Any person or business performing construction work on a state, county or city project in Florida (“public project”) is typically concerned about payment for its work. Since those persons or businesses do not have construction lien rights on the public project, they must know their options to ensure payment. On many public projects, there is a payment bond and a performance bond that back the project. This post focuses on the payment bond aspect of a public project and Section 255.05 of the Florida Statutes.
Florida law prescribes the form of a payment bond and the notice requirements for perfecting a claim on that bond. Bond claimants must be vigilant in providing the requisite notice to perfect a bond claim, as well as knowing the deadline for filing suit on that bond. Owners and contractors must know and adhere to the bonding requirements to ensure the payment bond accomplishes its intended purpose.
Notice to Contractor and Notice of Non-Payment
Section 255.05 of the Florida Statutes, also known as Florida’s Little Miller Act, provides that a party, who does not have a contract with the general contractor on a public project, must serve two notices to perfect a claim on a payment bond. This first notice (known as a notice to contractor) must be served within 45 days after commencing to furnish labor, services, or materials to the project. That notice should be served on the general contractor and state that the bond claimant intends to look to the payment bond for protection. A bond claimant who has a contract with the general contractor need not serve the notice to the contractor. Thereafter, the bond claimant, who does not have a contract with the general contractor, must serve a written notice of non-payment within 90 days of final furnishing of labor, services, or materials in connection with the public project. That written notice must be served on the general contractor and surety.
While there are some nuanced exceptions to the notice requirements referenced above, Florida law is replete with cases in which parties failed to provide the required notices and, thus, had no payment bond rights. Therefore, it is important for a party to read and understand the bond and timely serve the required statutory notices to perfect a payment bond claim on a public project.
Payment Bond Requirements Under Florida Law
Section 255.05 of the Florida Statutes also contains specific requirements for payment bonds. If there is a bond required for the public construction project, it must be recorded in the public records where the project is located. The payment bond must also include the following:
- the name, principal business address and phone number of the contractor, the surety, the owner of the property being improved and, if different from the owner, the contracting public entity;
- the contract number assigned by the contracting public entity;
- the bond number assigned by the surety; and
- a description of the project sufficient to identify it, such as a legal description of the street address of the property being improved, and a general description of the improvement.
Contractors and others performing work on a public project must be aware that there are exceptions to the bond requirements for these projects. For example, when the contract for the public project is for $100,000 or less, there is no payment or performance bond required for that project. If the contract for the public project is for $200,000 or less, that project may also be exempt from the payment and performance bond requirements of Florida’s Little Miller Act. For these types of public projects, with no payment bond rights and no lien rights, one must be prudent in deciding whether to take on the work.
Florida’s Little Miller Act is complex and requires careful consideration by all involved in a public project in Florida.