 259 | the lien and bond rights of lienors who are not in privity with |
| 260 | the owner. This section does not apply when the owner is also a |
| 261 | licensed contractor or a construction professional who is in the |
| 262 | business of developing property. |
| 263 | Section 5. Subsection (7) of section 713.02, Florida |
| 264 | Statutes, is amended to read: |
| 265 | 713.02 Types of lienors and exemptions.-- |
| 266 | (7) Notwithstanding any other provision of this part, no |
| 267 | lien shall exist in favor of any contractor, subcontractor, or |
| 268 | sub-subcontractor who is unlicensed as provided in s. 489.128 or |
| 269 | s. 489.532. Notwithstanding any other provision of this part, if |
| 270 | a contract is rendered unenforceable by an unlicensed |
| 271 | contractor, subcontractor, or sub-subcontractor pursuant to s. |
| 272 | 489.128 or s. 489.532, such unenforceability shall not affect |
| 273 | the rights of any other persons to enforce contract, lien, or |
| 274 | bond remedies and shall not affect the obligations of a surety |
| 275 | that has provided a bond on behalf of the unlicensed contractor, |
| 276 | subcontractor, or sub-subcontractor. It shall not be a defense |
| 277 | to any claim on a bond or indemnity agreement that the principal |
| 278 | or indemnitor is unlicensed as provided in s. 489.128 or s. |
| 279 | 489.532. |
| 280 | Section 6. Subsection (3) of section 713.04, Florida |
| 281 | Statutes, is amended, and subsection (4) is added to said |
| 282 | section, to read: |
| 283 | 713.04 Subdivision improvements.-- |
| 284 | (3) The owner shall not pay any money on account of a |
| 285 | direct contract before actual furnishing of labor and services |
| 286 | or materials for subdivision improvements. Any such The payment |
| 287 | not complying with such requirement shall not qualify as a |
| 288 | proper payment under this chapter section. |
| 289 | (4) The owner shall make final payment on account of a |
| 290 | direct contract only after the contractor complies with s. |
| 291 | 713.06(3)(d). Any such payment not complying with such |
| 292 | requirement shall not qualify as a proper payment under this |
| 293 | chapter. |
| 294 | Section 7. Paragraph (c) of subsection (4) of section |
| 295 | 713.08, Florida Statutes, is amended to read: |
| 296 | 713.08 Claim of lien.-- |
| 297 | (4) |
| 298 | (c) The claim of lien shall be served on the owner. |
| 299 | Failure to serve any claim of lien in the manner provided in s. |
| 300 | 713.18 before recording or within 15 days after recording shall |
| 301 | render the claim of lien voidable to the extent that the failure |
| 302 | or delay is shown to have been prejudicial to any person |
| 303 | entitled to rely on the service. |
| 304 | Section 8. Paragraph (e) of subsection (1) of section |
| 305 | 713.13, Florida Statutes, is amended to read: |
| 306 | 713.13 Notice of commencement.-- |
| 307 | (1) |
| 308 | (e) A copy of any payment bond must be attached at the |
| 309 | time of recordation of the notice of commencement. The failure |
| 310 | to attach a copy of the bond to the notice of commencement when |
| 311 | the notice is recorded negates the exemption provided in s. |
| 312 | 713.02(6). However, if such a payment bond under s. 713.23 |
| 313 | exists but was is not attached at the time of recordation of the |
| 314 | notice of commencement, the bond may be used to transfer any |
| 315 | recorded lien of a lienor except that of the contractor by the |
| 316 | recordation and service of a notice of bond pursuant to s. |
| 317 | 713.23(2). The notice requirements of s. 713.23 apply to any |
| 318 | claim against the bond; however, the time limits for serving any |
| 319 | required notices shall run from the later of the time specified |
| 320 | in s. 713.23 or the date the notice of bond is served on the |
| 321 | lienor recorded, the bond may be used as a transfer bond |
| 322 | pursuant to s. 713.24. |
| 323 | Section 9. Paragraph (b) of subsection (1) and subsection |
| 324 | (4) of section 713.135, Florida Statutes, are amended, and |
| 325 | paragraph (e) is added to subsection (1) of said section, to |
| 326 | read: |
| 327 | 713.135 Notice of commencement and applicability of |
| 328 | lien.-- |
| 329 | (1) When any person applies for a building permit, the |
| 330 | authority issuing such permit shall: |
| 331 | (b) Provide the applicant and the owner of the real |
| 332 | property upon which improvements are to be constructed with a |
| 333 | printed statement stating that the right, title, and interest of |
| 334 | the person who has contracted for the improvement may be subject |
| 335 | to attachment under the Construction Lien Law. The Department of |
| 336 | Business and Professional Regulation shall furnish, for |
| 337 | distribution, the statement described in this paragraph, and the |
| 338 | statement must be a summary of the Construction Lien Law and |
| 339 | must include an explanation of the provisions of the |
| 340 | Construction Lien Law relating to the recording, and the posting |
| 341 | of copies, of notices of commencement and a statement |
| 342 | encouraging the owner to record a notice of commencement and |
| 343 | post a copy of the notice of commencement in accordance with s. |
| 344 | 713.13. The statement must also contain an explanation of the |
| 345 | owner's rights if a lienor fails to furnish the owner with a |
| 346 | notice as provided in s. 713.06(2) and an explanation of the |
| 347 | owner's rights as provided in s. 713.22. The authority that |
| 348 | issues the building permit must obtain from the Department of |
| 349 | Business and Professional Regulation the statement required by |
| 350 | this paragraph and must mail, deliver by electronic mail or |
| 351 | other electronic format or facsimile, or personally deliver that |
| 352 | statement to the owner or, in the case in which the owner is |
| 353 | required to personally appear to obtain the permit, provide that |
| 354 | statement to any owner making improvements to real property |
| 355 | consisting of a single or multiple family dwelling up to and |
| 356 | including four units. However, the failure by the authorities to |
| 357 | provide the summary does not subject the issuing authority to |
| 358 | liability. |
| 359 | (e) Nothing in this subsection shall be construed to |
| 360 | require a notice of commencement to be recorded as a condition |
| 361 | to the issuance of a building permit. |
| 362 | (4) The several boards of county commissioners, municipal |
| 363 | councils, or other similar bodies may by ordinance or resolution |
| 364 | establish reasonable fees for furnishing copies of the forms and |
| 365 | the printed statement provided in paragraphs paragraph (1)(b) |
| 366 | and (d) in an amount not to exceed $5 to be paid by the |
| 367 | applicant for each permit in addition to all other costs of the |
| 368 | permit; however, no forms or statement need be furnished, |
| 369 | mailed, or otherwise provided to, nor may such additional fee be |
| 370 | obtained from, applicants for permits in those cases in which |
| 371 | the owner of a legal or equitable interest (including that of |
| 372 | ownership of stock of a corporate landowner) of the real |
| 373 | property to be improved is engaged in the business of |
| 374 | construction of buildings for sale to others and intends to make |
| 375 | the improvements authorized by the permit on the property and |
| 376 | upon completion will offer the improved real property for sale. |
| 377 | Section 10. Subsection (4) of section 713.24, Florida |
| 378 | Statutes, is amended to read: |
| 379 | 713.24 Transfer of liens to security.-- |
| 380 | (4) If a proceeding to enforce a transferred lien is not |
| 381 | commenced within the time specified in s. 713.22 or if it |
| 382 | appears that the transferred lien has been satisfied of record, |
| 383 | the clerk shall return said security upon request of the person |
| 384 | depositing or filing the same, or the insurer. If a proceeding |
| 385 | to enforce a lien is commenced in a court of competent |
| 386 | jurisdiction within the time specified in s. 713.22 and, during |
| 387 | such proceeding, the lien is transferred pursuant to this |
| 388 | section or s. 713.13(1)(e), an action commenced in the same |
| 389 | county or circuit court to recover against the security shall be |
| 390 | deemed to have been brought as of the date of filing the action |
| 391 | to enforce the lien, and the court shall have jurisdiction over |
| 392 | the action. |
| 393 | Section 11. Paragraph (b) of subsection (1) of section |
| 394 | 713.345, Florida Statutes, is amended to read: |
| 395 | 713.345 Moneys received for real property improvements; |
| 396 | penalty for misapplication.-- |
| 397 | (1) |
| 398 | (b) Any person who knowingly and intentionally fails to |
| 399 | comply with paragraph (a) is guilty of misapplication of |
| 400 | construction funds, punishable as follows: |
| 401 | 1. If the amount of payments misapplied has an aggregate |
| 402 | value of $100,000 or more, the violator is guilty of a felony of |
| 403 | the first degree, punishable as provided in s. 775.082, s. |
| 404 | 775.083, or s. 775.084. |
| 405 | 2. If the amount of payments misapplied has an aggregate |
| 406 | value of $20,000 or more but less than $100,000, the violator is |
| 407 | guilty of a felony of the second degree, punishable as provided |
| 408 | in s. 775.082, s. 775.083, or s. 775.084. |
| 409 | 3. If the amount of payments misapplied has an aggregate |
| 410 | value of less than $20,000, the violator is guilty of a felony |
| 411 | of the third degree, punishable as provided in s. 775.082, s. |
| 412 | 775.083, or s. 775.084. |
| 413 | Section 12. Subsection (1) of section 713.3471, Florida |
| 414 | Statutes, is amended to read: |
| 415 | 713.3471 Lender responsibilities with construction |
| 416 | loans.-- |
| 417 | (1) Prior to a lender making the first any loan |
| 418 | disbursement on any construction loan secured by residential |
| 419 | real property directly to the owner, which, for purposes of this |
| 420 | subsection, means only a natural person, or jointly to the owner |
| 421 | and any other party, the lender shall give the following written |
| 422 | notice to the owner borrowers in bold type larger than any other |
| 423 | type on the page: |
| 424 |
|
| 425 | WARNING! |
| 426 |
|
| 427 | THIS IS THE ONLY LOAN DISBURSEMENT NOTICE THAT YOU WILL |
| 428 | RECEIVE. YOUR LENDER IS MAKING A LOAN DISBURSEMENT |
| 429 | DIRECTLY TO YOU AS THE OWNER BORROWER, OR JOINTLY TO YOU |
| 430 | AND ANOTHER PARTY. TO PROTECT YOURSELF FROM HAVING TO PAY |
| 431 | TWICE FOR THE SAME LABOR, SERVICES, OR MATERIALS USED IN |
| 432 | MAKING THE IMPROVEMENTS TO YOUR PROPERTY, BE SURE THAT YOU |
| 433 | REQUIRE YOUR CONTRACTOR TO GIVE YOU LIEN RELEASES FROM |
| 434 | EACH LIENOR WHO HAS SENT YOU A NOTICE TO OWNER EACH TIME |
| 435 | YOU MAKE A PAYMENT TO YOUR CONTRACTOR. |
| 436 | Section 13. This act shall take effect October 1, 2005. |