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Does a vendor have to file a Notice of Furnishing in the state of Florida when selling material directly to an owner?

FloridaBond ClaimsMechanics LienPreliminary NoticeRight to Lien

In Florida many exempt entities purchase from us (vendor) directly to avoid sales tax. When selling directly to an owner (BOE, Hospital, Church, County) do we need to file a Notice to Owner or Notice of Furnishing to retain lien rights? How would lien/bond rights work in this situation. Would we still have any protection should we not be paid?

1 reply

Feb 21, 2020
Suppliers on Florida construction projects won't need to send any kind of preliminary notice (or "Notice to Owner") when hired directly by the project owner. This is true both for public works and private improvements. Of course, there are still benefits to sending notice even when it isn't required - so, that doesn't mean preliminary notices should be thrown out the window. For a deep dive on Florida Notices to Owner, these two articles should provide some great information: (1) Florida’s Notice to Owner – How To Prepare & Send Your NTO; and (2) Florida NTO Guide & FAQs.

Mechanics lien and bond claim rights when hired by the project owner

Let's first look at mechanics lien rights, then move on to bond claim rights...

Florida mechanics lien rights for material suppliers

Supplies hired by the property owner will typically be entitled to mechanics lien rights on Florida public projects. And, since they won't have to worry about compliance with NTO requirements, it will usually be relatively to leverage or even utilize lien rights to get paid on Florida private projects.

Bond claim rights

However, for public works, there will likely be less protection. Generally, a public agency will hire a GC - then that GC will hire subs and suppliers for the job. To make sure those subs and suppliers get paid, the GC will typically have to provide a payment bond for the project. And, if unpaid, a claimant could file a bond claim against that GC's bond. However, if a supplier is hired directly by the public agency, then that bond protection likely wouldn't be there. And that makes sense - if a supplier wasn't hired by the GC or the GC's subs, then the supplier can't look to the GC's bond if the supplier goes unpaid. After all, that's entirely out of the GC's control. However, at the same time - public agencies are typically far better at paying their bills than the ordinary construction business. So, while there's less protection available, there's usually less risk. And, if push comes to shove, legal claims against the public agency would be on the table.
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