Florida Construction Industry Law Blog



Conditional vs. Unconditional Payment Bonds in Florida

A payment bond is a security posted by the general contractor that ensures that payments will be made to subcontractors, sub-subcontractors, and material providers for services or products provided on private and public construction projects. The amount posted to exempt the owner needs to be in at least the amount of the original contract. While payment bonds are most commonly associated with public projects, which are governed by Chapter 255 (“Florida’s Little Miller Act”), Chapter 713 governs payment bonds on private construction projects. In such case, there are two types of bonds that can be obtained to exempt an owner. This blog post will cover general considerations for unconditional and conditional payment bonds. Read Full Post

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What Are Consequential Damages on a Construction Contract?

When a party breaches a contract and the contract does not contain a valid liquidated damages clause, the non-breaching party may be entitled to compensatory damages. The appropriate measure of damages arising from a breach of an enforceable contract is usually “the difference between the value expected from the contract and the value actually received by the non-breaching party.” Tenn. Gas Pipeline Co. v. Technip USA Corp., 2008 WL 3876141, at *5 (Tex. Ct. App. 2008). Actual damages flowing from the breach of contract are either “direct” or “consequential.” Direct damages are those that flow naturally and necessarily from the breach and compensate for loss that is presumed to have been foreseen or contemplated by the parties because of the breach. Id. Examples of direct damages include unpaid contract amounts, cost to repair defective work, and reduced project value due to nonconforming work. Consequential damages are damages that “do not necessarily, but do directly, naturally, and proximately result from” the injury for which compensation is sought. Read Full Post

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Riparian Rights in Florida: The Right to Accretions and Relictions

Ownership of waterfront property is very desirable in Florida and often involves unique real property considerations. But when we discuss waterfront property in Florida, one of the most attractive and most sought-out features is an incredible water view. When it comes to private waterfront property ownership, it can be difficult to distinguish where the private land rights cease and the sovereign land ownership begins. More difficult is when your neighbor begins construction or activity that actually blocks your waterfront view. As a result, a subset of real property law has emerged to address what is called “riparian rights.” Read Full Post

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Does the Davis-Bacon Act Apply to Private Projects on Public Land?

A recent federal appellate decision examined an issue regarding private construction projects on public land in District of Columbia v. Department of Labor, 819 F.3d 444 (D.C. Cir. 2016). In this particular case, the district court and the appellate court involved refused to extend the application of the Davis-Bacon Act to the project in question. With the 2016 presidential election about a month away, this recent decision is important in the context of the construction industry because the administration that wins the election—depending on their labor stance—may push for more or less application of the DBA through the Department of Labor, an executive branch agency. Moreover, given the decision of the court, legislators running for election or reelection to Congress may have labor stances that should be examined by those interested in this issue and decision. This blog examines the opinion of the court and its reasoning in reaching its decision in this case and also comments on why this case is of importance to the construction industry. Read Full Post

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Public Private Partnerships in Florida Construction

As cities have become increasingly strapped for cash having lost tax revenue from the economic downturn, more and more have turned to public private partnerships (P3s) to achieve their goals and better serve their constituencies. P3s are agreements between a public entity and a private company wherein the company agrees to design, build, finance, operate, and maintain a public facility in exchange for a series of payments over a long term. This has most frequently been seen in Florida in the form of toll roads, but public entities are increasingly choosing the P3 model to better fulfill their other needs, too. Prime candidates for the P3 structure are medical office buildings, parking garages, bus or train depots, mixed use zoning to encourage high density land use, and higher education buildings. Locations with high credit rating and unused real estate benefit are best able to utilize the P3 structure. This article will summarize Florida’s very broad P3 statute and provide a framework to understand this unique and valuable construction scheme. Read Full Post

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The Earth Movement Exclusion: How Does it Affect Construction Defect Cases?

One of the biggest considerations for parties on both sides of any lawsuit is whether insurance coverage will apply to the plaintiff’s claims. This is especially true in construction defect cases, where the cost of repairing the alleged damage can be significant, and quite often beyond the financial means of the construction professional being sued. However, many litigants in construction defect cases, on both sides of the litigation, do not understand the intricacies of the insurance policy at issue, including the Earth Movement Exclusion present in many policies. Read Full Post

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Everything Lienors Need to Know About Construction Releases in Florida

Extensive knowledge about lien releases in Florida is integral to proper protection of parties entering into a construction project. This is primarily evident for those involved in construction, whose life work consists of providing their expertise, labor, and construction materials, primarily at their own expense at the outset of each project. In order for those in the construction industry to best utilize the protections afforded to them by Florida law, the key component to the process is self-education. Each and every construction project is an investment; an investment of one’s education, time, expertise, and financial backing. The time it takes to delve into Florida law and the protection it provides is small in comparison to the abuse and loss of value one could experience without doing so. Read Full Post

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Calculating Prejudgment Interest in Construction Defects Cases

Prejudgment interest can be a substantial amount in construction defects cases—especially if it is a large commercial construction defects case or a community association construction defects case. In these types of cases, it is often a number of years before damage from the construction defects manifests, and it is not uncommon for the construction defects litigation to take more than five years to be resolved by the Court. Taking the aforementioned into consideration, it can often be ten years or more between the time the Certificate of Occupancy is issued and a judgment is rendered in the trial. Although the date when prejudgment interest accrues is the subject of this blog, ten years or more in prejudgment interest can often be more than half of the actual damages sought in this case. Historically, owners have waived these large prejudgment interest awards in favor of settlement. Although every case is unique and every situation is different, waiving prejudgment interest leaves significant money on the table. This blog will discuss some of the basics of prejudgment interest. Read Full Post

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A Game-Changer for Subcontractors in Payment Disputes

Though many construction professionals are generally familiar with Florida’s lien law, there is a little-known and little-used provision within the lien statutes that can prove to be a game-changer for subcontractors (or sub-subcontractors) when used correctly and in the proper factual circumstances. Read Full Post

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Three Key Steps for Material Suppliers to Ensure Payment

Florida Construction Lien law is designed to protect laborers and materialmen with the greatest protection that justice and equity afford. Tuttle/White Constructors, Inc. v. Hughes Supply, Inc. But just how should materialmen/ material suppliers (a “supplier”) go about protecting themselves under the Florida lien and bond law to better ensure payment? While the supplier certainly has payment rights under its contract for the materials, it is always better to have additional mechanisms to get paid. The focus of this post is to discuss ways in which a supplier can better protect its rights under the Florida Construction Lien Law (“Lien Law”). Read Full Post

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