[CLC-Discussion] Construction Liens and Bonds - CS/SB 622 and HB 473

[RPPTL CLC-Discussion]

The use of the term “direct contract” in the proposed legislation is unfortunate as it is a defined term under 713.01(9) and refers only to a contract with an Owner.  I recommend deletion of the term “direct” and replacing it with “a contract”.  Otherwise, the proposed change on its face will only apply to those in privity with the Owner (which is clearly not the intent behind the Bill).

Michael Gibbons
Shareholder
215 N. Eola Dr. | Orlando, FL 32801
D: 407.418.6378 | P: 407.843.4600
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LOCAL ROOTS. BROAD REACH. SM

From: clc-discussion-bounces at lists.flabarrpptl.org <clc-discussion-bounces at lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Thursday, February 25, 2021 1:04 PM
To: clc-discussion at lists.flabarrpptl.org
Cc: Bob Swaine (bob at heartlandlaw.com) <bob at heartlandlaw.com>
Subject: [CLC-Discussion] Construction Liens and Bonds - CS/SB 622 and HB 473

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This is the bill summary, and it sounds benign:



“The bill provides that provisions of waivers and releases are unenforceable unless the claimant has otherwise agreed to those provisions in its direct contract. The statutory forms include a form to acknowledge payment for labor, services, or materials and a form waiver or release of a lien or the waiver of the right to make a claim against the contractor’s payment bond. Accordingly, provisions included in a waiver or release that release a party from other liabilities or waive other rights are unenforceable under the bill.”
But beware – now the onus is on everyone to read the “extra” provisions that will appear in contracts that can allow “anything” to be added to a waiver and release.  Lots of room for mischief. We no longer have a standard NNP or lien release.

We have the “Person who is holding the power, has the lawyers and holds the money-releases” and the plain release for the unwashed masses.

Is this a backdoor change by the surety industry to get what they could not get last time around? A bonded job will say that the Contract Documents include the Prime Contract and all attachments. Buried in there will be language making changes on what needs to be in a NNP. We will see an explosion in litigation is my guess when sureties deny claims as being improper.

New language:
(d) A person may not require a claimant to furnish a waiver that is different from the forms in paragraphs (b) and (c) in exchange for, or to induce payment of, a progress payment or final payment unless the claimant has entered into a direct  contract that requires the claimant to furnish a waiver that is different from the forms in paragraphs (b) and (c).
(f) Any provisions in a waiver which are that is not related to the waiver of a claim or a right to claim against a payment bond as provided in this subsection are unenforceable, unless the claimant has otherwise agreed to those provisions in  the direct contract.”



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