NORTHEAST FLORIDA CONSTRUCTION LAW FIRM SERVING, DUVAL, CLAY, NASSAU, ST. JOHNS, FLAGLER AND BAKER COUNTIES
Notice of Commencement: It is the Owner’s mandatory duty (or lender’s duty in the event of a construction loan) to record a Notice of Commencement prior to starting construction of improvements to property with the following exceptions: a) professional services only pursuant to §713.03, Florida Statutes, e.g., design services, b) subdivision improvements pursuant to §713.04, Florida Statutes, c) a prime contract for less than $2,500.00, and d) a prime contract for HVAC repair or replacement less than $7,500.00. The lender assumes the owner’s duty to record the Notice of Commencement where there is a construction loan. No person except the owner has a cause of action against the lender for the lender’s failure to record the Notice of Commencement.
The Owner has a duty to post a certified copy of the Notice of Commencement at the job site, even if the lender has assumed the duty to record the Notice of Commencement. The statute requires the posting of a certified copy, but does not require that a certified copy be maintained at the job site, for any period of time after it is posted (and perhaps removed by others). The effect of a situation where the Notice of Commencement is recorded but not posted, is unclear.
Notice to Owner: The purpose of the Notice to Owner is to inform the owner that potential lienors who do not have a contract with the owner, may make a claim against the owner’s property to secure their unpaid debt created in improving the property. The Notice allows the owner to be protected and effectively impound monies that ordinarily would go to the contractor. A Notice to Owner is a mandatory procedural requirement for a lienor not dealing directly with the owner in order to have a construction lien. A Notice to owner need not be served by a lienor who is in privity with the owner, or the owner’s agent.
The Notice to owner must be served not later than 45 days from when the lienor commences furnishing materials and/or labor at the site pursuant to an authorized contract. However, a Notice to Owner must be served prior to the final payment being made in reliance on a contractor’s final affidavit. The information necessary to prepare a Notice to Owner, i.e., owner’s name and address and property description, may be obtained from the Notice of Commencement, if one exists. If there is no Notice of Commencement, it has been held that the Owner is estopped to deny service of a Notice to Owner served to an address (and an agent) named in a deed. On the other hand, a defective notice of commencement does not excuse the requirement of preparing and serving a notice to owner. Failure to include the statutorily prescribed warnings in the notice to owner is fatal to establishing a lien.
Performance Bonds: Generally speaking, a performance bond is a contract binding the person(s) signing the bond (i.e., the surety. Or the principal and surety) to liability up to a sum certain on default of the obligations of the contract described in the bond. The language of the bond is critical. Generally, a surety’s liability on a performance bond is determined strictly from the terms and conditions of the bond. A performance bond may be given pursuant to the authority of a statute which prescribes the coverage and procedure for recovery under the bond. If the bond refers to a particular contract such that it is either attached to, or incorporated by reference in the bond, the contract language is a part of the bond.
Payment Bonds: Where an exemptory payment bond is in effect, the liens of persons working under the bonded contract, other than the general contractor, are secured by the bond rather than by the real estate. Accordingly, it would be a defense to a lien enforcement action to show that a §713.23, F.S., payment bond was in effect for the improvements that are the subject of the lien. The liens of persons furnishing services or materials not included under the contract for which the payment bond is furnished are not affected by the payment bond.
Lien Transfer Bond: Lien transfer security is either a surety bond or a cash deposit with the clerk of court for the purpose of clearing the title to the real estate and transferring the lienor’s security interest, or claim, from the real estate to the transfer security. The lien transfer security may be undertaken by any person with an interest in the property upon which the claim was made, or by any person with an interest in the contract under which the lien is claimed. A person who does not have any interest in the contract under which the lien was claimed does not claimed does not have a right to post a lien transfer bond. Where a §713.23, F.S. bond is in effect, that bond may be used to transfer any liens recorded under the bonded contract by recording a notice of bond. This is true even if there was lack of compliance I attaching a copy of the bond to the notice of commencement when the notice of commencement was recorded.
Sworn Statement of Account: The construction lien law imposes duties to furnish information on all parties to construction contracts. Because it is impossible to claim a debt due and a secured obligation from someone to whom there is no direct contractual obligation, i.e., no privity of contract, the construction lien law provides a method of gathering the information necessary to deal with those duties.
The owner, at any time, may request from any lienor a copy of the lienor’s contract and a statement of the amount due or to become due, if this amount is fixed or ascertainable. There is no duty to furnish a periodic sworn statement of account, as distinguished from a contractor’s final affidavit, absent a written request.
The failure to furnish the statement of account or copy of contract in response to a request results in a cause of action against the lienor failing to furnish the information of any damages to the other party sustained thereby. There is no specific form required for this request. The owner may serve a demand in writing requesting from any lienor a written statement under oath showing:
- The nature of labor or services performed;
- The nature of labor or services to be performed, if any;
- The materials to be furnished;
- The materials to be furnished, if known;
- The amount paid on account to date;
- The amount due;
- The amount to become due if known as of the date of the statement.
Notice of Contest of Lien: A notice of contest of lien is a means of bringing controversies involving the lien to a head. It may be signed and recorded by an owner, or the owner’s attorney. The effect of recording the notice if contest of lien is to shorten the duration of the lien from the standard time of one year to 60 days from the stated date of the service of the notice of contest of lien on the lienor, in the notice of contest of lien. The date of service of the notice of contest of lien is not included in the 60-day period. The filing of an amended claim of lien after the notice of contest of lien has been recorded, does not restart the 60-day period. When the notice of contest of lien is recorded, the clerk will serve a copy of the notice of contest of lien to the lienor.
A notice of contest of lien has two peculiar characteristics. First, the notice of contest of lien applies both to the lien and to claims against §713.23, F.S. payment bonds. This application to the bond is unusual, because the language of the notice of contest of lien refers to a claim of lien that has been recorded. Secondly, the notice of contest of lien need only be served by the clerk on the lienor by regular mail. The clerk certifies that there was service of the notice of contest of lien. This is a rare instance in which service is complete on mailing rather than on receipt.
The Construction documents listed above are not all of the construction documents that may be employed in the construction of a project constructing improvements to real property. These documents are the most commonly used construction documents in use today. All of these documents, in order to be effective and to achieve their maximum purpose, must be filed or served within specific and rigid time periods and be in the proper form when filed or served.
Due to the nature and complexities of these documents and the rights and remedies they afford when properly used and complex. Therefore, whether you are the property owner, prime contractor or a subcontractor, it is essential that you have an experienced construction attorney to assist you in the drafting, filing and service of these documents as well as any of the other construction documents not mentioned herein.
At Daniel M. Copeland, Attorney at Law, P.A., as a former contractor and land developer, we possess the knowledge and experience necessary to guide you successfully through the maze of construction laws and documents. If you are contemplating starting a construction project, need to file a claim of lien or one has been filed against you, experienced defective construction or have any other issue relating to the construction process or documents, call us immediately. We are here and ready to help.
Please note, all information contained herein is provided for general informational purposes only. The information herein is not intended as legal advice and should not be relied upon as such. Different factual scenarios may yield different results. In addition, several other factors must be considered in each individual case, and those factors can only be ascertained by speaking directly with an attorney.
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