The 2012 Florida Legislature was surprisingly active on construction related issues considering the twin problems of reapportionment and a budget shortfall. Highlights include the passage of the crane regulation bill after years of trying. For registered contractors the ability to become certified contractors by a grandfathering procedure has been revived.
There were some changes in some of the statutory forms related to liens and bonds. The revised forms have been posted in the Forms section of the website. There were changes related to the Department of Business and Professional Regulation including the deletion of licensing of glass and glazing subcontractors that was inserted just last year.
You are cautioned that at the time of posting not all of these bills have been addressed by the Governor so those not addressed are subject to veto. You must also recognize that these are only summaries and portions of some bills not deemed relevant to the construction industry are not part of these summaries.
There were a couple of notable failures. The Workplace Security Act (HB 1059/SB 1610) would have established a single system for obtaining security checks and issuance of badges to allow contractors to work on school sites. Presently, this must be done with each separate school board. It passed the House and two of the three committees in the Senate, but was not taken up by the Senate. The Fair Competition Act would have banned local preferences in construction bidding. It passed two committees in the House and one in the Senate but got no further.
As always, we are available to discuss the impact of any of these bills on your business. Please contact me at (813) 251-3013 or Steve@MarloweMcNabb.com
House Bill 521/Senate Bill 992 – Regulation of Cranes
This issue has been before the legislature for several years and finally passed in this session. It amends Section 489.113 of the Florida Statutes to preempt any regulation of hoisting equipment, mobile cranes, conveyors, and tower cranes used in construction. This prevents a patchwork of different regulations by cities and counties. The effect is to make the recent OSHA changes to the rules regulating crane operations as the single standard to be followed. In addition, the prohibitions and preemptions include worksite regulations regarding hurricane preparedness or public safety.
The bill has been signed by the Governor and takes effect immediately.
House Bill 897/Senate Bill 1202 – Construction Liens and Bonds
This bill makes a number of technical changes to Florida Statutes Section 95.11 relating to statutes of limitations, Section 255.05 relating to bonds on public projects and Chapter 713 Part I relating to liens and bonds on private projects and modifies Section 255.0518 to require public bid openings.
Section 95.11 was amended to make it clear that payment bonds under Section 255.05 and Chapter 713 as well as payment bonds under Section 337.18 are subject to the one year statute of limitation established in those sections. Payment bonds which are not subject to those sections also have a one year statute of limitation under Section 95.11(5)(e).
For Section 255.05 this bill now:
- Requires that the bond number assigned by the surety be placed on the first page of the bond.
- Requires that the contractor, before commencing work, record the required statutory bond in the official records of the county where the project is located and provide the public entity contracting for the work a certified copy of the recorded bond. The public entity may not make any payments on the project until it receives the certified copy.
- Requires the governmental entity having charge of the work to provide a certified copy of the contract with the general contractor and the recorded bond upon the request of a claimant.
- Provides, for contracts entered into after October 1, 2012, that any limitation or expansion of the effective duration of the bond or any additional conditions precedent to the enforcement of a claim are unenforceable
- Requires that the contractor or its attorney serve a Notice of Contest of Claim Against Payment Bond rather than the Clerk of Court.
- Changes the requirement that a Notice to Contractor be “delivered” to a requirement that it be “served.”
- Provides that where the contractor records and furnishes the public entity with a bond and written consent of surety, the public entity may not condition payment on the production of a release or waiver from a claimant. The surety may revoke its consent by serving written notice on the public entity. This will apply only to contracts entered into on or after October 1, 2012.
Section 255.0518 was amended to:
- Require that sealed bids for construction work which include prices be opened in a public meeting and the name and amount of the bid must be announced at that time.
- Require a public entity to make available, upon request, the name of a bidder and amount of the bid.
For Chapter 713 Part I, this bill:
- Amends 713.10 – Liens on Leaseholds – to make the prohibition of liens on a particular property effective for a leasehold that has a lien prohibition even if some of the other leases on the property do not have language prohibiting liens.
- Amends 713.13 – Notice of Commencement – to delete language in the Notice of Commencement stating that the Notice of Commencement may not expire before the completion of construction and final payment to the contractor.
- Amends 713.132 – Notice of Termination – to require service of the Notice of Termination only upon those who have served a Notice to Owner or who have a direct contract with the owner.
- Amends 713.16 – Demand for copy of contract and statements of account – to require that any request for a sworn statement include a description of the property, the names of the owner, contractor, and the lienor’s customer as set forth in the lienor’s Notice to Owner or for a bonded job, the Notice to Contractor.
- Amends 713.18 – Manner of serving notices and other instruments – to add “common carrier delivery service” and “global express guaranteed” to the methods of service and deleting “overnight or second day delivery. It would allow posting of a notice on a site only when other methods of service cannot be accomplished.
- Amends 713.18 – Manner of serving notices and other instruments – to provide that service of a Notice to Owner or a Notice to Contractor is effective as of the date of mailing if it is sent by one of the specified methods and is mailed within forty days of commencing work and a log of the mailing is maintained.
- Amends 713.18 – Manner of serving notices and other instruments – to allow reformatting a bad address in a Notice of Commencement and use of an address from the building permit application if the address in the Notice of Commencement is bad.
- Amends 713.23 – Payment bond – to provide that where a copy of the bond is not attached to the recorded Notice of Commencement, the Notice to Contractor may be served up to forty-five days after the lienor is served with a copy of the bond.
- Amends 713.23 – Payment bond – to provide that a Notice to Owner served on a contractor meets the requirement for a 45 day Notice to Contractor.
- Amends 713.23 – Payment bond – to clarify that a combined Notice to Owner and Notice to Contractor may be used and makes minor changes to the statutory form of the Notice to Contractor.
- Amends 713.23 – Payment bond – to provide that where the bond is not recorded before commencement of construction, the time for serving a Notice of Nonpayment may be calculated, at the option of the lienor, as 90 days from final furnishing of labor or material or 90 days after the lienor is served with a copy of the bond.
- Amends 713.23 – Payment bond – to allow a contractor to serve a Notice of Contest of Bond rather than the current requirement that the Clerk serve it.
- Amends 713.23 – Payment bond – to provide that, for contracts entered into after October 1, 2012, any limitation or expansion of the effective duration of the bond or any additional conditions precedent to the enforcement of a claim are unenforceable.
- Amends 713.23 – Payment bond – to require that the bond be attached to any Notice of Bond.
- Amends 713.23 – Payment bond – to allow a contractor to serve a Notice of Bond rather than the current requirement that the Clerk serve it.
This becomes law on October 1, 2012.
SB 1202 Construction Liens and Bonds
House Bill 1013/Senate Bill 1196 Construction Warranties
A number of years ago, Florida courts created a common law implied warranty for construction called the Warranty of Habitability. This is similar to the implied Warranty of Fitness and implied Warranty of Merchantability that is applicable to goods. The implied part means that it exists as a matter of law as distinguished from a written warranty. The Warranty of Habitability extends only to residential improvements and only to the first purchaser. Several cases have addressed the issue of how far the coverage of this warranty extends. They have held that the warranty only extends to the home or other improvements immediately supporting the home.
In a recent case, this warranty was extended to cover roads and drainage systems that were part of the subdivision improvements where the home in question was located. This Act creates Section 553.835 in the Florida Building Codes section of the statutes and contains legislative findings that this warranty should not extend to “off-site Improvements.” Off-site improvements are defined as the street, road, driveway, sidewalk, drainage, utilities or any other improvement or structure that is not located on or under the lot except for improvements that are shared by two or more separately owned structures that are attached, if such improvements affect the habitability of one or more of the structures.
This act forbids any cause of action by the purchaser of a home or a homeowners’ association for off-site improvements. This does not alter any existing rights of purchasers of homes or homeowners’ associations to pursue any other causes of action arising from defects on offsite improvements based on contract, tort or statute including, but not limited to, Sections 718.203 and 719.203. This act is retroactive which means that it will apply to any pending cases.
This becomes law on July 1, 2012.
HB 1013 Construction Warranties
House Bill 1277/Senate Bill 1586 Regulation of Money Services Business
This bill places new regulations on check cashing services. A statewide grand jury found a number of instances in which shell corporations were formed. The shell would then obtain minimal workers’ compensation coverage and proceed to lend its name and policy to unlicensed, uninsured contractors to allow them to meet requirements for insurance to work on a project. Payment would then be made by the general contractor by check to the shell company. That check would then be converted to cash by the check cashing service and the money divided among the parties participating in the scheme.
This becomes law on July 1, 2012.
HB 1277 Money Services Businesses
House Bill 885 Copper Theft Bills
This bill deals with the continuing problem of theft from job sites of metals for recycling. It establishes a number of new requirements for second hand metal dealers. Among these are electronic transmissions of all purchases by 10:00 AM, the next day to local law enforcement. It limits the types of identification that can be used. It defines “restricted regulated materials” as things such as manhole covers, street signs, copper coils, stainless steel beer kegs, among others and requires proof of ownership before a sale.
This becomes law on July 1, 2012.
Senate Bill 704 Building Code Bill
This is the glitch building code bill for the Session. It has the same language as SB 1202 requiring local governments to publicly open and read bids. It also has the same language as HB 387 allowing voluntary electronic filing of construction plans.
Among other things it:
- Defines a “bedroom.”
- Allows transfer of permits for onsite sewage treatment along with title to the property; provides that an onsite sewage treatment system is not abandoned by disconnection caused by a disaster and that change to an onsite sewage treatment system is not required for a remodeling addition that does not add a bedroom.
- Requires use of an electrician for work on solar panels when the local government is participating in the Department of Energy Rooftop Solar Challenge.
- Adds skylights and related work to the scope of work of a roofing contractor.
- Allows Class A and Class B Air Conditioning Contractors and Mechanical Contractors to test and evaluate HVAC systems, but mandatory licensing is not established for these services.
- Deletes the provision for licensing glass and glazing contractors added last year. This language is also in HB887/SB 1252.
- Makes the contractor responsible for the work of an unlicensed subcontractor working under his license.
- Exempts reconstruction and repair of hunting cabins from the Building Code under certain conditions.
- Requires specific identification of reasons for denying or revoking a building permit.
- Sets up a work group to develop a rule for alternate design of screen enclosures to allow removal to accommodate high wind events.
This act takes effect July 1, 2012 and has been approved by the Governor.
House Bill 317 Streamlining and Reducing Regulation
This bill addresses a number of statutes primarily regulating various professions. It waives the initial licensing fee for military veterans who apply for a license within 24 months of being honorably discharged. The current requirement for reactivating inactive licenses is that the license holder seeking to reactivate the license must complete all of the continuing education requirements for the period that the license was inactive. This has now been reduced to no more than the equivalent of one renewal cycle for a license. The exceptions to this are accountants and real estate brokers. Most of the rest of this bill deals with changes to appraisal and real estate regulations as well as regulation of prescription drugs.
This act takes effect July 1, 2012.
HB 317 Streamlining and Reducing Regulations
House Bill 887/Senate Bill 1252 Department of Business and Professional Regulation
This bill also contains the same language found in HB 317 waiving fees for military veterans and changing the continuing education requirements for reactivation of an inactive license.
It allows DBPR to approve continuing education providers and courses rather than the separate regulatory boards. The DBPR will determine the contents of any documents submitted for approval of a continuing education provider or course rather than each individual board setting its own documentation requirements.
It allows for email notice of licensing renewal and requires each licensee of the DBPR to provide an email address to the DBPR.
This also has similar language regulating real estate appraisal as that found in HB 317.
It makes it a disciplinary violation for an appraisal management company to require an individual appraiser to sign an indemnification agreement holding the appraisal management company harmless.
It deletes the provision for licensing as a glass and glazing contractor that was added last year.
Up until 2005 there were provisions for registered contractors to be grandfathered in to become certified contractors. It required a valid registered local license, passing of a written exam substantially similar to the requirements of a certified contractor, at least 5 years of experience as a contractor, no license revocation or suspension and no fine in excess of $500.00 in the previous 5 years and there is compliance with the insurance and financial responsibilities set out in Section 489.115(5). This has been effectively reenacted by moving the expiration date to November 1, 2014.
This bill has been signed by the Governor and the majority of its provisions take effect October 1, 2012.