Florida Senate - 2020                                     SB 868
       
       
        
       By Senator Albritton
       
       
       
       
       
       26-00848A-20                                           2020868__
    1                        A bill to be entitled                      
    2         An act relating to construction contracting; amending
    3         s. 255.05, F.S.; revising the manner by which certain
    4         claimants provide a notice of nonpayment to a surety;
    5         providing that certain provisions in a waiver or
    6         release of a claim against a payment bond are
    7         unenforceable; amending s. 713.01, F.S.; revising the
    8         definition of the term “final furnishing”; amending s.
    9         713.07, F.S.; specifying the priority of certain liens
   10         in relation to subordinate conveyances, encumbrances,
   11         and demands; amending s. 713.13, F.S.; revising
   12         information required to be included in a notice of
   13         commencement; amending s. 713.18, F.S.; modifying
   14         conditions under which service of certain instruments
   15         is deemed effective; amending s. 713.20, F.S.;
   16         providing that certain provisions in a lien waiver or
   17         release are unenforceable; amending s. 713.23, F.S.;
   18         revising the manner by which certain lienors provide a
   19         notice of nonpayment to a surety; amending s. 713.235,
   20         F.S.; providing that certain provisions in a waiver or
   21         release of a right to make a claim against a payment
   22         bond are unenforceable; providing an effective date.
   23          
   24  Be It Enacted by the Legislature of the State of Florida:
   25  
   26         Section 1. Paragraphs (a) and (f) of subsection (2) of
   27  section 255.05, Florida Statutes, are amended to read:
   28         255.05 Bond of contractor constructing public buildings;
   29  form; action by claimants.—
   30         (2)(a)1. If a claimant is no longer furnishing labor,
   31  services, or materials on a project, a contractor or the
   32  contractor’s agent or attorney may elect to shorten the time
   33  within which an action to enforce any claim against a payment
   34  bond must be commenced by recording in the clerk’s office a
   35  notice in substantially the following form:
   36  
   37                     NOTICE OF CONTEST OF CLAIM                    
   38                        AGAINST PAYMENT BOND                       
   39  
   40  To: ...(Name and address of claimant)...
   41  
   42         You are notified that the undersigned contests your notice
   43  of nonpayment, dated ............, ........, and served on the
   44  undersigned on ............, ........, and that the time within
   45  which you may file suit to enforce your claim is limited to 60
   46  days after the date of service of this notice.
   47  
   48         DATED on ............, .........
   49  
   50  Signed: ...(Contractor or Attorney)...
   51  
   52  The claim of a claimant upon whom such notice is served and who
   53  fails to institute a suit to enforce his or her claim against
   54  the payment bond within 60 days after service of such notice is
   55  extinguished automatically. The contractor or the contractor’s
   56  attorney shall serve a copy of the notice of contest to the
   57  claimant at the address shown in the notice of nonpayment or
   58  most recent amendment thereto and shall certify to such service
   59  on the face of the notice and record the notice.
   60         2. A claimant, except a laborer, who is not in privity with
   61  the contractor shall, before commencing or not later than 45
   62  days after commencing to furnish labor, services, or materials
   63  for the prosecution of the work, serve the contractor with a
   64  written notice that he or she intends to look to the bond for
   65  protection. A claimant who is not in privity with the contractor
   66  and who has not received payment for furnishing his or her
   67  labor, services, or materials shall serve a written notice of
   68  nonpayment on the contractor, and a copy of the notice on the
   69  surety. The notice of nonpayment shall be under oath and served
   70  during the progress of the work or thereafter but may not be
   71  served earlier than 45 days after the first furnishing of labor,
   72  services, or materials by the claimant or later than 90 days
   73  after the final furnishing of the labor, services, or materials
   74  by the claimant or, with respect to rental equipment, later than
   75  90 days after the date that the rental equipment was last on the
   76  job site available for use. Any notice of nonpayment served by a
   77  claimant who is not in privity with the contractor which
   78  includes sums for retainage must specify the portion of the
   79  amount claimed for retainage. An action for the labor, services,
   80  or materials may not be instituted against the contractor or the
   81  surety unless the notice to the contractor and notice of
   82  nonpayment have been served, if required by this section.
   83  Notices required or permitted under this section must be served
   84  in accordance with s. 713.18. A claimant may not waive in
   85  advance his or her right to bring an action under the bond
   86  against the surety. In any action brought to enforce a claim
   87  against a payment bond under this section, the prevailing party
   88  is entitled to recover a reasonable fee for the services of his
   89  or her attorney for trial and appeal or for arbitration, in an
   90  amount to be determined by the court, which fee must be taxed as
   91  part of the prevailing party’s costs, as allowed in equitable
   92  actions. The time periods for service of a notice of nonpayment
   93  or for bringing an action against a contractor or a surety shall
   94  be measured from the last day of furnishing labor, services, or
   95  materials by the claimant and may not be measured by other
   96  standards, such as the issuance of a certificate of occupancy or
   97  the issuance of a certificate of substantial completion. The
   98  negligent inclusion or omission of any information in the notice
   99  of nonpayment that has not prejudiced the contractor or surety
  100  does not constitute a default that operates to defeat an
  101  otherwise valid bond claim. A claimant who serves a fraudulent
  102  notice of nonpayment forfeits his or her rights under the bond.
  103  A notice of nonpayment is fraudulent if the claimant has
  104  willfully exaggerated the amount unpaid, willfully included a
  105  claim for work not performed or materials not furnished for the
  106  subject improvement, or prepared the notice with such willful
  107  and gross negligence as to amount to a willful exaggeration.
  108  However, a minor mistake or error in a notice of nonpayment, or
  109  a good faith dispute as to the amount unpaid, does not
  110  constitute a willful exaggeration that operates to defeat an
  111  otherwise valid claim against the bond. The service of a
  112  fraudulent notice of nonpayment is a complete defense to the
  113  claimant’s claim against the bond. The notice of nonpayment
  114  under this subparagraph must include the following information,
  115  current as of the date of the notice, and must be in
  116  substantially the following form:
  117  
  118                        NOTICE OF NONPAYMENT                       
  119  
  120  To: ...(name of contractor and address)...
  121  
  122  ...(name of surety and address)...
  123  
  124  The undersigned claimant notifies you that:
  125         1. Claimant has furnished ...(describe labor, services, or
  126  materials)... for the improvement of the real property
  127  identified as ...(property description).... The corresponding
  128  amount unpaid to date is $...., of which $.... is unpaid
  129  retainage.
  130         2. Claimant has been paid to date the amount of $.... for
  131  previously furnishing ...(describe labor, services, or
  132  materials)... for this improvement.
  133         3. Claimant expects to furnish ...(describe labor,
  134  services, or materials)... for this improvement in the future
  135  (if known), and the corresponding amount expected to become due
  136  is $.... (if known).
  137  
  138  I declare that I have read the foregoing Notice of Nonpayment
  139  and that the facts stated in it are true to the best of my
  140  knowledge and belief.
  141  
  142  DATED on ............, .........
  143  
  144  ...(signature and address of claimant)...
  145  
  146  STATE OF FLORIDA
  147  COUNTY OF ........
  148  
  149  The foregoing instrument was sworn to (or affirmed) and
  150  subscribed before me this....day of ...., ...(year)..., by
  151  ...(name of signatory)....
  152         ...(Signature of Notary Public - State of Florida)...
  153         ...(Print, Type, or Stamp Commissioned Name of Notary
  154  Public)...
  155  
  156  Personally Known ........ OR Produced Identification ........
  157  
  158  Type of Identification Produced.................................
  159  
  160         (f) A provision in a waiver or a release executed on or
  161  after July 1, 2020, which that is not related to the waiver or
  162  release of a claim against the payment bond as contemplated in
  163  this subsection is unenforceable substantially similar to the
  164  forms in this subsection is enforceable in accordance with its
  165  terms.
  166         Section 2. Subsection (12) of section 713.01, Florida
  167  Statutes, is amended to read:
  168         713.01 Definitions.—As used in this part, the term:
  169         (12) “Final furnishing” means the last date that the lienor
  170  furnishes labor, services, or materials. Such date may not be
  171  measured by other standards, such as the issuance of a
  172  certificate of occupancy or the issuance of a certificate of
  173  final completion, and does not include correction of
  174  deficiencies in the lienor’s previously performed work or
  175  materials supplied.
  176         (a) With respect to rental equipment, the term means the
  177  date that the rental equipment was last on the job site and
  178  available for use.
  179         (b) With respect to specially fabricated materials, the
  180  term means the date that the last portion of the specially
  181  fabricated materials is delivered to the site of the
  182  improvement. However, if any portion of the specially fabricated
  183  materials is not delivered to the site of the improvement
  184  through no fault of the lienor, the term means either 1 year
  185  from completion of fabrication by the lienor, 1 year from the
  186  date that the lienor receives the remainder of the specially
  187  fabricated materials to complete its order, or the expiration of
  188  the notice of commencement, whichever occurs later.
  189         Section 3. Subsection (3) of section 713.07, Florida
  190  Statutes, is amended to read:
  191         713.07 Priority of liens.—
  192         (3) All such liens shall have priority over any conveyance,
  193  encumbrance, or demand not recorded against the real property
  194  before prior to the time such lien attached as provided herein,
  195  including subordinate conveyances, encumbrances, or demands that
  196  would otherwise relate back to any conveyance, encumbrance, or
  197  demand recorded before the time such lien attached pursuant to
  198  the operation of any common law doctrine or remedy. However, but
  199  any conveyance, encumbrance, or demand recorded before prior to
  200  the time such lien attaches and any proceeds thereof, regardless
  201  of when disbursed, has shall have priority over such liens.
  202         Section 4. Subsection (1) of section 713.13, Florida
  203  Statutes, is amended to read:
  204         713.13 Notice of commencement.—
  205         (1)(a) Except for an improvement that is exempt pursuant to
  206  s. 713.02(5), an owner or the owner’s authorized agent before
  207  actually commencing to improve any real property, or
  208  recommencing completion of any improvement after default or
  209  abandonment, whether or not a project has a payment bond
  210  complying with s. 713.23, shall record a notice of commencement
  211  in the clerk’s office and forthwith post either a certified copy
  212  thereof or a notarized statement that the notice of commencement
  213  has been filed for recording along with a copy thereof. The
  214  notice of commencement must shall contain the following
  215  information:
  216         1. A description sufficient for identification of the real
  217  property to be improved. The description should include the
  218  legal description of the property and also should include the
  219  street address and tax folio number of the property if available
  220  or, if there is no street address available, such additional
  221  information as will describe the physical location of the real
  222  property to be improved.
  223         2. A general description of the improvement.
  224         3. The name and address of the owner of record, the owner’s
  225  interest in the site of the improvement, and the name and
  226  address of the fee simple titleholder, if other than such owner.
  227         4. The name and address of the tenant, or lessee, if the
  228  tenant A lessee who contracts for the improvements as is an
  229  owner as defined under s. 713.01(23) and must be listed as the
  230  owner together with a statement that the ownership interest is a
  231  leasehold interest.
  232         5.4. The name and address of the contractor.
  233         6.5. The name and address of the surety on the payment bond
  234  under s. 713.23, if any, and the amount of such bond.
  235         7.6. The name and address of any person making a loan for
  236  the construction of the improvements.
  237         8.7. The name and address within the state of a person
  238  other than himself or herself who may be designated by the owner
  239  as the person upon whom notices or other documents may be served
  240  under this part; and service upon the person so designated
  241  constitutes service upon the owner.
  242         (b) The owner, at his or her option, may designate a person
  243  in addition to himself or herself to receive a copy of the
  244  lienor’s notice as provided in s. 713.06(2)(b), and if he or she
  245  does so, the name and address of such person must be included in
  246  the notice of commencement.
  247         (c) If the contract between the owner and a contractor
  248  named in the notice of commencement expresses a period of time
  249  for completion for the construction of the improvement greater
  250  than 1 year, the notice of commencement must state that it is
  251  effective for a period of 1 year plus any additional period of
  252  time. Any payments made by the owner after the expiration of the
  253  notice of commencement are considered improper payments.
  254         (d) A notice of commencement must be in substantially the
  255  following form:
  256  
  257  Permit No.....                                 Tax Folio No.....
  258                       NOTICE OF COMMENCEMENT                      
  259  State of....
  260  County of....
  261  
  262  The undersigned hereby gives notice that improvement will be
  263  made to certain real property, and in accordance with Chapter
  264  713, Florida Statutes, the following information is provided in
  265  this Notice of Commencement.
  266         1. Description of property: ...(legal description of the
  267  property, and street address if available)....
  268         2. General description of improvement:.....
  269         3. Owner of record information or Lessee information if the
  270  Lessee contracted for the improvement:
  271         a. Name and address:.....
  272         b. Phone number:....Interest in property:.....
  273         c. Name and address of fee simple titleholder (if different
  274  from Owner listed above):.....
  275         4. Tenant (lessee) if tenant contracted for the
  276  improvement:
  277         a. Name and address:.....
  278         b. Phone number:.....
  279         5. Contractor:
  280         a. Name and address:.... ...(name and address)....
  281         b. Contractor’s Phone number:.....
  282         6.5. Surety (if applicable, a copy of the payment bond is
  283  attached):
  284         a. Name and address:.....
  285         b. Phone number:.....
  286         c. Amount of bond: $.....
  287         7.6.a. Lender: ...(name and address)...
  288         a. Name and address:.....
  289         b. Lender’s Phone number:.....
  290         8.7. Persons within the State of Florida designated by
  291  Owner upon whom notices or other documents may be served as
  292  provided by Section 713.13(1)(a)8. 713.13(1)(a)7., Florida
  293  Statutes:
  294         a. Name and address:.....
  295         b. Phone numbers of designated persons:.....
  296         9.a.8.a. In addition to himself or herself, Owner
  297  designates ............ of ............ to receive a copy of the
  298  Lienor’s Notice as provided in Section 713.13(1)(b), Florida
  299  Statutes.
  300         b. Phone number of person or entity designated by
  301  owner:.....
  302         10.9. Expiration date of notice of commencement (the
  303  expiration date will be 1 year from the date of recording unless
  304  a different date is specified).....
  305  
  306  WARNING TO OWNER: ANY PAYMENTS MADE BY THE OWNER AFTER THE
  307  EXPIRATION OF THE NOTICE OF COMMENCEMENT ARE CONSIDERED IMPROPER
  308  PAYMENTS UNDER CHAPTER 713, PART I, SECTION 713.13, FLORIDA
  309  STATUTES, AND CAN RESULT IN YOUR PAYING TWICE FOR IMPROVEMENTS
  310  TO YOUR PROPERTY. A NOTICE OF COMMENCEMENT MUST BE RECORDED AND
  311  POSTED ON THE JOB SITE BEFORE THE FIRST INSPECTION. IF YOU
  312  INTEND TO OBTAIN FINANCING, CONSULT WITH YOUR LENDER OR AN
  313  ATTORNEY BEFORE COMMENCING WORK OR RECORDING YOUR NOTICE OF
  314  COMMENCEMENT.
  315  
  316  ...(Signature of Owner or Tenant (Lessee) Lessee, or Owner’s or
  317  Tenant’s (Lessee’s) Lessee’s Authorized
  318  Officer/Director/Partner/Manager)...
  319  
  320  ...(Signatory’s Title/Office)...
  321  
  322  The foregoing instrument was acknowledged before me this ....
  323  day of ...., ...(year)..., by ...(name of person)... as ...(type
  324  of authority, . . . e.g. officer, trustee, attorney in fact)...
  325  for ...(name of party on behalf of whom instrument was
  326  executed)....
  327  
  328  ...(Signature of Notary Public - State of Florida)...
  329  
  330  ...(Print, Type, or Stamp Commissioned Name of Notary Public)...
  331  
  332         Personally Known .... OR Produced Identification ....
  333  
  334         Type of Identification Produced............
  335  
  336         (e) A copy of any payment bond must be attached at the time
  337  of recordation of the notice of commencement. The failure to
  338  attach a copy of the bond to the notice of commencement when the
  339  notice is recorded negates the exemption provided in s.
  340  713.02(6). However, if a payment bond under s. 713.23 exists but
  341  was not attached at the time of recordation of the notice of
  342  commencement, the bond may be used to transfer any recorded lien
  343  of a lienor except that of the contractor by the recordation and
  344  service of a notice of bond pursuant to s. 713.23(2). The notice
  345  requirements of s. 713.23 apply to any claim against the bond;
  346  however, the time limits for serving any required notices shall,
  347  at the option of the lienor, be calculated from the dates
  348  specified in s. 713.23 or the date the notice of bond is served
  349  on the lienor.
  350         (f) The giving of a notice of commencement is effective
  351  upon the filing of the notice in the clerk’s office.
  352         (g) The owner must sign the notice of commencement and no
  353  one else may be permitted to sign in his or her stead.
  354         Section 5. Paragraph (a) of subsection (3) of section
  355  713.18, Florida Statutes, is amended to read:
  356         713.18 Manner of serving notices and other instruments.—
  357         (3)(a) Service of an instrument pursuant to this section is
  358  effective on the date of mailing or shipment of the instrument
  359  if it:
  360         1. Is sent to the last address shown in the notice of
  361  commencement or any amendment thereto or, in the absence of a
  362  notice of commencement, to the last address shown in the
  363  building permit application, or to the last known address of the
  364  person to be served; and
  365         2. Is returned as being “refused,” “moved, not
  366  forwardable,” or “unclaimed,” or is otherwise not delivered or
  367  deliverable through no fault of the person serving the item.
  368         Section 6. Subsection (8) of section 713.20, Florida
  369  Statutes, is amended to read:
  370         713.20 Waiver or release of liens.—
  371         (8) A provision in a lien waiver or lien release executed
  372  on or after July 1, 2020, which that is not related to the
  373  waiver or release of lien rights as contemplated by this section
  374  is unenforceable substantially similar to the forms in
  375  subsections (4) and (5) is enforceable in accordance with the
  376  terms of the lien waiver or lien release.
  377         Section 7. Paragraph (d) of subsection (1) of section
  378  713.23, Florida Statutes, is amended to read:
  379         713.23 Payment bond.—
  380         (1)
  381         (d) In addition, a lienor who has not received payment for
  382  furnishing his or her labor, services, or materials must, as a
  383  condition precedent to recovery under the bond, serve a written
  384  notice of nonpayment to the contractor, and a copy of the notice
  385  to the surety. The notice must be under oath and served during
  386  the progress of the work or thereafter, but may not be served
  387  later than 90 days after the final furnishing of labor,
  388  services, or materials by the lienor, or, with respect to rental
  389  equipment, later than 90 days after the date the rental
  390  equipment was on the job site and available for use. A notice of
  391  nonpayment that includes sums for retainage must specify the
  392  portion of the amount claimed for retainage. The required notice
  393  satisfies this condition precedent with respect to the payment
  394  described in the notice of nonpayment, including unpaid finance
  395  charges due under the lienor’s contract, and with respect to any
  396  other payments which become due to the lienor after the date of
  397  the notice of nonpayment. The time period for serving a notice
  398  of nonpayment shall be measured from the last day of furnishing
  399  labor, services, or materials by the lienor and may not be
  400  measured by other standards, such as the issuance of a
  401  certificate of occupancy or the issuance of a certificate of
  402  substantial completion. The failure of a lienor to receive
  403  retainage sums not in excess of 10 percent of the value of
  404  labor, services, or materials furnished by the lienor is not
  405  considered a nonpayment requiring the service of the notice
  406  provided under this paragraph. If the payment bond is not
  407  recorded before commencement of construction, the time period
  408  for the lienor to serve a notice of nonpayment may at the option
  409  of the lienor be calculated from the date specified in this
  410  section or the date the lienor is served a copy of the bond.
  411  However, the limitation period for commencement of an action on
  412  the payment bond as established in paragraph (e) may not be
  413  expanded. The negligent inclusion or omission of any information
  414  in the notice of nonpayment that has not prejudiced the
  415  contractor or surety does not constitute a default that operates
  416  to defeat an otherwise valid bond claim. A lienor who serves a
  417  fraudulent notice of nonpayment forfeits his or her rights under
  418  the bond. A notice of nonpayment is fraudulent if the lienor has
  419  willfully exaggerated the amount unpaid, willfully included a
  420  claim for work not performed or materials not furnished for the
  421  subject improvement, or prepared the notice with such willful
  422  and gross negligence as to amount to a willful exaggeration.
  423  However, a minor mistake or error in a notice of nonpayment, or
  424  a good faith dispute as to the amount unpaid, does not
  425  constitute a willful exaggeration that operates to defeat an
  426  otherwise valid claim against the bond. The service of a
  427  fraudulent notice of nonpayment is a complete defense to the
  428  lienor’s claim against the bond. The notice under this paragraph
  429  must include the following information, current as of the date
  430  of the notice, and must be in substantially the following form:
  431  
  432                        NOTICE OF NONPAYMENT                       
  433  
  434  To ...(name of contractor and address)...
  435  
  436  ...(name of surety and address)...
  437  
  438  The undersigned lienor notifies you that:
  439         1. The lienor has furnished ...(describe labor, services,
  440  or materials)... for the improvement of the real property
  441  identified as ...(property description).... The corresponding
  442  amount unpaid to date is $...., of which $.... is unpaid
  443  retainage.
  444         2. The lienor has been paid to date the amount of $.... for
  445  previously furnishing ...(describe labor, services, or
  446  materials)... for this improvement.
  447         3. The lienor expects to furnish ...(describe labor,
  448  services, or materials)... for this improvement in the future
  449  (if known), and the corresponding amount expected to become due
  450  is $.... (if known).
  451  
  452  I declare that I have read the foregoing Notice of Nonpayment
  453  and that the facts stated in it are true to the best of my
  454  knowledge and belief.
  455  
  456  DATED on ............, .........
  457  
  458  ...(signature and address of lienor)...
  459  
  460  STATE OF FLORIDA
  461  COUNTY OF........
  462  
  463  The foregoing instrument was sworn to (or affirmed) and
  464  subscribed before me this .... day of ...., ...(year)..., by
  465  ...(name of signatory)....
  466         ...(Signature of Notary Public - State of Florida)...
  467         ...(Print, Type, or Stamp Commissioned Name of Notary
  468  Public)...
  469  
  470  Personally Known ........ OR Produced Identification ........
  471  
  472  Type of Identification Produced.................................
  473         Section 8. Subsection (5) of section 713.235, Florida
  474  Statutes, is amended to read:
  475         713.235 Waivers of right to claim against payment bond;
  476  forms.—
  477         (5) A provision in a waiver or a release executed on or
  478  after July 1, 2020, which that is not related to the waiver or
  479  release of a claim against the payment bond as contemplated by
  480  this section is unenforceable substantially similar to the forms
  481  in this section is enforceable in accordance with its terms.
  482         Section 9. This act shall take effect July 1, 2020.