2024 Update: Essential Clauses For Your Florida Construction Contracts

2024 is well underway, and for construction industry clients, they are busier than ever. However, it is never too early or too late to take a fresh look at your construction contracts to ensure that they are on par with legal requirements. Building on our previous guide, "What Clauses Should I Include in my Construction Contract?", this update delves deeper into the statutory amendments and their practical implications for your construction contracts. At Munizzi Law, we're committed to equipping Florida contractors with the knowledge and tools to navigate these changes effectively.

Comprehensive Guide to Updated Statutory Provisions

Prompt Payment on Public Projects

The 2023 amendments to Chapters 218 and 255, Florida Statutes, now mandate a more expedited payment process for public projects. This includes a detailed punch list process and the requirement for payment of undisputed amounts, excluding 150% of the estimated cost to complete punch list items. Here is a sample clause that might be added to a construction contract:

"Upon completion of the work, the Contractor shall submit a detailed punch list certified by an authorized representative. Payment for undisputed work shall be made excluding an amount equal to 150% of the estimated cost to complete items listed on the punch list, as per Fla. Stat. §§ 218 & 255."

Statutes of Limitation and Repose

The Florida Legislature has refined the triggers for the commencement of the statute of limitations for claims based on defective construction, maintaining the four-year limitation but providing clearer commencement triggers. Additionally, the statute of repose has been reduced from ten to seven years. Here is a sample clause that might be added to a construction contract:

"All claims based on defective construction must be brought within four years of project completion, as defined by Fla. Stat. § 95.11(3)(c), with the statute of repose for such claims limited to seven years from the date of issuance of the certificate of occupancy."

Immigration Legislation

New legislation in 2023 imposed penalties on contractors who knowingly employ unauthorized aliens, ranging from a 30-day license suspension to complete revocation. It is important for contractors who are subcontracting out any scope or trade to ensure that their subcontractors are in compliance as well. Here is a sample clause that might be added to a construction contract:

"The Subcontractor hereby certifies compliance with Florida's immigration laws and shall not knowingly employ, hire, or contract with unauthorized aliens, subject to penalties under applicable sections of local, state, and federal law."

Licensing Fee Relief

Renewal fees for licensed contractors have been reduced by 50% for the next two renewal cycles. This is great news for contractors who are applying to qualify an additional business entity. 
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Civil Remedies and Surety Bonds

As of July 2023, parties suing a surety under a performance bond are entitled to recover attorney fees if they prevail. This will help with resolving bond claims quicker and ensuring that sureties are acting in good faith prior to denying a claim.
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Construction Liens

Significant changes to Florida’s Construction Lien Law include extensions to construction management services, updates to notices of commencement, and lien document service requirements. You can read more about this specific topic in our previous article here.

Plans Review and Inspections

Building officials and fire marshals must reference specific code sections when requesting changes to plans or completed work. This is particularly helpful for builders who face vague or ambiguous requests from inspectors that increase overhead and completion timeframes. 

The current landscape for Florida's construction industry underscores the importance of staying abreast of legal changes. By incorporating these detailed clauses into your contracts, you ensure compliance, protect your interests, and foster transparency in your professional relationships. 

For personalized advice and contract drafting tailored to your specific needs, contact us today. Together, we can navigate the complexities of Florida's construction laws, ensuring your projects are not only successful but also legally sound.

NOTE: While this guide provides a foundation, the nuances of each project and company may require additional considerations. Regular consultation with legal professionals remains crucial to adapting to the evolving legal landscape and safeguarding your business against potential legal challenges. Any sample clauses provided herein are for reference only and should not be relied upon or inserted into your contract without specific legal guidance by a licensed attorney.

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