Question 1

What is a payment bond?

Accepted Answer

A payment bond is a surety bond that guarantees that the contractor will pay its subcontractors, suppliers, and laborers. In Florida: payment bonds are required on public construction projects (Section 255.05: the Miller Act equivalent for state and local projects) and are optional (but common) on private construction projects. The bond protects: subcontractors (who may not have a direct contract with the owner), suppliers (who provide materials to the project), and laborers (who perform work on the project). If the contractor fails to pay: the surety (the bonding company) pays the unpaid parties, up to the bond amount.

Question 2

How does a Florida payment bond differ from a mechanic’s lien?

Accepted Answer

Key difference: mechanic’s lien (Chapter 713): available on private projects (subcontractors and suppliers can file liens against the property), not available on public projects (you cannot lien government property). Payment bond: available on public projects (the bond substitutes for lien rights), also available on private projects (if the owner obtains a payment bond, it may transfer lien rights to the bond; Section 713.23). On private projects: if the owner records a payment bond meeting the requirements of Section 713.23, the subcontractors’ and suppliers’ lien rights are transferred to the bond (they must make a claim against the bond instead of filing a lien against the property).

Question 3

What are the claim requirements for a Florida payment bond?

Accepted Answer

Claim requirements (Section 255.05 for public projects): the claimant must: have a direct contract with the contractor, OR have provided labor, services, or materials to the project. Notice: claimants who do not have a direct contract with the contractor must serve a written notice on the contractor within 45 days of last furnishing labor or materials. Claim deadline: the claim must be filed within 1 year after the last day of furnishing labor or materials. The claim must include: the amount owed, a description of the labor or materials furnished, and the name of the party who contracted for the labor or materials.

Payment Bond

Payment Bonds in Florida Construction

Purpose

vs. Mechanic’s Lien

Claim Requirements

Related Terms

Barnes Walker Construction Law

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