Florida State Bill 622 was introduced in mid-January of 2021 by Senator Keith Perry. If enacted, this bill would make numerous technical changes to the Florida mechanics lien and payment bond claim processes.
Let’s take a look at some of the proposed changes that would be made if this bill is signed by Governor DeSantis.
Potential changes to Florida construction laws
Although this bill is still in its early stages, it’s important to keep an eye on any and all changes that may affect your rights to payment as a contractor. If enacted, these amendments won’t go into effect until July 1, 2021.
You can read the full text of FL SB 622 here. In the meantime, here’s a quick review of some of the more prominent changes that would go into effect if enacted.
Proposed changes: Florida construction lien law
The proposed amendments to the Florida construction lien laws would make some significant changes that contractors should take note of.
Expanded definitions for “Contractor” and “Real Property”
The definitions under Fla. Stat. §713.01 would be expanded as follows:
The “contractor” definition will be expanded to include “a licensed general contractor or building contractor, as those terms are defined in s. 489.105(3)(a) and (b) respectively, who provides construction management services, which include responsibility for scheduling and coordination in both reconstruction and construction phases and for the successful, timely, and economical completion of the construction project, or who provides program management services, which include responsibility for schedule control, cost control, and coordination in providing or procuring planning, design, and construction.
Real Property would also include “a private leasehold interest that is improved, and the improvements thereon, on land that is owned by the state or any county, municipality, school board, or governmental agency, commission, or political subdivision.”
Liens under multiple direct contracts
Under Fla. Stat. §713.09, the proposed changes will allow potential lien claimants to file a single claim of lien if working under multiple direct contracts.
The direct contracts must all be with the same owner of all lots, parcels, or tracts of land that the lien is to be recorded against.
Lien exception for mobile home leasehold interests
The extent of a construction lien is governed by Fla. Stat. §713.10. If this bill is enacted, the statute will SB 622 is enacted — and liens will not be available for improvements made by a lessee when the lessee is a mobile homeowner who is leasing the mobile home lot in a mobile home park from a lessor.
Notice of Commencement changes
- The lessor’s name and address must be included if the project is a tenant improvement, in addition to the owner’s information;
- Any payments made prior to the recording of the NOC would be considered “improper payments;” &
- An NOC would be able to be signed through the use of online notarization.
Notice of Termination changes
Changes are also proposed for Fla. Stat. §713.132 regulating a Notice of Termination (NOT) as well. These amendment would be as follows:
- The NOT must include the Notice of Commencement’s official reference number and recording date
- Requiring that a copy of the NOT be served on each lienor who timely served a Notice to Owner after the NOT has been recorded, and a statement to that effect on the NOT itself
- An owner will be allowed to file a NOT at any time after all lienors have been paid
- A copy of the NOT must be served on all direct claimants and lienors who timely provided a Notice to Owner before the termination notice becomes valid and effective
Service requirement updates
The manner of serving certain notices, claims, etc., under Fla. Stat. §713.18, would be updated as follows:
- The service requirements would cover all documents under Florida’s construction lien laws, as well as all documents required to make a payment bond claim on public works and public transportation projects
- Service can be accomplished by hand delivery, a common carrier or certified mail to the person to be served, or, if service can’t be accomplished by these methods, then by posting the notice on the site of improvement
- The presumption of service conditions will no longer apply to the Notice to Owner/Notice to Contractor requirements to make a claim on a private payment bond
- Documents must be sent to the address listed in the Notice of Commencement, but if a NOC isn’t recorded or is improperly indexed, then it should be sent to the last known address obtained from public records unless the statute states otherwise
Lien waiver rules
- Parties requiring a form other than the statutory waivers in exchange for, or to induce payment, unless the parties agree otherwise in their contract
- Any additional provisions included in a lien waiver that aren’t “lien-related” are void and unenforceable, again, unless the parties agree otherwise in the terms of the contract
The lien discharge statute Fla. Stat. §713.21 will be amended to include:
- The ability to release a lien “in whole or in part”
- Lien releases must be notarized and include the official record reference number and the recording date of the lien to be released
Private payment bond claim requirements
- A copy of the Notice of Nonpayment must be served on the surety, in addition to the general contractor;
- Notices of Nonpayment would be able to be executed through online notarization;
- Reiterates that non-statutory waivers cannot be required unless provided in the contract, and non-lien-waiver-related provisions will be considered unenforceable unless agreed to in the contract between the parties
Attorney fees for bonded-off lien claims
Lastly, one more change would be enacted under the construction lien laws concerning §713.29‘s award of attorney fees. Under the new amendments, when liens are bonded off and an enforcement action ensues, the prevailing party will be entitled to reasonable attorney fees.
Florida public payment bond claim law proposed changes
In addition to the changes that would be made to Florida’s construction lien laws, there are some minor changes to the FL public payment bond claim process as well. Note: The changes to these procedures are either incorporated into the aforementioned amendments or mirror the same requirements.
Public works projects
The provisions of Fla. Stat. §255.05 would be amended to also include:
- The requirements that a Notice of Nonpayment be served on the surety as well as the GC
- Online notarization allowed for Notices of Nonpayment
- Non-statutory waivers cannot be required, nor include any additional provisions, unless agreed upon by both parties in their contract
- The amended service requirements under §713.18 will apply to the Notice of Nonpayment
Public maintenance requirements
Fla. Stat. §337.18 would also be modified to include similar provisions, such as:
- Service requirements of all documents under this section must be in accordance with the amended requirements under §713.18
- Prohibition on non-statutory waivers and additional provisions, unless otherwise agreed upon
It’s never too early to be prepared
Again, these proposed amendments under SB 622 have only been introduced a month ago — and if enacted wouldn’t make any substantive changes until July.
But it’s never too early to get a sense of what changes you may need to make to your documents or processes. We’ll be keeping a close eye on this bill, and post any updates on its progress.