Payment Bonds guarantee the satisfactory performance of all the contractors duties specified in a construction contract. Payment Bonds assure the Owner (the Obligee) that that labor, material and sub-contractor costs on a construction job will be paid. This assurance is for the use and benefit of all laborers, material suppliers, and subcontractors who are eligible by contract or statute for the protection afforded by the payment bonds. They can also act as a way to protect the project from liens.Paragraph
There are no lien rights in Florida when work is performed on publicly owned property. See Fla. Stat. §255.05. Section 255.05 is known as Florida’s “Little Miller Act”. It so called because the statute is modeled after a federal statute, 40 U.S.C. §270 known as the “Miller Act”. The purpose of Florida’s Little Miller Act is to protect subcontractors, material suppliers and laborers by providing an alternative remedy to mechanic’s lien on public projects. Florida’s Little Miller Act requires a person entering into a contract with the state or any county, city, or other political subdivision or public authority in excess of $100,000 for the repair or construction of a public facility to provide a payment and performance bond. The requirement may be waived by a local government for a contract in an amount of $200,000 or less. Accordingly, a potential lienors (sub-contractors, material suppliers and laborers) have the right to look to a Section 255.05 public payment bond for payment. Under section 255.05, the claimant typically has to abide by some very stringent conditions precedent and notice requirements and is only afforded a relatively small window of time to bring their claim. Therefore, it is important to discuss these issues with a Florida construction lawyer who is knowledgeable in these areas and can guide you in the right direction.
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