Fraud In Notice Of Nonpayment Under Florida’s Construction Bond Laws
Individuals and companies in the Florida construction industry recall the sweeping changes to payment bond claim requirements two years ago, when lawmakers enacted new Notice of Nonpayment requirements for contractors. Since the amendments became effective October 2019, you are probably well-aware that you must use the statutory form and include additional information as compared to the previous version of the law. The changes impact payment bonds for both public projects and private construction, and compliance is necessary for the Notice of Nonpayment to be considered valid.
However, what you may not realize is that there is another critical provision within the 2019 amendments to payment bond claims: A section on fraudulent notices. Claimants must be diligent and fully truthful regarding the information they include in a dispute over nonpayment, and the consequences for misconduct can be severe. Your Florida bond claims attorney can explain in more detail, but an overview may help you understand the basics.
Notice of Nonpayment Requirements
Prior to 2019, contractors seeking payment were required to prepare a written document with a description of the labor, materials, or other services provided, as well as the unpaid amount. Changes to the law now require companies to complete a statutory form – which you might actually prefer over creating one. Still, there is a great deal more information that you must include, such as:
- The nature of the work that was or will be performed;
- The materials already provided or to be furnished; and
- The amount currently owed or to become due, along with any funds already paid or in retainage.
Best practices would be serving this notice via certified mail during progress of the work, but you have until 90 days after providing services/materials to deliver it.
Consequences of Fraudulent Notice of Nonpayment
To be considered valid, the contractor must sign the Notice of Nonpayment under oath and have it notarized. In other words, you are providing the equivalent of sworn testimony, so there are consequences for making false statements. By serving a fraudulent notice, you forfeit all rights you may have under the payment bond. However, the law is not intended to punish mistakes or oversights. The notice and statements will only be considered fraudulent if they:
- Intentionally exaggerate the payment due;
- Willfully submit a payment claim for work not performed or materials not furnished; or
- Are intentionally made in a way that demonstrates gross negligence, leading to an exaggeration of the amount due.
In addition, a good faith dispute over the amount due will likely NOT result in forfeiting your rights under the payment bond.
Get in Touch with a Palm Beach County Construction Bond Claims Lawyer
Contractors, property owners, and sureties must all be aware of the new construction payment bond requirements for the Notice of Nonpayment under Florida law, but you can trust an experienced attorney for the details. For more information, please contact Linkhorst & Hockin, P.A. You can set up a consultation at our offices in Jupiter, FL by calling 561-626-8880 or completing our online form.