[CLC-Discussion] Paid If Paid Incorporated By Reference From Subcontract To 713.23 Statutory Payment Bond

[Charles B. Hernicz, Esq]

I've seen this frequently as well and don't know of any changes to the
law-it appears to be an attempt by GCs to confuse the issue for the courts.
I always try to get it out via an addendum or modification to the
subcontract, but most of the big GCs will not agree to modify this language.

 

Chuck

 

Charles B. Hernicz, Esq.
Board Certified in Construction Law by The Florida Bar           
Hernicz Legal Services, P.L.
15854 Bent Creek Road 
Wellington, FL 33414 
Telephone: (561) 753-7511 
Facsimile: (561) 753-7082 
Chernicz at HerniczLegal.com

 

 

 

From: clc-discussion-bounces at lists.flabarrpptl.org
[mailto:clc-discussion-bounces at lists.flabarrpptl.org] On Behalf Of Robert
Worman
Sent: Monday, July 06, 2015 5:56 PM
To: clc-discussion at lists.flabarrpptl.org
Subject: [CLC-Discussion] Paid If Paid Incorporated By Reference From
Subcontract To 713.23 Statutory Payment Bond

 

I have recently reviewed several large project subcontracts for clients
where the contractor is incorporating by reference in the subcontract the
risk shifting "paid if paid" condition precedent to also be a condition
precedent in the contractor's Payment Bond.

 

Am I missing a case out there that allows a 713.23 bond to enjoy this
condition precedent and still allow for the property's exemption from
construction liens?  Isn't that the whole reason behind 713.245 payment
bonds? 

 

Am I wrong to think that if the contractor tries to make its 713.23 bond
conditioned upon payment by the owner, and it is not otherwise designated as
a Conditional Payment Bond with 713.245 referenced in the bond, then either
(a) the condition precedent would be void, such that the property would be
exempt from construction liens, or (b) the bond would be a common law bond,
no lien exemption would be enforced, and the owner's interest in the
property would be subject to construction liens?

 

Anyone's thoughts on this would be appreciated and should be sent directly
to me unless you feel it is an issue worthy of all hearing your comments.

 

Regards,

 

Robert B. Worman

Worman & Sheffler, P.A.

2707 West Fairbanks Avenue

Suite 200

Winter Park, FL 32789

407 843-5353

 <mailto:rworman at wormanlaw.com> rworman at wormanlaw.com

NOTICE:  

THIS E-MAIL MESSAGE AND ANY ATTACHMENT TO THIS E-MAIL MESSAGE CONTAINS
CONFIDENTIAL INFORMATION THAT MAY BE LEGALLY PRIVILEGED.  IF YOU ARE NOT THE
INTENDED RECIPIENT, YOU MUST NOT REVIEW, RETRANSMIT, CONVERT TO HARD COPY,
COPY, USE OR DISSEMINATE THIS E-MAIL OR ANY ATTACHMENT TO IT. IF YOU HAVE
RECEIVED THIS E-MAIL IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY RETURN E-MAIL
OR BY TELEPHONE AT 407-843-5353 AND DELETE THIS MESSAGE.  PLEASE NOTE THAT
IF THIS E-MAIL MESSAGE CONTAINS A FORWARDED MESSAGE OR IS A REPLY TO A PRIOR
MESSAGE, SOME OR ALL OF THE CONTENTS OF THIS MESSAGE OR ANY ATTACHMENTS MAY
NOT HAVE BEEN PRODUCED BY WORMAN & SHEFFLER, P.A.

TAX ADVICE DISCLOSURE:  TO ENSURE COMPLIANCE WITH REQUIREMENTS IMPOSED BY
THE IRS UNDER CIRCULAR 230, WE INFORM YOU THAT ANY U.S. FEDERAL TAX ADVICE
CONTAINED IN THIS COMMUNICATION (INCLUDING ANY ATTACHMENTS), UNLESS
OTHERWISE SPECIFICALLY STATED, WAS NOT INTENDED TO BE USED, AND CANNOT BE
USED, FOR THE PURPOSES OF (1) AVOIDING PENALTIES UNDER THE INTERNAL REVENUE
CODE OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY
MATTERS ADDRESSED HEREIN. 

PLEASE BE ADVISED THIS LAW FIRM MAY BE ACTING AS A DEBT COLLECTOR AND IS
ATTEMPTING TO COLLECT A DEBT.  ANY INFORMATION PROVIDED WILL BE USED FOR
THAT PURPOSE.  

 

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/clc-discussion/attachments/20150706/8dc6e4d1/attachment.html>