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<div class=Section1>
<p class=MsoNormal><span style='color:#1F497D'>First, 713.04(1) says that “The
total amount of liens allowed under this section shall not exceed the amount of
the direct contract under which the lienor furnishes labor, materials or
services.” Thus as to subdivision improvements, before we even look at the
proper payments defense (which effectively is a mechanism to add back into the lien
exposure sums that are “improperly paid”), we have a limit of the contract
price for subdivision improvement liens.<o:p></o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'>The proper payments defense
contemplates a scheme: <o:p></o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'>1) A non-erroneous NOC, which
does not apply to subdivision improvements. F.S. 713.04, says that there shall
NOT be a NOC. (I am puzzled by the number of NOC’s that still get recorded for
subdivision improvements.) So the NOC is not a factor for subdivision
improvements.<o:p></o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'>2) Releases from senders of NTO
to the extent of payments made to the contractor after a timely NTO has been
received. Otherwise the payment is improper as to the sender of the NTO to the
extent of such payment and can be brought back into the limit of the contract
price. <o:p></o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'>3) For final payment, the owner
must obtain (and the contractor must give) a FKA before final payment is made.
The owner can rely on the FKA but for those who have served NTO. <o:p></o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'>With those conditions, the owner’s
exposure for liens is limited to the direct contract price. You protect the
owner with progress payment affidavits that expressly address laborers,
releases from senders of NTO, and releases from those listed in an FKA.<o:p></o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'>There are some other sentences
in 713.06(3) that bear mentioning. <o:p></o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'>With respect to progress
payments in (c) it says: “The owner shall be under no obligation to any lienor,
except laborers, from whom he or she has not received a NTO at the time of
making the payment.”<o:p></o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'>With respect to the final
payment in (d)4. It says that the owner can rely on the FKA as to any lienors
who have not given notice (and thus cannot rely on the FKA as to lienors who
have given notice.)<o:p></o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'>Thus, but for laborers (who
should be handled by requiring an affidavit from the contractor that they have
all been paid, which affidavit will be relied upon in making any payment)
unless there are unpaid contract sums after proper payments I don’t see where a
non-privity lienor who has not served NTO has a lien in excess of unpaid
contract funds. <o:p></o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'>The potential surprise exposure
would be laborers of subs and sub-subs who never must serve a NTO, but that
exposure is rarely if ever significant because if laborers don’t get paid they
don’t keep working for months. <o:p></o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p>
<div>
<p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><b><span style='font-family:"Arial Rounded MT Bold","sans-serif";
color:#215868'>Larry R. Leiby, Esq.<o:p></o:p></span></b></p>
<p class=MsoNormal><b><span style='font-family:"Arial","sans-serif";color:#1F497D'>Malka
& Kravitz, P.A. <o:p></o:p></span></b></p>
<p class=MsoNormal><b><span style='font-family:"Arial","sans-serif";color:#1F497D'>1300
Sawgrass Corp. Pkwy., Suite 100 <o:p></o:p></span></b></p>
<p class=MsoNormal><b><span style='font-family:"Arial","sans-serif";color:#1F497D'>Ft.
Lauderdale, FL 33323<o:p></o:p></span></b></p>
<p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:#1F497D'>Phone: 954-895-9198 Assistant: 954-514-0984<o:p></o:p></span></b></p>
<p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:#1F497D'>Fax: 954-514-0985 e-mail: leiby@mkpalaw.com<o:p></o:p></span></b></p>
<p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:#1F497D'><o:p> </o:p></span></b></p>
<p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Arial Rounded MT Bold","sans-serif";
color:#1F497D'>Board Certified in Construction Law<o:p></o:p></span></b></p>
<p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Arial Rounded MT Bold","sans-serif";
color:#1F497D'>Fla. Supreme Court Certified Circuit Court Civil Mediator and
Arbitrator<o:p></o:p></span></b></p>
<p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Arial Rounded MT Bold","sans-serif";
color:#1F497D'>IMI Certified Mediator<o:p></o:p></span></b></p>
<p class=MsoNormal><b><span style='font-family:"Arial Rounded MT Bold","sans-serif";
color:#1F497D'>
<o:p></o:p></span></b></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial Rounded MT Bold","sans-serif";
color:#1F497D'>Fellow, College of Commercial Arbitrators<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial Rounded MT Bold","sans-serif";
color:#1F497D'>Member, Leiby Alexander Brandt ADR Group, LLC<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial Rounded MT Bold","sans-serif";
color:#1F497D'>Member, JAMS Global Engineering and Construction
Panel <o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial Rounded MT Bold","sans-serif";
color:#1F497D'>Member, National Academy of Distinguished Neutrals <o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial Rounded MT Bold","sans-serif";
color:#1F497D'> </span><span style='color:#1F497D'><img
width=112 height=94 id="Picture_x0020_0"
src="cid:image008.jpg@01CF3DF7.71586A70" alt="Description: JAMSadr.com.jpg"></span><span
style='font-size:10.0pt;font-family:"Arial Rounded MT Bold","sans-serif";
color:#1F497D'> <o:p></o:p></span></p>
</div>
<p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p>
<div>
<div style='border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0in 0in 0in'>
<p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'>From:</span></b><span
style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'> clc-discussion-bounces@lists.flabarrpptl.org
[mailto:clc-discussion-bounces@lists.flabarrpptl.org] <b>On Behalf Of </b>Troy
Smith<br>
<b>Sent:</b> Tuesday, March 11, 2014 6:26 PM<br>
<b>To:</b> Weintraub, Lee; clc-discussion@lists.flabarrpptl.org<br>
<b>Subject:</b> Re: [CLC-Discussion] 713.04 Subdivision Improvements<o:p></o:p></span></p>
</div>
</div>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal><span style='color:#1F497D'>Thanks Lee,<o:p></o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'>Agreed but I get the same list,
maybe even more accurate, at the beginning with the contract clause. I
have only used 713.065 when the project was in trouble, but it could be a
monitoring aid as well. I understand the lien angle on 713.065 but I am
not worried about a lien from the site work prime contractor. In this
case it is the multiple (20+) unpaid lienors that did not give notice. <o:p></o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'>So it seems getting the sub
list, either via contract or the 713.065, and checking down the payment to the
subs is the safest way to monitor payments for subdivision improvements. <o:p></o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p>
<div>
<p class=MsoNormal style='mso-margin-top-alt:auto'><b><span style='font-size:
10.0pt;font-family:"Arial","sans-serif";color:#7F7F7F'>Troy</span></b><span
style='font-size:12.0pt;font-family:"Times New Roman","serif";color:#1F497D'> </span><b><span
style='font-size:10.0pt;font-family:"Arial","sans-serif";color:#7F7F7F'>Smith</span></b><span
style='font-size:10.0pt;font-family:"Arial","sans-serif";color:#7F7F7F'> |
Shareholder</span><span style='font-size:7.5pt;font-family:"Arial","sans-serif";
color:#7F7F7F'> </span><span style='font-size:12.0pt;font-family:"Times New Roman","serif";
color:#1F497D'><o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:#7D7D7D'>Board Certified Construction Lawyer<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:7.5pt;font-family:"Arial","sans-serif";
color:#7F7F7F'><img width=249 height=65 id="_x0000_i1025"
src="cid:image009.png@01CF3DF7.71586A70"></span><span style='font-size:12.0pt;
font-family:"Times New Roman","serif";color:#1F497D'><o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:#7F7F7F'>Rogers Towers, P.A. | 818 A1A N., Suite 208 |
Ponte Vedra Beach, Florida 32082</span><span style='font-size:12.0pt;
font-family:"Times New Roman","serif";color:#1F497D'><o:p></o:p></span></p>
</div>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:#7F7F7F'>Direct 904.346.5770 | Fax 904.473.1399 | <a
href="mailto:TSmith@rtlaw.com" title="Click to send email to Troy Smith"><span
style='color:#7F7F7F'>TSmith@rtlaw.com</span></a> | <a
href="http://www.RTlaw.com" title=""><span style='color:#7F7F7F'>www.rtlaw.com</span></a></span><span
style='color:#1F497D'><o:p></o:p></span></p>
<div>
<div style='border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0in 0in 0in'>
<p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'>From:</span></b><span
style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'> Weintraub, Lee
[mailto:lweintraub@bplegal.com] <br>
<b>Sent:</b> Tuesday, March 11, 2014 6:17 PM<br>
<b>To:</b> Troy Smith; clc-discussion@lists.flabarrpptl.org<br>
<b>Subject:</b> RE: 713.04 Subdivision Improvements<o:p></o:p></span></p>
</div>
</div>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:blue'>The owner can request a list of subs and suppliers under 713.165</span><span
style='font-size:12.0pt;font-family:"Times New Roman","serif"'><o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:12.0pt;font-family:"Times New Roman","serif"'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:12.0pt;font-family:"Times New Roman","serif"'><o:p> </o:p></span></p>
<p class=a2dfdba8-2395-42af-a9f3-34cf6e13ed32 style='margin-bottom:12.0pt'><b><span
style='font-family:"Verdana","sans-serif"'>Lee</span></b><span
style='font-family:"Verdana","sans-serif"'> <b>A. Weintraub</b></span><br>
<span style='font-size:10.0pt;font-family:"Verdana","sans-serif"'>Shareholder<br>
Board Certified in Construction Law<br>
Chair, Public Private Partnerships Practice Group<br>
Vice Chair, Construction Law and Litigation Practice Group</span><o:p></o:p></p>
<p class=a2dfdba8-2395-42af-a9f3-34cf6e13ed32><span style='font-size:10.0pt;
font-family:"Verdana","sans-serif"'>1 East Broward Blvd., Suite 1800 |
Fort Lauderdale, FL 33301</span><br>
<span style='font-size:10.0pt;font-family:"Verdana","sans-serif"'>Tel:
954.985.4147 | Fax: 954.985.4176 | <a href="mailto:lweintraub@bplegal.com"
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<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Verdana","sans-serif"'><br>
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<p class=MsoNormal style='margin-bottom:12.0pt'><b><span style='font-size:10.0pt;
font-family:"Tahoma","sans-serif"'>From:</span></b><span style='font-size:10.0pt;
font-family:"Tahoma","sans-serif"'> <a
href="mailto:clc-discussion-bounces@lists.flabarrpptl.org">clc-discussion-bounces@lists.flabarrpptl.org</a>
[<a href="mailto:clc-discussion-bounces@lists.flabarrpptl.org">mailto:clc-discussion-bounces@lists.flabarrpptl.org</a>]
<b>On Behalf Of </b>Troy Smith<br>
<b>Sent:</b> Tuesday, March 11, 2014 6:11 PM<br>
<b>To:</b> <a href="mailto:clc-discussion@lists.flabarrpptl.org">clc-discussion@lists.flabarrpptl.org</a><br>
<b>Subject:</b> [CLC-Discussion] 713.04 Subdivision Improvements</span><span
style='font-size:12.0pt;font-family:"Times New Roman","serif"'><o:p></o:p></span></p>
<p class=MsoNormal>Couple questions on subdivision improvement and proper
payments. <o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal>As we all know, non-privity subdivision lienors are not
required to serve a NTO as a condition precedent to their right to record a
valid lien. The 2<sup>nd</sup> and 4<sup>th</sup> DCA were split on
whether the proper payments procedures of 713.06 applied to this work.
713.04 was subsequently amended and it is my understanding that this work is
now subject to the proper payment provisions. A non-privity subdivision
lienor may choose to serve a NTO and, upon such service, the Owner has an
affirmative to duty (under 713.06(3)(c)) to cause said subcontractor giving
notice to be paid. Those are the easy ones. However, the
non-privity subdivision lienor is not required to serve the NTO. Presumably,
if proper payments are otherwise made, and final payment is made in reliance
upon a CFA that does not disclose said lienor, that non-privity
subdivision lienor, that has not served a NTO, but which lienor is still within
its 90 days to record a lien, is barred if the owner makes final payment in
accordance with the CFA prior to the lienor recording its lien.<o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal>First, in this scenario, is this non-privity lienor’s lien
barred by the owner’s proper payments? This is clearly true if we are
talking NTO’s at the end of a job but a NTO is not required in this
situation. Still if the Owner makes proper payments, it cannot be
required to pay more than the contract balance and it can rely on the final CFA
unless lienors giving notice are not listed on the affidavit.<o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal>Second, does anyone have any recommendations for complying
with the proper payment procedures when constructing horizontals. This
owner does not have a super on site to monitor and prepare a list of the active
subs. I can only think of getting a list of the subs (at least the major
ones) in advance pursuant to a contractual requirement and checking down the
sub list with each payment app. <o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal>Thanks in advance. <a href="mailto:Tsmith@rtlaw.com">Tsmith@rtlaw.com</a>
<o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal style='mso-margin-top-alt:auto'><b><span style='font-size:
10.0pt;font-family:"Arial","sans-serif";color:#7F7F7F'>Troy</span></b><span
style='font-size:12.0pt;font-family:"Times New Roman","serif"'> </span><b><span
style='font-size:10.0pt;font-family:"Arial","sans-serif";color:#7F7F7F'>Smith</span></b><span
style='font-size:10.0pt;font-family:"Arial","sans-serif";color:#7F7F7F'> |
Shareholder</span><span style='font-size:7.5pt;font-family:"Arial","sans-serif";
color:#7F7F7F'> </span><span style='font-size:12.0pt;font-family:"Times New Roman","serif"'><o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:#7D7D7D'>Board Certified Construction Lawyer<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:7.5pt;font-family:"Arial","sans-serif";
color:#7F7F7F'><img border=0 width=249 height=65 id="_x0000_i1033"
src="cid:image009.png@01CF3DF7.71586A70"></span><span style='font-size:12.0pt;
font-family:"Times New Roman","serif"'><o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:#7F7F7F'>Rogers Towers, P.A. | 818 A1A N., Suite 208 |
Ponte Vedra Beach, Florida 32082</span><span style='font-size:12.0pt;
font-family:"Times New Roman","serif"'><o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif";
color:#7F7F7F'>Direct 904.346.5770 | Fax 904.473.1399 | <a
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href="http://www.RTlaw.com" title=""><span style='color:#7F7F7F'>www.rtlaw.com</span></a></span><o:p></o:p></p>
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<o:p></o:p></p>
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