– Senate Bill 346 (SB 346) was signed into law by Florida Governor Ron DeSantis on May 25, 2023.
– The bill, effective on July 1, 2023, makes changes to prompt payment and retainage requirements on contracts between state and local governments and construction contractors in Florida.
– Changes include the creation of punch lists, prompt payment of retainage, and payment dispute processes for government construction projects. – If a contractor fails to coordinate with the local government to create a punch list in the required timeframe, the local government may withhold 150 percent of the estimated costs required to complete the items on the punch list and still pay the contractor the remaining contract balance, including retainage.
– If a contractor fails to coordinate with the state governmental entity, the government is not required to process the contractor’s payment request for retainage.
– Once the contractor completes all the items on the punch list, they may submit a payment request for the amount that had been withheld based on the estimated costs to complete the punch list.
– If a good faith dispute exists as to whether one or more items on the punch list has been completed in accordance with the contract, the government entity may continue to withhold up to 150% of the total costs to complete those items.
– The local government must commence dispute resolution proceedings to resolve the dispute within 30 days after the payment request is submitted and issue a final decision within 45 days after the date the payment request was received.
– The recent changes to Florida’s state and local government prompt payment and retainage laws provide additional clarity and important protections to construction contractors working with Florida state and local government entities on construction projects.
https://www.jimersonfirm.com/blog/2023/07/new-florida-statute-changes-retainage-and-prompt-pay-requirements-on-state-and-local-government-construction-projects/
Leave a Reply