Florida Construction Liens and Bonds: Beware of the Notice to Owner and Notice to Contractor Requirement
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Florida construction lien and bond law is filled with many requirements that must be strictly followed and that are strictly construed by Florida courts. Indeed, the Florida Construction Lien Law of Chapter 713 of the Florida Statutes, governing private construction projects, is designed to help ensure payment for work performed and to protect owners from paying for work more than once.
While a notice to owner (construction liens) and a notice to contractor (construction bonds) do not perfect one’s lien or bond rights, missing the deadline for serving these documents is fatal to one’s lien/bond rights. See Fla. Stat. Sections 713.06 and 713.23. Likewise, a party who fails to monitor timely notices to owner/notices to contractor may fall victim to paying for work twice. In many instances, lienors/bond claimants miss the deadline to serve these notices by a mere day or two, which is a complete defense to their lien or bond claim.
Reminders for Lienors/Bond Claimants:
Assuming a party fits the definition of lienor under Chapter 713 and that person does not have a contract with the owner (with some exceptions), that party must serve a notice to owner prior to or within 45 days of starting work on a project. The notice to owner form is provided by statute and should be used to ensure against any allegation that the notice was improper. See Fla. Stat. Section 713.06
In the event the construction project is bonded, a person not in privity of contract with the general contractor must serve a notice to contractor prior to or within 45 days of beginning to furnish labor, materials or supplies at a project. See Fla. Stat. Section 713.23.
Reminders For Owners and Contractors Receiving Notices:
As an owner or general contractor, if you receive a notice to owner/notice to contractor, this is notice to you of persons performing work on the project and who will seek payment for such work. Owners and contractors, therefore, should keep a list of all such persons. In addition, before making any further payments in connection with the project, an owner or general contractor must make sure each has obtained lien/bond waivers from each such person/entity. Any payments made without receiving lien/bond waivers from persons serving notices to owner/contractor may result in paying twice for this work. Chapter 713 provides for the form of such lien/bond waivers. See Fla. Stat. Sections 713.20 (liens) and 713.25 (bonds).
In addition, prior to making a final payment to the general contractor, one should obtain a final payment affidavit from the general contractor. See Fla. Stat. Section 713.06. That document should tell you who has not been paid for work on the project, so one can better protect against paying for work twice.
Timing of Notices:
The timing of service of a notice to owner/notice to contractor is critical. While Florida law provides that such notices must be served within 45 days of first furnishing labor and materials, the timing can be more complicated depending on the circumstances.
First, and absent certain circumstances, the notice must be received by the owner or contractor no later than the 45th day of first furnishing services or materials to the project. “First furnishing” for purposes of determining the date for serving a notice to owner is the date services or materials are delivered to the project, not when the labor to install the materials is provided. See Stunkel v. Gazebo Landscaping Design, Inc. Second, the notice must be served in accordance with Section 713.18 of the Florida Statutes. When dealing with specially fabricated materials, the 45-day time period for serving a notice to owner begins when the materials are fabricated and not when they are delivered to the project.
The Florida Construction Lien Law is a complicated and ever changing set of statutes. Since the notice to owner/contractor is a critical component to perfecting lien/bond rights and ensuring proper payments, parties much be vigilant to protect their rights. When in doubt about how to proceed in serving or responding to such notices, a party should consult counsel.