Most of us know the basic requirements involved in getting paid on a payment bond:
1. Do a Preliminary Notice within 45
days of your first day on the job;
2. Do a Notice of Performance and
Nonpayment within 90 days of
your last day on the job; and,
3. Sue on the bond within one year of
your last day on the job.
But what happens when you don’t do one, or both, of the notices timely or at all? There are several exceptions to these requirements that provide security to a claimant. If you are working directly for the Contractor who posted the payment bond on a private job, you don’t need to do a Preliminary Notice (aka a Notice to Owner) per F.S. 713.23. As such, you are OK if you do your Notice to Owner late in this situation since one is not actually required. The same holds true on Government jobs.
Additionally, under F.S. 255.05 (government jobs) if you are working for the Contractor who posted the payment bond you don’t need to do a Notice of Performance and Nonpayment. As such, if you do it late you are OK anyways. So on a government job if you are working for the
Contractor who pulled the bond, all you need to do is sue within one year of your last day on the job.
On a private job, with a 713.23 payment bond, if all you are owed is retainage then you don’t need to do a Notice of Performance and Nonpayment. As such, if you do it late you are OK again. In fact, if the retainage is substantial it might be a good strategy to not include unpaid change orders in your claim. Once you add the change order work you lose the safe harbor of not having to do a timely Notice of Perforance and Nonpayment. You can still sue for the change orders in a breach of contract count but you just can’t include your change orders in your payment bond claim. Lastly, there are some exceptions in the law on government jobs where you are able to sue for retainage after your one year on the job expires. This deals with when the Contractor has not been paid retainage yet because it is not due per the prime contract during your one year period. Lastly, one has to be careful about counting your 90 days from your last day. Often punch list work is not included in the 90 days. This is especially true when the punch list entails correcting work already completed. To know if your punch list work is included in your 90 days you should consult with your attorney because every punch list and every case is different.
David S. Tupler, Esq. is a construction attorney with over 29 years experience in collecting past due debts, pursuing lien and bond claims, defending defect claims, filing bid protests and other related services. David can be reached at [email protected].
SAFE HARBOR WITH PAYMENT BONDS
By David S. Tupler, Esq.