If you’re looking to claim a construction bond in Florida, here’s a quick answer:
- Obtain a copy of the bond from the general contractor or the public entity.
- Submit a Notice to Contractor if you’re a lower-tier subcontractor within 45 days of starting work.
- Send a Notice of Nonpayment to the general contractor and surety.
- Enforce your bond claim in court within one year of your last service or supply delivery.
Construction bonds are crucial for securing payments in Florida’s public construction projects. Given that public lands are exempt from construction liens, these bonds ensure that contractors, subcontractors, and suppliers get paid for their work and materials. If you’re involved in a public works project in Florida, understanding how to steer the bond claim process can safeguard your financial interests.
Florida’s strict regulations make the bond claim process complex. Following the precise steps is essential to maintain your rights and secure payments promptly.
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Understanding Construction Bonds in Florida
When working on construction projects in Florida, especially public ones, understanding the different types of bonds and the relevant laws is crucial. These bonds ensure that all parties involved in a project get paid, and they protect public property from liens. Let’s break down the main types of construction bonds and the key legal framework that governs them.
Types of Bonds
Surety Bond
A surety bond is a three-party agreement involving the contractor (principal), the client (obligee), and the surety company. The surety guarantees that the contractor will fulfill their contractual obligations. If the contractor fails, the surety steps in to cover losses up to the bond’s value.
Payment Bond
A payment bond ensures that subcontractors and suppliers get paid for their work and materials. If the general contractor fails to make these payments, the surety company is responsible for covering the costs. This bond protects lower-tier subcontractors who may not have a direct contract with the general contractor.
Performance Bond
A performance bond guarantees that the contractor will complete the project according to the terms and conditions of the contract. If the contractor defaults, the surety company will either complete the project or compensate the client for any financial losses.
The Little Miller Act
The Little Miller Act (Florida Statute 255.05) is a state law that requires contractors to obtain payment and performance bonds for public construction projects exceeding $100,000. This act mirrors the federal Miller Act and aims to protect public property from liens while ensuring that subcontractors and suppliers are paid.
Key Provisions of the Little Miller Act:
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Bond Requirement: For any public construction project over $100,000, the general contractor must provide a payment and performance bond.
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Notice to Contractor: Subcontractors who are not in direct contract with the general contractor must send a Notice to Contractor within 45 days of starting work. This notice preserves their right to make a claim against the bond.
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Notice of Nonpayment: If payment issues arise, subcontractors must send a Notice of Nonpayment to the general contractor and the surety company within 90 days of their last work or material delivery.
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Enforcement: If payment is still not received, the subcontractor can file a lawsuit to enforce the bond claim. This must be done within one year from the last date of work or material delivery.
Understanding these bonds and the Little Miller Act is essential for anyone involved in Florida’s public construction projects. Following the proper procedures ensures that you can secure your payments and protect your financial interests.
Next, we’ll dive into the specific steps you need to take to claim a construction bond in Florida.
Steps to Claim a Construction Bond in Florida
When it comes to claiming a construction bond in Florida, following the right steps is crucial. This ensures you secure the payment you’re owed and stay within the legal framework. Let’s break down the process step-by-step.
Step 1: Obtain a Copy of the Payment Bond
The first step is to obtain a copy of the payment bond. This document is essential because it contains all the information needed to file a claim.
- Request from the General Contractor: Initially, you should ask the general contractor for a copy. If they don’t respond, Florida statute 255.05(1)(c) allows you to request the bond from the public entity overseeing the project.
Step 2: Send Notice to Contractor
Next, if you’re a subcontractor who isn’t in direct contract with the prime contractor, you must send a preliminary notice.
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Certified Mail: This notice should be sent via certified mail to ensure it’s received.
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45-Day Rule: You must send this notice either before you start work or within 45 days after beginning your work. Missing this deadline can invalidate your claim.
Step 3: Send Notice of Nonpayment
If you encounter payment issues, it’s time to send a Notice of Nonpayment. This notice serves as your formal claim against the bond.
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Who to Notify: Send this notice to both the prime contractor and the surety company.
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Timing: You have a specific window to act. Send the notice within 45 days after first supplying labor or materials, but no later than 90 days after your last work or material delivery. Missing these deadlines can jeopardize your claim.
Step 4: Enforce Your Claim
If you still haven’t received payment after sending the Notice of Nonpayment, the next step is to enforce your claim by filing a lawsuit.
- Statute of Limitations: You have up to one year from the last date you provided labor or materials to file a lawsuit. However, if the contractor contests your claim by filing a notice of contest, you then have only 60 days from receiving this notice to file your suit.
Following these steps carefully ensures that your claim remains valid and increases your chances of getting paid. Missing any of these steps or deadlines can result in losing your right to claim, so stay organized and proactive.
Next, we’ll cover the key deadlines and requirements you need to be aware of when claiming a construction bond in Florida.
Key Deadlines and Requirements
When you claim a construction bond in Florida, keeping track of deadlines is critical. Missing any of these can invalidate your claim. Here are the key deadlines and requirements you need to know:
45-Day Notice
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Who Needs to Send It: Subcontractors and suppliers who did not contract directly with the prime contractor.
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When to Send It: Within 45 days of first furnishing labor or materials to the project.
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Purpose: This notice, often called the Notice to Contractor, informs the prime contractor of your involvement in the project. It establishes your right to claim against the bond later.
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How to Send It: Use certified mail to ensure it’s received and you have proof of delivery.
90-Day Notice
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Who Needs to Send It: Any party (including those who did contract directly with the prime contractor) who has not been paid.
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When to Send It: Within 90 days of last furnishing labor or materials to the project.
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Purpose: This is the Notice of Nonpayment. It formally notifies the prime contractor and the surety company of the unpaid amount and your intention to claim against the bond.
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Important Tip: It’s good practice to send this notice even if you contracted directly with the prime contractor, to avoid any potential disputes.
1-Year Lawsuit Deadline
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Who Needs to File: Any claimant who has not been paid after sending the Notice of Nonpayment.
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When to File: Within 1 year from the last date you provided labor or materials to the project.
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Exception: If the prime contractor files a Notice of Contest of Claim Against Payment Bond, you only have 60 days from the receipt of this notice to file your lawsuit.
Little Miller Act
Florida’s Little Miller Act governs payment bond requirements and claims on public projects. Here are the key points:
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Covered Projects: Applies to all public projects (state, county, local) where the original contract price is $200,000 or more.
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Bond Requirement: Public projects exceeding $25,000 require a payment bond. Always request a copy from the general contractor or the public entity overseeing the project.
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Notice Requirements: Follow the same 45-day and 90-day notice rules mentioned above.
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Enforcement: You have up to one year to file a lawsuit to enforce your claim, unless a Notice of Contest is filed, which shortens the deadline to 60 days.
Public Projects
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Smaller Projects: For public projects under $200,000, there may still be a payment bond. The terms of this bond will govern the notice and claim requirements.
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Non-Construction Services: For construction-management or design-build contracts, if the payment bond does not specifically include non-construction services, parties performing these services are not covered by the bond.
By adhering to these deadlines and requirements, you can protect your right to payment and successfully steer the process of claiming a construction bond in Florida.
Next, we’ll answer some frequently asked questions about claiming a construction bond in Florida.
Frequently Asked Questions about Claiming a Construction Bond in Florida
How do I bond off a construction lien in Florida?
To bond off a construction lien in Florida, you can either deposit cash or obtain a surety bond. Here’s how:
- Cash Deposit: You can make a cash deposit with the clerk’s office. This deposit must be equal to the amount of the lien, plus any interest and court costs.
- Surety Bond: Alternatively, you can obtain a surety bond from a licensed surety company. The bond must be 125% of the lien amount to cover any additional costs or interests that may accrue.
The cash deposit or surety bond will replace the lien, allowing you to clear the title of the property and continue with your project without legal interruptions.
Do Florida contractors need to be bonded?
Yes, Florida contractors often need to be bonded to meet licensing requirements and protect against potential losses. Here are some key points:
- Credit Score: Your credit score can impact the cost and approval of your bond. A higher credit score usually means a lower bond premium.
- Construction Contractor Bond: This bond ensures that contractors comply with state laws and regulations.
- Licensing: Many local governments in Florida require contractors to post a bond as part of the licensing process. This includes general contractors, electricians, plumbers, and other specialized trades.
How much is a construction bond in Florida?
The cost of a construction bond in Florida varies based on several factors:
- $5,000 Surety Bond: This is a common bond amount for smaller projects or specific contractor licenses. The cost for this bond typically starts around $100.
- City-Specific Bonds: Some cities have their own bonding requirements. For example, a contractor bond in Polk County or Lake Polk County usually costs about $150 annually.
- Bond Type: The type of bond (e.g., bid bond, performance bond, payment bond) also affects the cost. Surety bonds generally cost between 1% and 15% of the bond amount. For example, a $50,000 bond might cost between $500 and $7,500 annually.
Always check the specific requirements and costs for your project and location to ensure compliance and avoid unnecessary expenses.
By understanding these FAQs, you can better steer the process of claiming a construction bond in Florida. Next, we’ll cover some best practices to help you file your bond claim successfully.
Best Practices for Filing a Bond Claim
Filing a bond claim in Florida can be complex, but following best practices can make the process smoother and more effective. Here’s how to maximize your chance of success:
Documentation
Keep Detailed Records
Document everything related to the project. This includes:
- Invoices
- Contracts
- Change Orders
- Proof of Delivery/Services
Detailed records will strengthen your claim and provide clear evidence if disputes arise.
Communication
Communicate Clearly and Early
Effective communication can prevent many issues.
- Send Written Demands for Payment: Always communicate your demands in writing and keep copies. This shows you are serious and professional.
- Certified Mail: Use certified mail to send notices. This provides proof of compliance with legal requirements.
Mediation
Consider Alternative Dispute Resolution
Before jumping into legal action, explore mediation or negotiation.
- Mediation: This can be faster and less costly than court. It allows both parties to discuss their issues openly.
- Negotiation: Sometimes, a simple conversation can resolve payment disputes.
Legal Counsel
Seek Expert Legal Advice
Navigating bond claims can be tricky. A construction lawyer with expertise in Florida bond claims can guide you through complexities.
- Guidance: A lawyer can help you understand your rights and obligations.
- Maximize Success: Legal counsel increases your chances of a favorable outcome.
Deadlines
Missing deadlines can jeopardize your bond claim. Key deadlines include:
- 45-Day Notice: Send the Notice to Contractor within 45 days of first furnishing labor or materials.
- 90-Day Notice: Send the Notice of Nonpayment within 90 days after last furnishing labor or materials.
- 1-Year Lawsuit: File a lawsuit to enforce your claim within one year of last furnishing labor or materials.
Staying on top of these deadlines is crucial for preserving your rights.
By following these best practices, you can protect your rights and increase your chances of successfully filing a bond claim in Florida.
Conclusion
Claiming a construction bond in Florida can be a complex process, but understanding the steps and following best practices can significantly increase your chances of success. Remember to keep detailed documentation, communicate clearly and early, consider mediation, seek expert legal advice, and adhere strictly to deadlines.
At Surety Bonds Co, we specialize in providing surety bonds in Florida, Georgia, Louisiana, Mississippi, South Carolina, and Tennessee. Our unique selling points include instant online quotes, immediate approval, and the ability to download and print bonds within minutes. We are here to assist you every step of the way.
If you need help with your bond claim or have any questions about construction bonds, don’t hesitate to reach out to us. Our team of experts is ready to provide the guidance and support you need.
For more information, visit our Florida Contractor License Bonds page or contact us directly. We look forward to helping you steer the complexities of construction bonds in Florida.
Surety Bonds Co
Phone: (123) 456-7890
Email: [email protected]
Website: suretybonds.co
By following the guidelines outlined in this article and leveraging the expertise of Surety Bonds Co, you can confidently steer the process of claiming a construction bond in Florida.
