1. The 2019 Florida Legislature made significant changes to the payment bond claim requirements on private projects under section 713.23, Florida Statutes.
2. These changes become effective on October 1, 2019, and it is important for subcontractors, suppliers, and laborers to understand the new requirements to ensure they comply and do not lose their right to payment from the payment bond surety insurance.
3. A payment bond is a three-party agreement between a property owner, general contractor, and surety that guarantees payment to subcontractors, laborers, and material suppliers for their work on a construction project.
4. The changes to the payment bond claim requirements primarily relate to the statutory form of the notice of nonpayment, consequences of intentionally or recklessly exaggerating the claim in the notice of nonpayment, and the timing of the notice relative to claims related to rental equipment. 1. All potential claimants must serve a written notice of nonpayment to the contractor and surety no later than 90 days after their final work on the project in order to make a claim against a payment bond.
2. House Bill 1247 made changes to the requirements for the notice of nonpayment, including a new statutory form and additional required information.
3. The new notice of nonpayment must include the name and address of the contractor and surety, details of the labor/services and materials provided, amount paid and due, and the notice provider’s signature and address.
4. All statements in the notice of nonpayment must now be made under oath and include a declaration of truth.
5. Failure to comply with these requirements could result in losing or impairing rights under the payment bond. 1. House Bill 1247 establishes a concept of fraudulent notice of nonpayment, where a claimant will lose all rights under the payment bond if they serve a fraudulent notice by willfully exaggerating the amount due, including a claim for work not performed, or preparing the notice with willful and gross negligence.
2. A minor mistake or good faith dispute as to the amount due will not defeat a valid claim against the bond, but a negligent inclusion or omission of information will not be a valid claim unless it prejudices the contractor or surety.
3. Effective October 1, 2019, the time limit to serve notice of nonpayment for rental equipment has been changed. The notice must now be served no later than 90 days after the last date the rental equipment was on the job site and available for use. – Key changes to section 713.23, Florida Statutes, affect payment bonds on private construction projects.
– Claimants on privately bonded projects, including subcontractors, suppliers, and laborers, need to understand and comply with the changes effective October 1, 2019.
– It is important for construction industry participants to consult with experienced construction law attorneys regarding any specific issues or questions regarding payment bond claims and notice requirements.
https://www.jimersonfirm.com/blog/2019/06/florida-construction-payment-bond-claim-surety-insurance/
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