Stakeholders in the Florida construction industry need to be aware of changes to the law that took effect on Oct. 1, 2023. The revisions modify several statutes that deal with liens and bonds. Several new requirements are included. Among them: (1) a party seeking a lien must notify both the contractor and the contractor’s surety of claims of nonpayment. (2) When claims against payment bonds go to arbitration, the arbitrator can award attorney’s fees to the prevailing party. Several other changes have also been made to Florida lien law, so parties need to be prepared. Florida construction lawyer Jonathan P. Cohen, Esq. can help those in the construction industry understand how the changes might affect their businesses.
Broadening the Definition of Contractor
The new law, Florida H.B. 331, was signed by Gov. DeSantis on June 16, 2023. This law made multiple revisions to the Florida lien law. H.B. 331 broadened the definition of contractor as found in § 713.01, Fla. Stat. (2023) to include people who provide construction management services. The definition now includes licensed general contractors and building contractors who manage programs and construction projects, including scheduling the phases of a project, coordinating pre-construction and construction activities, coordinating project construction, design, and planning, and controlling costs and schedules.
Changes to Notices of Termination
Under the revised § 713.132, Fla. Stat. (2023), project owners can’t record notices of termination until they have served copies on every lienor with whom the owner has a direct contract or who properly served a notice on the owner. Once a notice of termination is served, the notice of commencement will be terminated 30 days after the owner records it or at a later date if called for in the notice of termination. If a lienor doesn’t have a direct contract with the project owner but timely served a notice to the owner and started work before the notice of termination was recorded by the owner, the owner will be required to serve that lienor with the notice of termination. The notice of termination will then be effective 30 days after it is served on that lienor.
Increase in Threshold Amount to For Notice of Commencement
H.B. 331 also changed the threshold amount for contracts to obtain building permits requiring people to file certified notice of commencement copies under § 713.135, Fla. Stat. (2023). Previously, the threshold was $2,500. The threshold will now be increased to $5,000. If a contract is valued at $5,000 or more, a certified copy of the commencement notice must be filed with the authorities when seeking a building permit before the initial inspection.
Award of Attorney’s Fees in Arbitration
Another important change to Florida lien law is an update to § 713.29 Fla. Stat. (2023). When a claim is filed against a payment bond for nonpayment and goes to arbitration, the arbitrator will now be allowed to calculate the attorney’s fees to award and award them to the prevailing party. Previously, attorney’s fees could not be awarded in arbitration on claims of nonpayment filed against payment bonds.
Changes to the Satisfaction and Release of Lien Requirements
H.B. 331 made some changes to § 713.21, Fla. Stat. (2023). When a satisfaction and release of a lien is recorded, it must now include the official reference number, recording date, and the notarized signature of the lienor.
New Nonpayment Notice Requirements for Claims Against Payment Bonds
The new law revised § 713.23, Fla. Stat. (2023) to require claimants who are seeking nonpayment claims against the payment bond to serve the nonpayment notice on both the surety company and the contractor. When the nonpayment was for renting equipment, the deadline for filing the notice of nonpayment is 90 days following the date the rented equipment was onsite and available for use.
Revision to the Calculation of Lien Transfer Bond Amounts
H.B. 331 also revised § 713.24, Fla. Stat. (2023) to increase the amount of calculated lien transfer bonds. When liens are transferred to security, the amount of bonds must now be calculated as equal to the demanded amount plus interest calculated at the legal rate for 36 months plus either 25% of the demanded amount or $5,000. The minimum threshold for calculating lien transfer bond amounts was also increased to $5,000. Previously, the minimum threshold was $1,000.
Fees for Prevailing Parties in Lien Enforcement Actions
The new Florida lien law made another change to § 713.29, Fla. Stat. (2023). In cases where the lien has been transferred to security, the prevailing party can now be awarded fees.
Consult a Florida Construction Lawyer
Navigating the changes to the Florida lien law can be complex, but construction contractors, subcontractors, suppliers, other lienors, and project owners must be prepared. An experienced Florida construction lawyer at the law firm of Jonathan P. Cohen, P.A. can advise you about how these revised statutes might affect your business. Call us today to schedule an appointment at (954) 462-8850.
The information provided in this article does not, and is not intended to, constitute legal advice. The content in this article is presented for general informational purposes only.