(1)(a) The payment bond required to exempt an owner under this part shall be furnished by the contractor in at least the amount of the original contract price before commencing the construction of the improvement under the direct contract, and a copy of the bond shall be attached to the notice of commencement when the notice of commencement is recorded. The bond shall be executed as surety by a surety insurer authorized to do business in this state and shall be conditioned that the contractor shall promptly make payments for labor, services, and material to all lienors under the contractor’s direct contract. Any form of bond given by a contractor conditioned to pay for labor, services, and material used to improve real property shall be deemed to include the condition of this subsection.
(b) The owner, contractor, or surety shall furnish a true copy of the bond at the cost of reproduction to any lienor demanding it. Any person who fails or refuses to furnish the copy without justifiable cause shall be liable to the lienor demanding the copy for any damages caused by the refusal or failure.
(c) Either before beginning or within 45 days after beginning to furnish labor, materials, or supplies, a lienor who is not in privity with the contractor, except a laborer, shall serve the contractor with notice in writing that the lienor will look to the contractor’s bond for protection on the work. If a notice of commencement is not recorded, or a reference to the bond is not given in the notice of commencement, and in either case if the lienor not in privity with the contractor is not otherwise notified in writing of the existence of the bond, the lienor not in privity with the contractor shall have 45 days from the date the lienor is notified of the existence of the bond within which to serve the notice. The notice may be in substantially the following form:
NOTICE TO CONTRACTOR
To (name of contractor)
The undersigned notifies you that he or she has furnished or is furnishing (services or materials) for the improvement of the real property identified as (property description) owned by (owner’s name and address) under an order given by ____ and that the undersigned will look to the contractor’s bond for protection on the work.
(Lienor’s signature and address)
(d) In addition, a lienor is required, as a condition precedent to recovery under the bond, to serve a written notice of nonpayment to the contractor and the surety not later than 90 days after the final furnishing of labor, services, or materials by the lienor. A written notice satisfies this condition precedent with respect to the payment described in the notice of nonpayment, including unpaid finance charges due under the lienor’s contract, and with respect to any other payments which become due to the lienor after the date of the notice of nonpayment. The time period for serving a written notice of nonpayment shall be measured from the last day of furnishing labor, services, or materials by the lienor and shall not be measured by other standards, such as the issuance of a certificate of occupancy or the issuance of a certificate of substantial completion. The failure of a lienor to receive retainage sums not in excess of 10 percent of the value of labor, services, or materials furnished by the lienor is not considered a nonpayment requiring the service of the notice provided under this paragraph. The notice under this paragraph may be in substantially the following form:
NOTICE OF NONPAYMENT
To (name of contractor and address)
(name of surety and address)
The undersigned notifies you that he or she has furnished (describe labor, services, or materials) for the improvement of the real property identified as (property description) . The amount now due and unpaid is $____.
(signature and address of lienor)
(e) No action for the labor or materials or supplies may be instituted or prosecuted against the contractor or surety unless both notices have been given. No action shall be instituted or prosecuted against the contractor or against the surety on the bond under this section after 1 year from the performance of the labor or completion of delivery of the materials and supplies. The time period for bringing an action against the contractor or surety on the bond shall be measured from the last day of furnishing labor, services, or materials by the lienor and shall not be measured by other standards, such as the issuance of a certificate of occupancy or the issuance of a certificate of substantial completion. A contractor or the contractor’s agent or attorney may elect to shorten the prescribed time within which an action to enforce any claim against a payment bond provided under this section or s. 713.245 may be commenced at any time after a notice of nonpayment, if required, has been served for the claim by recording in the clerk’s office a notice in substantially the following form:
NOTICE OF CONTEST OF CLAIM AGAINST PAYMENT BOND
To: (Name and address of lienor)
You are notified that the undersigned contests your notice of nonpayment, dated ____, ____, and served on the undersigned on ____, ____, and that the time within which you may file suit to enforce your claim is limited to 60 days from the date of service of this notice.
DATED on ____, ____.
Signed: (Contractor or Attorney)
The claim of any lienor upon whom the notice is served and who fails to institute a suit to enforce his or her claim against the payment bond within 60 days after service of the notice shall be extinguished automatically. The clerk shall mail 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. Service is complete upon mailing.
(f) Any lienor has a direct right of action on the bond against the surety. A bond must not contain any provisions restricting the classes of persons protected thereby or the venue of any proceeding. The surety is not entitled to the defense of pro tanto discharge as against any lienor because of changes or modifications in the contract to which the surety is not a party; but the liability of the surety may not be increased beyond the penal sum of the bond. A lienor may not waive in advance his or her right to bring an action under the bond against the surety.
(2) The bond shall secure every lien under the direct contract accruing subsequent to its execution and delivery, except that of the contractor. Every claim of lien, except that of the contractor, filed subsequent to execution and delivery of the bond shall be transferred to it with the same effect as liens transferred under s. 713.24. Record notice of the transfer shall be effected by the contractor, or any person having an interest in the property against which the claim of lien has been asserted, by recording in the clerk’s office a notice in substantially the following form:
NOTICE OF BOND
To (Name and Address of Lienor)
You are notified that the claim of lien filed by you on ____, ____, and recorded in Official Records Book ____ at page ____ of the public records of ____ County, Florida, is secured by a bond, a copy being attached.
Signed: (Name of person recording notice)
The notice shall be verified. The clerk shall mail a copy of the notice to the lienor at the address shown in the claim of lien, or the most recent amendment to it; shall certify to the service on the face of the notice; and shall record the notice. The clerk shall receive the same fee as prescribed in s. 713.24(1) for certifying to a transfer of lien.
(3) A payment bond in substantially the following form shall be sufficient:
BY THIS BOND We, ____, as Principal, and ____, a corporation, as Surety, are bound to ____, herein called Owner, in the sum of $____ for the payment of which we bind ourselves, our heirs, personal representatives, successors, and assigns, jointly and severally.
THE CONDITION OF THIS BOND is that if Principal:
1. Promptly makes payments to all lienors supplying labor, material, and supplies used directly or indirectly by Principal in the prosecution of the work provided in the contract dated ____, ____, between Principal and Owner for construction of ____, the contract being made a part of this bond by reference; and
2. Pays Owner all loss, damage, expenses, costs, and attorney’s fees, including appellate proceedings, that Owner sustains because of default by Principal under paragraph 1. of this bond;
then this bond is void; otherwise, it remains in full force.
Any changes in or under the contract documents and compliance or noncompliance with formalities connected with the contract or with the changes do not affect Surety’s obligation under this bond.
DATED on ____, ____.
As Attorney in Fact
(4) The provisions of s. 713.24(3) shall apply to bonds under this section.
(5) A waiver and release of lien pursuant to s. 713.20 given by a lienor shall constitute a waiver and release in a like amount of the lienor’s right to make a claim against a payment bond under this section.
History.—s. 1, ch. 63-135; s. 14, ch. 65-456; s. 35, ch. 67-254; s. 10, ch. 77-353; s. 8, ch. 80-97; s. 5, ch. 87-74; s. 6, ch. 88-397; s. 12, ch. 90-109; s. 812, ch. 97-102; s. 6, ch. 98-135; s. 32, ch. 99-6; s. 8, ch. 99-386; s. 8, ch. 2001-211; s. 10, ch. 2005-227.