713.04 Subdivision Improvements

TS
Troy Smith
Tue, Mar 11, 2014 10:11 PM

Couple questions on subdivision improvement and proper payments.

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 2nd and 4th 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.

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.

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.

Thanks in advance.  Tsmith@rtlaw.commailto:Tsmith@rtlaw.com

Troy Smith | Shareholder
Board Certified Construction Lawyer
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Rogers Towers, P.A. | 818 A1A N., Suite 208 | Ponte Vedra Beach, Florida 32082
Direct 904.346.5770 | Fax 904.473.1399 | TSmith@rtlaw.commailto:TSmith@rtlaw.com | www.rtlaw.comhttp://www.RTlaw.com

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Thank you.

Couple questions on subdivision improvement and proper payments. 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 2nd and 4th 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. 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. 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. Thanks in advance. Tsmith@rtlaw.com<mailto:Tsmith@rtlaw.com> Troy Smith | Shareholder Board Certified Construction Lawyer [cid:image001.png@01CF3D52.B79F3270] Rogers Towers, P.A. | 818 A1A N., Suite 208 | Ponte Vedra Beach, Florida 32082 Direct 904.346.5770 | Fax 904.473.1399 | TSmith@rtlaw.com<mailto:TSmith@rtlaw.com> | www.rtlaw.com<http://www.RTlaw.com> TAX ADVICE DISCLOSURE: Pursuant to the requirements of Internal Revenue Service Circular 230, we advise you that any federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of: (1) avoiding penalties that may be imposed under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any transaction or matter addressed in this communication. CONFIDENTIALITY NOTICE: The information and all attachments contained in this electronic communication are legally privileged and confidential information, subject to the attorney-client privilege and intended only for the use of intended recipients. If the reader of this message is not an intended recipient, you are hereby notified that any review, use, dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately of the error by return email and please permanently remove any copies of this message from your system and do not retain any copies, whether in electronic or physical form or otherwise. Thank you.