General contractors on public construction projects are required to furnish a payment bond to the contracting publicly entity. Because filing a mechanics lien is a remedy available only to those working for private projects, a general contractor’s payment bond ensures that lower-tier construction parties working on public projects have a way to recover payment in case of delays and disputes.
In Florida, subcontractors and material suppliers may serve a Notice of Nonpayment to get paid for the work that they have done. This guide explains the procedure for serving this notice, including the best practices that can help you recover your payment successfully.
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- What is a Florida Notice of Nonpayment?
- Who can serve a Florida Notice of Nonpayment?
- Preliminary notice requirements before service of a Notice of Nonpayment
- When do you serve a Florida Notice of Nonpayment?
- Consequences of not serving a Notice of Nonpayment in Florida
- How to serve a Florida Notice of Nonpayment
- Best practices when serving a Florida Notice of Nonpayment
What is a Florida Notice of Nonpayment?
The Florida Notice of Nonpayment is the statutory document that you must serve on the general contractor and the surety when you are making a payment bond claim. It is similar to the mechanics lien, but specifically served by construction participants working on public projects.
Just like the Florida mechanics lien, the Notice of Nonpayment allows a lower-tier construction party to recover payment if they find themselves in the middle of a payment delay or dispute. Serving the Notice of Nonpayment also has specific rules and requirements that a potential claimant must follow, so make sure that you are diligent in adhering to these rules.
Who can serve a Florida Notice of Nonpayment?
Subcontractors and material suppliers working on a publicly funded project in Florida have the right to serve a Notice of Nonpayment.
Parties who have a direct contract with the general contractor are not required to serve a preliminary notice to protect their right to serve a payment bond claim. However, those who do not have a direct contractual relationship with the general contractor must serve a Florida preliminary notice in relation to payment bond protection.
Preliminary notice requirements before service of a Notice of Nonpayment
As mentioned above, parties who do not have a direct contract with the general contractor are required to serve a preliminary notice to preserve their right to make a payment bond claim. There is no prescribed template for this preliminary notice; the only requirement is that this written notice must explicitly state that you intend to look to the bond for protection.
Generally, the preliminary notice will also include the following information:
- Your name and address
- The name and address of the party who hired you
- A brief description of the services that you will be providing to the project
- A description of the project location that is sufficient for identification
- A statement saying that you are looking to use the bond for payment protection
If required to serve a Florida preliminary notice for bond protection, you must serve this notice within 45 days of your first day of work. The preliminary notice must be served on the general contractor. Personal delivery or certified mail with return receipt requested are both valid methods of serving the Florida preliminary notice for bond protection.
When do you serve a Florida Notice of Nonpayment?
The Florida Notice of Nonpayment is served when a payment dispute has come up and you are looking to recover the money that you have rightfully earned. Keep in mind that this is different from the Florida preliminary notice, which, if required, is served within the first 45 days of working on a project.
The deadline for serving the Notice of Nonpayment is within 90 days of your last day of work. The last day of work is the day when you last furnished labor, materials, or other services to the project.
Remember that this deadline may not be extended. If you do not serve a Notice of Nonpayment within the 90-day time frame, you forfeit your right to seek payment protection through the payment bond.
Consequences of not serving a Notice of Nonpayment in Florida
If you fail to serve a Notice of Nonpayment, you are essentially revoking your best option to recover payment from a delinquent client. Note that a Florida mechanics lien is applicable only to private projects. When working on a public project, the Notice of Nonpayment is your best payment protection tool, so make sure that you serve a valid Notice of Nonpayment on time.
How to serve a Florida Notice of Nonpayment
1. Prepare the Notice of Nonpayment form
Florida has a specific statutory form that you must use when preparing your Notice of Nonpayment. To complete the form, you must have the following details ready:
- The name and address of the general contractor
- The name and address of the surety
- A description of the services that you provided
- A description of the property location that is sufficient for identification
- The amount of the original contract agreement
- The amount that you have received to date
- The amount that you are still expecting to receive
Florida statutory laws require you to use the following Notice of Nonpayment form:
Make sure that you stick with the prescribed form and to fill it with accurate information. Do not try to pad the claimed amount in an attempt to recover more money. You may be subjected to penalties if proven that you made a fraudulent claim on your Florida Notice of Nonpayment.
2. Have your Notice of Nonpayment form notarized
The Florida Notice of Nonpayment statutory form has a block for notary information, which means that you have to sign your Notice of Nonpayment in the presence of a notary officer. This is a recent update to Florida state rules, so not all construction participants may be aware of this requirement.
It is best practice to use a valid Florida Notice of Nonpayment form as this form will remind you that you need to have your payment bond claim notarized before you serve it on the appropriate parties.
3. Serve the Notice of Nonpayment form on the general contractor and the surety
Once your Florida Notice of Nonpayment form has been completed and notarized, you have to serve it on both the general contractor and the surety. You may also serve it on the contracting government entity, although doing so is not a requirement.
There are multiple valid methods of service in Florida. They include personal delivery and certified mail with return receipt requested. If serving in person, make sure to get the recipient to sign an acknowledgement of receipt form.
Other valid service methods may be found under Florida Statutes Section 713.18.
Once you have served the Notice of Nonpayment on both the general contractor and the surety, you may receive more instructions from the surety on how to complete your payment bond claim. It is best practice to keep following up with the surety to know the status of your claim.
Different sureties have different rules, so be ready to comply with some additional requirements like confirming all the information that you wrote on your Florida Notice of Nonpayment form. If you have a valid payment claim, the surety will most likely cover the payment and ensure that you get fully paid for the services that you have rendered.
4. Initiate a lawsuit if you do not receive payment
It is possible for the surety to not recognize your claim and fail to settle the payment dispute. If this happens, you have to initiate a lawsuit within 1 year of your last day of work. Initiating a lawsuit is your last legal course if the payment bond claim does not work to get you paid.
Keep in mind that the deadline for initiating a lawsuit may be shortened if the general contractor officially contests your Notice of Nonpayment. A general contractor may serve you a Notice of Contest of Claim Against Payment Bond, which means that they are officially denying your payment claim and are willing to take the issue to court.
If a general contractor serves you a Florida Notice of Contest of Claim, you have 60 days within the date of the notice to initiate a lawsuit and prove the validity of your payment bond claim in court.
Best practices when serving a Florida Notice of Nonpayment
1. Serve the Florida preliminary notice early
Remember that all parties who do NOT have a direct contract with the general contractor must serve a preliminary notice to protect their bond rights. This preliminary notice must be served within 45 days of your first day of work, but it is best practice to serve this document right on the very first day of furnishing labor or materials to the project.
By consistently serving your preliminary notices on the first day of work, you do not risk failing to serve a preliminary notice altogether.
2. Verify the accuracy of the information on your Florida Notice of Nonpayment form
While minor mistakes will not necessarily invalidate your bond claim, it is still a good business practice to always verify the information that you include in your Florida Notice of Nonpayment form. Make sure that the names and addresses are spelled correctly, and that the amounts listed are reasonable and accurate.
3. Do not include attorney’s fees and other legal costs in your bond claim amount
It may be tempting to include attorney’s fees and other miscellaneous costs in your Florida payment bond claim amount. However, the amount that you claim in your Notice of Nonpayment must be strictly related to the services that you furnished to the project. Make sure that you stick to the amounts that specifically correspond to the services that you have provided. Otherwise, your claim may be considered fraudulent and consequently rejected.