Earlier this week, Florida’s Governor signed House Bill 331, which included many changes to Chapter 713, Florida Statutes, better known as Florida’s Construction Lien Law. The changes include new definitions, clarification of time period calculations, changes to notices of commencement and notices of termination, and changes to lien transfer bond calculations. A new section of the statute is also created, and another section is also repealed. All people in the construction industry need to be up to date on the new statutory provisions.
The new law alters the following sections of Florida’s Construction Lien Law : 713.01, 713.10, 713.13, 713.132, 713.135, 713.18, 713.21, 713.22, 713.23, 713.24, and 713.29, Florida Statutes. The new bill also creates 713.011, Florida Statutes, and repeals 713.25, Florida Statutes. These changes are all addressed below, in order.
713.01
713.01, Florida STatutes, contains the definitions applicable to Florida’s construction lien law. The proposed changes and additions to this statute are outlined as follows:
"Clerk's office" means the office of the clerk of the circuit court of the county, or another office serving as the county recorder as provided by law, in which the real property is located.
The definition of “Contractor” is updated to include construction management, by adding the following language: The term also includes 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 scheduling and coordinating preconstruction and construction phases for the construction project, or who provides program management services, which include schedule control, cost control, and coordinating the provision or procurement of planning, design, and construction for the construction project.
The definition of final furnishing is updated as follows: "Final furnishing" means the last date that the lienor furnishes labor, services, or materials. Such date may not be measured by other standards, such as the issuance of a certificate of occupancy or the issuance of a certificate of final completion, and does not include the correction of deficiencies in the lienor's previously performed work or materials supplied. With respect to rental equipment, the term means the date that the rental equipment was last on the job site of the improvement and available for use.
The following definition of a “finance charge” is created: "Finance charge" means a contractually specified additional amount to be paid by the obligor on any balance that remains unpaid by the due date set forth in the credit agreement or other contract.
713.011
713.011, Florida STatutes, is created to specifically clarify how the various deadlines in Chapter 713, Florida Statutes, are calculated based on holidays, weekends, of clerk’s office closures, and states:
(1) In computing any time period under this part, if the last day of the time period is a Saturday, Sunday, or holiday specified in s. 110.117(1), or any day observed as a holiday by the clerk's office or designated as a holiday by the chief judge of the circuit, the time period is extended to the end of the next business day.
(2) If the clerk's office is closed in response to an emergency for 1 or more days so that a person may not present a document for recording or an action for filing in person with the clerk's staff, the time period for recording a document or filing an action with the clerk's office under this part is tolled. When the clerk's office reopens, the time period is extended to the end of the business day that equates to the number of days the clerk's office was closed.
713.10
The most significant change to this statute is that the portion applicable to mobile home leases and liens is removed from one section, added to another, and slightly adjusted. The deleted and replaced language are set forth below:
3. The lessee is a mobile home owner who is leasing a mobile home lot in a mobile home park from the lessor.
(4) The interest of the lessor is not subject to liens for improvements made by the lessee when the lessee is a mobile home owner who is leasing a mobile home lot in a mobile home park from the lessor.
713.13
713.13, Florida Statutes, governs notices of commencement, and is updated as follows:
NOCs must contain all of the information listed in the statute
The notary block on the notice of commencement is updated to allow online notarization
Other minor changes to make this statute consistent with other changes to Chapter 713, Florida Statutes
Building permit issuers must accept a recorded NOC from an owner or owner’s agent if it it in the form provided for in the statute.
713.132
713.132, Florida Statutes, governs notices of termination of notices of commencement. There are many modifications to this section of the statute, so the full text of the additions and deletions is as follows:
(1) An owner may terminate the period of effectiveness of a notice of commencement by executing, swearing to, and recording a notice of termination that contains all of the following:
(a) The same information that is in as the notice of commencement.;
(b) The official records' recording office document book and page reference numbers and recording date affixed by the recording office on of the recorded notice of commencement.;
(c) A statement of the date as of which the notice of commencement is terminated, which date may not be earlier than 30 days after the notice of termination is recorded.
(d) A statement specifying that the notice applies to all the real property subject to the notice of commencement or specifying the portion of such real property to which it 479 applies.
(e) A statement that all lienors have been paid in full.
(f) A statement that the owner has, before recording the notice of termination, served a copy of the notice of termination on the contractor and on each lienor who has a direct contract with the owner or who has timely served a notice to owner, and a statement that the owner will serve a copy of the notice of termination on each lienor who timely serves a notice to owner after the notice of termination has been recorded. The owner is not required to serve a copy of the notice of termination on any lienor who has executed a waiver and release of lien upon final payment in accordance with s. 713.20.
(3) An owner may not record a notice of termination at any time after except after completion of construction, or after construction ceases before completion and all lienors have been paid in full or pro rata in accordance with s. 713.06(4).
(4) If an owner or a contractor, by fraud or collusion, knowingly makes any fraudulent statement or affidavit in a notice of termination or any accompanying affidavit, the owner and the contractor, or either of them, as the case may be, is liable to any lienor who suffers damages as a result of the filing of the fraudulent notice of termination, and any such lienor has a right of action for damages occasioned thereby.
(5)(4) A notice of termination must be served on each lienor who has a direct contract with the owner and on each lienor who has timely and properly served a notice to owner in accordance with this part before the recording of the notice of termination. A notice of termination must be recorded in the official records of the county in which the improvement is located. If properly served before recording in accordance with this subsection, the notice of termination terminates the period of effectiveness of the notice of commencement 30 days after the notice of termination is recorded in the official records is effective to terminate the notice of commencement at the later of 30 days after recording of the notice of termination or a later the date stated in the notice of termination as the date on which the notice of commencement is terminated. However, if a lienor who began work under the notice of commencement before its termination lacks a direct contract with the owner and timely serves his or her notice to owner after the notice of termination has been recorded, the owner must serve a copy of the notice of termination upon such lienor, and the termination of the notice of commencement as to that lienor is effective 30 days after service of the notice of termination, if the notice of termination has been served pursuant to paragraph (1)(f) on the contractor and on each lienor who has a direct contract with the owner or who has served a notice to owner.
713.135
This statute is modified to require the authority issuing a permit to require the following with regard to a notice of commencement for the project:
(e) Require If the direct contract is greater than $2,500 the applicant to shall file with the issuing authority before prior to the first inspection either a certified copy of the recorded notice of commencement if the direct contract is greater than $2,500. For purposes of this paragraph, the term "copy of the notice of commencement" means a certified copy of the recorded notice of commencement, or a notarized statement that the notice of commencement has been filed for recording, along with a copy thereof, or the clerk's office's official records identifying information that includes the instrument number for the notice of commencement or the number and page of book where the notice of commencement is recorded, as identified by the clerk.
1. In the absence of the filing of a certified copy of the recorded notice of commencement, the issuing authority or a private provider performing inspection services may not perform or approve subsequent inspections until the applicant files by mail, facsimile, hand delivery, or any other means such certified copy with the issuing authority.
2. The certified copy of the notice of commencement must contain the name and address of the owner, the name and address of the contractor, and the location or address of the property being improved. The issuing authority shall verify that the name and address of the owner, the name of the contractor, and the location or address of the property being improved which is contained in the certified copy of the notice of commencement is consistent with the information in the building permit application.
3. The issuing authority shall provide the recording information on the certified copy of the recorded notice of commencement to any person upon request.
4. This paragraph subsection does not require the recording of a notice of commencement before prior to the issuance of a building permit. If a local government requires a separate permit or inspection for installation of temporary electrical service or other temporary utility service, land clearing, or other preliminary site work, such permits may be issued and such inspections may be conducted without providing the issuing authority with a certified copy of the a recorded notice of commencement or a notarized statement regarding a recorded notice of commencement. This subsection does not apply to a direct contract to repair or replace an existing heating or air-conditioning system in an amount less than $15,000.
(f)(e) Not require that a notice of commencement be recorded as a condition of the application for, or processing or issuance of, a building permit. However, this paragraph does not modify or waive the inspection requirements set forth in this subsection. This subsection does not apply to a direct contract to repair or replace an existing heating or air-conditioning system in an amount less than $15,000.
(3) An issuing authority under subsection (1) is not liable in any civil action for the failure to verify that a certified copy of the recorded notice of commencement, a notarized statement that the notice of commencement has been filed for recording along with a copy thereof, or the clerk's office's official records identifying information that includes the instrument number for the notice of commencement or the number and page of book where the notice of commencement is recorded, as identified by the clerk, has been filed in accordance with this section.
713.18
713.18, Florida Statutes, governs service of various documents required under Florida’s construction lien law, and is modified as follows:
713.18 Manner of serving documents notices and other instruments.
(1) Unless otherwise specifically provided by law, service of any document notices, claims of lien, affidavits, assignments, and other instruments permitted or required under this part, s. 255.05, or s. 337.18, or copies thereof when so permitted or required, unless otherwise specifically provided in this part, must be made by one of the following methods:
(a) By hand actual delivery to the person to be served; if a partnership, to one of the partners; if a corporation, to an officer or director, managing agent, or business agent; or, if a limited liability company, to a member or manager; or to an employee or agent authorized by the partnership, corporation, or limited liability company to receive service of such document.
(b) By common carrier delivery service or by registered, Global Express Guaranteed, or certified mail to the person to be served, with postage or shipping paid by the sender and with evidence of delivery, which may be in an electronic format.
(c) By posting on the site of the improvement if service as provided by paragraph (a) or paragraph (b) cannot be accomplished.
(2) Notwithstanding subsection (1), service of a notice to owner or a preliminary notice to contractor under this part, s. 255.05, or s. 337.18, or s. 713.23 is effective as of the date of mailing and the requirements for service under this section have been satisfied if all of the following requirements have been met:
(a) The notice is mailed by registered, Global Express Guaranteed, or certified mail, with postage prepaid, to the person to be served and addressed as prescribed at any of the addresses set forth in subsection (3).
(b) The notice is mailed within 40 days after the date the lienor first furnishes labor, services, or materials.; and
(c)1. The person who served the notice maintains a registered or certified mail log that shows the registered or certified mail number issued by the United States Postal Service, the name and address of the person served, and the date stamp of the United States Postal Service confirming the date of mailing; or
2. The person who served the notice maintains electronic tracking records approved or generated by the United States Postal Service containing the postal tracking number, the name and address of the person served, and verification of the date of receipt by the United States Postal Service.
(3)(a) Notwithstanding subsection (1), service of a document under an instrument pursuant to this section is effective on the date of mailing or shipping, and the requirements for service under this section have been satisfied, the instrument if the document meets both of the following requirements it:
1. It is sent to the last address shown in the notice of commencement or any amendment thereto or, in the absence of a notice of commencement, to the last address shown in the building permit application, or to the last known address of the person to be served.
2. It is returned as being "refused," "moved, not forwardable," or "unclaimed," or is otherwise not delivered or deliverable through no fault of the person serving the document item.
(b) If the address shown in the notice of commencement or any amendment thereto to the notice of commencement, or, in the absence of a notice of commencement, in the building permit application, is incomplete for purposes of mailing or delivery, the person serving the document item may complete the address and properly format it according to United States Postal Service addressing standards using information obtained from the property appraiser or another public record without affecting the validity of service under this section.
(4) A document notice served by a lienor on one owner or one partner of a partnership owning the real property is deemed served on notice to all owners and partners.
713.21
713.21, Florida Statutes, governs discharges of liens, and is modified as follows:
Clarification that liens can be released in whole or in part using the methods listed
Language added to indicate that the “satisfaction or release must include the lienor's notarized signature and set forth the official records' reference number and recording date affixed by the recording office on the subject lien.
Clarifying that the summons in an action to discharge a lien must state that cause must be shown within 20 days after receipt of the show cause summons issued.
713.22
In the section for this statute applicable to notices of contest of liens, the following language is added to require the clerk’s office to comply with 713.18, Florida Statutes, when serving a copy of the recorded notice of contest:
After the clerk records the notice with the certificate of service, the clerk shall serve, in accordance with s. 713.18, a copy of such recorded notice on the lienor and the owner or the owner's attorney.
713.23
713.23, Florida Statutes, is updated as follows:
Clarifies that notice of nonpayment must be served on contractor, with a copy to the surety, by claimants not in privity with contractor.
Updates notary certificate on notice of non-payment to allow online notarization
Further, the portion of the statute applicable to notices of contest is updated as follows to require compliance with 713.18, Florida Statutes:
The contractor or the contractor's attorney shall serve, in accordance with s. 713.18, a copy of the notice of contest to the lienor at the address shown in the notice of nonpayment or most recent amendment thereto and shall certify to such service on the face of the notice and record the notice. After the clerk records the notice with the certificate of service, the clerk shall serve, in accordance with s. 713.18, a copy of such recorded notice on the lienor and the contractor or the contractor's attorney.
713.24
When a lien is transferred to a security bond, in calculating the value of the bond, the clerk’s office is now required to use either $5,000.00 (as opposed to $1,000.00) or 25% of the value of the lien to account for attorneys’ fees in the bond. Further, the clerk’s office is now required to serve a copy of the transfer certificate and a copy of the deposit or bond supporting the transfer on the lienor.
713.25
This statute is repealed. The full text of the repealed statute is as follows:
Applicability of ch. 65-456.—This act shall take effect on July 1, 1965, but shall not apply to any act required to be done within a time period which is running on that date nor shall apply to existing projects where its operation would impair vested rights.
713.29
713.29, Florida Statutes, is amended to clarify that attorneys fees are awardable to the prevailing party in an action to enforce a lien that has been transferred to another security.
While some of the changes may seem minor, Florida’s construction statutes are interpreted strictly and contractors must take these adjustments into account in their business practices in order to protect themselves and their businesses.