What You Need to Know
- The notice of nonpayment, which has been a prerequisite to a payment bond claim for a long time, must now be made under oath using a statutorily prescribed form.
Before Florida’s 2019 legislative session, subcontractors, sub-subcontractors, and material suppliers had to furnish a notice of non-payment as a condition to perfecting a payment bond claim. These requirements appeared in § 255.05 (applicable to virtually all public projects) and § 713.23 (applicable to private projects where the contractor furnishes a payment bond). Under both §255.05 and §713.23, the notice of nonpayment had to be given within 90 days of “final furnishing” and had to be served on both the bonded contractor and the surety that issued the bond. These requirements still exist after the 2019 legislative amendments.
The 2019 legislature amended §255.05 and §713.23 to impose additional requirements. The amendments require that notices of nonpayment must be in substantially the same form as the one now set forth in the statutes. The form requires the following information as of the date that the notice of nonpayment is made:
- A description of the labor, services and materials and the property improved, and statement of the amount unpaid to date and the amount that is unpaid retainage;
- A statement of the amount of payment paid to the claimant; and
- A description of the labor, materials, and services the claimant expects to furnish and the corresponding amount to become due, if known.
Further, the amendments require that the notices of nonpayment must be executed under oath and notarized.
Additionally, both §255.05 and §713.23 have been amended to provide bonded contractors and their sureties with a new defense. The 2019 amendments provide that a notice of nonpayment is fraudulent if (a) the amount claimed as being unpaid is willfully exaggerated, (b) it willfully includes a claim for work not performed or materials not furnished for the subject improvement, or (c) is prepared with such willful and gross negligence as to amount to a willful exaggeration. A claim against the payment bond will be barred by a finding that the notice of nonpayment is fraudulent. However, the amendments also state that minor mistakes or errors, and good faith disputes as to the amount unpaid, do not constitute willful exaggeration that would operate to defeat a valid claim against the payment bond.
These amendments are effective October 1, 2019. Payment bond claimants who are not in privity with the bonded contractor should continue to serve preliminary notices on the contractor within 45 days of commencing work. All payment bond claimants, whether in privity with the bonded contractor or not, must utilize the statutory form for notice of nonpayment, which must be served on both the contractor and the surety within 90 days of last work.
If you have any questions about the preparation of any of these documents or what is required to meet the statutory requirements to “serve” them, just give us a call.
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