13.3 Payment Bonds, Waivers & Claims of Lien

13.3 Payment Bonds, Waivers & Claims of Lien

Sections 13.1 and 13.2 built the private-property lien: who may claim, who serves an NTO, and when the claim of lien must be recorded and served. This section is the off-ramp. Public jobs have no lien on the land. Private jobs sometimes replace the land with a payment bond. Every job uses waiver and release forms if anyone wants to get paid without leaving a cloud on title. The exam will hand you a public-school rooftop, a private clinic with a 713.23 bond, or an owner who mailed a Notice of Contest of Lien, and ask which clock still runs.

Do not lien public property — F.S. 255.05

F.S. 713.01(24) and (27) already excluded governmental entities and school-board property from “owner” and “real property.” F.S. 255.05 is the substitute. A person entering a formal contract with the state or any county, city, or political subdivision, or other public authority, for construction of a public building, prosecution of a public work, or repairs upon a public building or public work shall, before commencing (or recommencing after default or abandonment), execute and record in the county where the improvement is located a payment and performance bond with a surety authorized in this state. Before commencing, the contractor shall provide the public entity a certified copy of the recorded bond; the public entity may not make a payment to the contractor until that copy is provided. The bond is conditioned on performance in the time and manner prescribed and on promptly making payments to all persons defined in F.S. 713.01 who furnish labor, services, or materials. A claimant has a cause of action against the contractor and surety for the amount due, including unpaid finance charges; the action may not involve the public authority in any expense.

Bond amount equals the contract price, except that for a contract in excess of $250 million, if a bond in that amount is not reasonably available, the public owner sets the largest amount reasonably available, but not less than $250 million. When the work is done for the state and the contract is $100,000 or less, no payment and performance bond is required. A county, city, political subdivision, or public authority may exempt a contract of $200,000 or less. For state work between $100,000 and $200,000, the Secretary of Management Services may delegate authority to exempt. Those dollar figures are public-bond thresholds, not Chapter 713 lien exemptions. The Chapter 713 small-job exemption remains the $2,500 direct-contract figure in 713.02(5).

Public-school RTU job. Three 20-ton rooftops on a county high school are public work. Even though each unit is within Class B's 25-ton cap, the school board's real property cannot be liened. The Class A or Class B HVAC contractor who holds the direct public contract, and every sub and supplier under that contractor, looks to the 255.05 bond (unless a statutory exemption means there is no bond — in which case 255.05(1)(f) retainage procedures for contracts of $200,000 or less may be the only public-side protection). Recording a 713.08 claim of lien against the school is the wrong instrument. Do not tell the exam you “lien the portable classrooms because they could be moved.” School-board property is excluded.

A claimant except a laborer who is not in privity with the contractor shall, before commencing or not later than 45 days after commencing to furnish, serve the contractor with written notice that the claimant intends to look to the bond. If the bond is not recorded before commencement (or recommencement), that notice may be served up to 45 days after the claimant is served with a copy of the bond. A claimant not in privity who has not been paid shall serve a written notice of nonpayment under oath on the contractor and a copy on the surety. The notice of nonpayment may not be served earlier than 45 days after the first furnishing and may not be served later than 90 days after the final furnishing (or, for rental equipment, later than 90 days after the equipment was last on site and available for use). An action may not be instituted against the contractor or surety unless the notice to the contractor and the notice of nonpayment have been served, if required. Time is measured from the last day of furnishing, not from a certificate of occupancy or substantial completion. A fraudulent notice of nonpayment (willful exaggeration, work not performed, or willful gross negligence amounting to exaggeration) forfeits rights under the bond; a minor mistake or a good-faith amount dispute does not.

An action, except for retainage, must be instituted against the contractor or surety within 1 year after performance of the labor or completion of delivery of the materials (255.05(10)). Retainage has additional gates (public entity paid the retainage out, 70 days after the contractor's final payment request, 160 days after substantial completion or beneficial occupancy, or a 10-day unanswered information request). A contractor may shorten a bond claim by recording a Notice of Contest of Claim Against Payment Bond, after which the claimant has 60 days after service to sue or the claim is extinguished automatically. A claimant may not waive in advance the right to bring an action on the bond against the surety. Statutory progress-payment and final-payment waivers of the right to claim against the payment bond exist; a person may not require a waiver different from those forms (255.05(2)(b)–(d)).

Private payment bonds — F.S. 713.23

On private work the owner and contractor may agree that the contractor shall furnish a payment bond as provided in 713.23. Upon receipt of the bond the owner is exempt from the other provisions of Part I as to that direct contract, but this does not exempt the owner from the lien of the contractor who furnishes the bond (713.02(6)). The bond must be in at least the amount of the original contract price, executed by a surety authorized in this state, and attached to the Notice of Commencement when the NOC is recorded. The bond secures every lien under the direct contract accruing after execution except that of the contractor. Every later claim of lien except the contractor's is transferred to the bond with the same effect as a transfer under 713.24.

A lienor not in privity with the contractor, except a laborer, shall serve the contractor with notice in writing, before beginning or within 45 days after beginning, that the lienor will look to the contractor's bond. A timely 713.06 Notice to Owner served on the contractor satisfies that paragraph. A lienor who has not received payment must, as a condition precedent, serve a sworn notice of nonpayment on the contractor and a copy on the surety not later than 90 days after final furnishing. An action must be instituted against the contractor or surety within 1 year after performance of the labor or completion of delivery of the materials, measured from the last day of furnishing. The contractor may record a Notice of Contest of Claim Against Payment Bond and collapse the suit window to 60 days. A 713.20 waiver and release of lien given by a lienor is a waiver, in a like amount, of the right to claim against a 713.23 bond (713.23(5)).

Waivers and releases — F.S. 713.20

Acceptance of an unsecured note does not waive the lien unless expressly so agreed in writing, and it does not affect the NTO or claim-of-lien periods. A right to claim a lien may not be waived in advance. A lien right may be waived only to the extent of labor, services, or materials furnished. Any advance waiver is unenforceable. A person may at any time waive, release, or satisfy any part of a lien as to amounts through a certain date (subject to stated exceptions) or as to any part of the real property.

When a lienor is required to execute a waiver or release in exchange for or to induce a progress payment, the form is Waiver and Release of Lien Upon Progress Payment — it waives through a stated date to a named customer on a named owner's job, and it does not cover retention or labor, services, or materials furnished after the date specified. The final payment form, Waiver and Release of Lien Upon Final Payment, waives for labor, services, or materials furnished to that customer on that job. A person may not require a lienor to furnish a waiver or release different from those forms. A waiver that is not substantially similar is still enforceable in accordance with its terms — the ban is on requiring a non-statutory form, not on a lienor voluntarily signing something broader. A lienor who executes a waiver in exchange for a check may condition the waiver on payment of the check; if there is no payment bond protecting the owner, the owner may withhold from the contractor the amount of any such unpaid check until the condition is satisfied.

HVAC application: never sign a bid-form “I waive all lien rights on this project” as a condition of being awarded the 20-ton changeout. That advance waiver is void. Do sign the statutory progress-payment waiver through March 31 when you actually received the March draw, and keep retainage and April work off that paper. On a public school, use the 255.05 bond-waiver twins, not a 713.08 claim of lien.

Perfecting, suing, and shortening the lien

Every lienor, including laborers and persons in privity, perfects by recording the claim of lien described in 713.08. The statutory form includes the warning that unless the owner shortens the time, the lien may remain valid for one year from the date of recording and expires unless legal proceedings have been commenced to foreclose or discharge it.

F.S. 713.22(1): a lien does not continue longer than 1 year after the claim of lien has been recorded, or 1 year after recording of an amended claim that shows a later date of final furnishing, unless within that time an action to enforce is commenced in a court of competent jurisdiction. A lien continued beyond 1 year by commencing an action is not enforceable against creditors or subsequent purchasers for value without notice unless a notice of lis pendens is recorded.

F.S. 713.22(2): an owner or the owner's attorney may record a Notice of Contest of Lien. The lien of any lienor served who fails to institute suit within 60 days after service is extinguished automatically. The clerk serves the notice under 713.18.

F.S. 713.21(4): upon filing a complaint by any interested party, the clerk issues a summons to the lienor to show cause within 20 days after service why the lien should not be enforced by action or vacated and canceled. If the lienor fails to show cause or to commence the action before the return date, the court shall order cancellation of the lien. Other 713.21 discharge methods include a satisfaction entered on the margin of the record, a recorded satisfaction or release with the official-records reference, failure to sue in time, and recording a judgment that finally determines the action.

F.S. 713.06(3)(d): when final payment under a direct contract becomes due, the contractor gives the owner a contractor's final payment affidavit stating that all lienors under the direct contract who timely served an NTO have been paid in full, or listing each who has not and the amount due. The owner shall retain the final payment until that affidavit is furnished. The contractor has no lien or right of action against the owner while in default for not giving the affidavit. The contractor shall execute and deliver the affidavit at least 5 days before instituting an action as a prerequisite to any action to enforce the contractor's lien, even if final payment has not become due because the contract was terminated for a reason other than completion, and regardless of whether the contractor has any lienors working under him or her. Negligent inclusion or omission that has not prejudiced the owner is not a default that defeats an otherwise valid lien. Laborers and materialmen in privity do not give this affidavit; the contractor does.

CILB overlay: F.S. 489.129 treats valid liens left on the owner's property more than 75 days after the contractor was paid as financial mismanagement. Paying the HVAC contractor and then ignoring a supplier's recorded claim is how a qualifier buys both a foreclosure and a board complaint.

Florida HVAC scenario

Gulf Breeze Mechanical, Class A, is low bidder to replace three 20-ton rooftop units on a public high school (each unit within Class B's 25-ton cap, but the public-property rule does not care about class). There is a recorded 255.05 bond. Elena does not record a 713.08 claim of lien against the school. Panhandle Supply, not in privity with Elena, serves a notice to contractor within 45 days of first delivery of the special-order RTUs and, if unpaid, a sworn notice of nonpayment no earlier than 45 days after first furnishing and no later than 90 days after final furnishing, then sues the surety within 1 year. On a private clinic across the street with a 713.23 bond attached to the NOC, Elena still has her contractor's lien on the clinic and must deliver the final payment affidavit at least 5 days before suit; Panhandle's claim is against the bond, not the land. If the clinic owner records a Notice of Contest of Lien, Elena has 60 days to file, not a year. If an interested party serves a 713.21(4) summons, she has 20 days. Signing an advance waiver in the school bid package was void; signing the statutory final-payment bond waiver after the check clears is how the file actually closes.