Statutory Changes to Florida's Payment Bond Law

ATTENTION CONTRACTORS, SUBS AND SUPPLIERS!!!

FLORIDA LAW UPDATE

STATUTORY CHANGES TO FLORIDA’S PAYMENT BOND LAW

Effective October 1, 2019, the statutory requirements to perfect a payment bond claim in Florida have changed. Subcontractors, sub-subcontractors and suppliers need to pay particular attention to the changes which have now taken effect as it materially impacts bond claims.

Under prior law a notice of nonpayment generally required a lienor to specify:

1.      The name of the contractor and their address

2.      The name of the surety and their address

3.      The nature of the labor, services or materials furnished

4.      The amount due (and how much of that is for retainage)

5.      The lienor’s signature and address

House Bill 1247 added the following requirements to a notice of nonpayment:

1.      The nature of the labor or services to be performed

2.      The materials to be furnished

3.      The amount paid on the account/to date

4.      The amount to become due

5.      The notice of nonpayment must now be signed under oath with the following declaration, “I declare that I have read the foregoing Notice of Nonpayment and that the facts stated in it are true to the best of my knowledge and belief.”

The last requirement carries additional implications to a bond claim which did not exist prior to these changes. Similar to the idea of a fraudulent construction lien (Fla. Stat. 713.31), Florida’s payment bond law now has a fraudulent notice concept. The law now provides that a notice of nonpayment may be considered fraudulent if any of the following applies: (1) claimant willfully exaggerates the amount due; (2) claimant willfully includes a claim for work not performed or materials not further; or (3) prepares the notice of nonpayment with willful and gross negligence resulting in a willful exaggeration.

The new law also changes the time frame within which to serve the notice of nonpayment for rental equipment. Under the new law, a notice of nonpayment with respect to rental equipment must be served no later than 90 days after the equipment was on the project and available for use.

This article provides only a summary of the major changes to Florida’s payment bond law. Subcontractors, sub-subcontractors, suppliers and material men should consult with an experienced construction law attorney with respect to the changes highlighted herein and how they impact their payment bond claims and notices.