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How Will Changes to the Payment Bond Law Affect Subcontractors and Suppliers? Joshua B. Loren and Bruce E. Loren | Oct 23 2019

Florida’s Legislature amended the statutory requirements to perfect a payment bond claim, which became effective October 1, 2019. These changes affect both Fl. Stat. §255.05 and §713.23, which govern public and private bond claims. Subcontractors, sub-subcontractors and suppliers now have additional requirements to include in a notice of nonpayment.

The amendment requires that claimants provide the following new information:

  • The nature of labor or serviced performed or to be performed;
  • The materials furnished or to be furnished; and
  • The amount already paid on the account, the amount owed, and the amount to become due (including the portion of the amount that is withheld for retainage).

The most important change is that 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 notice must be notarized, and served anytime during the progress of the work, but no later than 90 days after the final furnishing of labor, services, or materials. For rental equipment, this is the last day that the equipment was on the job site and available for use.

The signed oath now means that Florida's payment bond law now has a fraudulent notice concept, similar to a fraudulent construction lien. Under the new statute, if a fraudulent notice of nonpayment is served, the claimant may forfeit all of their rights to the bond. A notice of nonpayment may be considered fraudulent under any of the following circumstances:

  • If the claimant willfully exaggerates the amount due;
  • If the claimant willfully includes a claim for work not performed or materials not further; or
  • If the claimant prepares the notice of nonpayment with willful and gross negligence resulting in a willful exaggeration.

The more information that is required means more possibility for error. When preparing a notice of nonpayment, lienors should take care that they calculate the unpaid amount and itemize the labor and materials provided carefully.

This is only a general summary of the changes to Florida’s payment bond law. If you have any specific questions concerning payment bond claims or best practices do not hesitate to contact an attorney experienced in construction law.

Joshua B. Loren and Bruce E. Loren of Loren & Kean Law are based in Palm Beach Gardens and Ft. Lauderdale. Loren & Kean Law is a boutique law firm concentrating in construction law and employment law. Bruce Loren focuses his practice on construction litigation and has been Certified by the Florida Bar in Construction Law since 2006. The firm represents contractors and owners in a wide range of disputes, including payment bond claims, lien disputes, construction defects, and project delays. They can be reached at jloren@lorenkeanlaw.com or bloren@lorenkeanlaw.com or 561-615-5701.