Jimerson Birr Law Firm (www.jimersonfirm.com) had a great article on their blog regarding upcoming changes to Florida’s Private Project Payment Bond Claim Requirements.
According to the article “All Florida construction industry participants need to be aware of the significant new changes to the payment bond claim requirements on private projects under section 713.23, Florida Statutes, made by the 2019 Florida Legislature in House Bill 1247.[ These changes become effective on October 1, 2019, and understanding the new requirements is critical for subcontractors, suppliers and laborers to ensure they comply and do not lose their right to payment from the payment bond surety insurance, and for owners, contractors and sureties to assess the validity of such claims.”
What is a payment bond? “A payment bond is a three-party agreement between a property owner, general contractor, and surety by which the surety guarantees that the contractor will pay subcontractors, laborers, and material suppliers for their work on a construction project. When a payment bond is in place on a project, it serves as the security for payment in lieu of the typical right subcontractors, laborers and suppliers would have to file a construction lien against the project. Instead, they are required to bring their claims against the payment bond, and any claim of lien filed against the property will be transferred to the bond. For this reason, it is critical for subcontractors, laborers and suppliers to know and comply with the payment bond claim requirements on bonded projects to ensure their right to payment under the bond should they not receive payment for their work. In fact, a failure to comply with the statutory requirements may result in a loss of the right to recover payment from the bond at all.”
What are the Key Changes for Payment Bond Claims? “All of the specific changes to section 713.23, Florida Statutes, made by House Bill 1247, can be viewed at the following link: H.R. 1247, 26th Leg., C.S.C.S. (Fla. 2019). The key changes primarily relate to the statutory form of the notice of nonpayment that must be served on the contractor and surety, the consequences of intentionally or recklessly exaggerating the amount or nature of the claim in the notice of nonpayment, and the timing of the notice relative to claims related to rental equipment.”
The blog continues to go more in depth as to Notice of Non-Payment (NNP), Fraudulent NNPS, Time Limits to serve such notices, etc.
To read the full article CLICK HERE. While you are there, I recommend taking a moment to read their other blogs, which are quite informative; you could even subscribe to their newsletter to get future updates as well.
