CONSTRUCTION LAW. Mechanical Roofing Contractor. Electrical Class A Air Conditioning. Contractor Class B Air Conditioning

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1 CONSTRUCTION LAW I. Contractor Licensing 1. The Basic Rule: No person who is not certified or registered shall engage in the business of contracting in this state. FS Pinellas County Code and Pasco County Code contain similar provisions for county specialty categories. 2. Types of Licenses State certified [ ]: Division I or Division II Authorized to provide a specified service anywhere in the State; disciplined by State. State registered [ ]: Division I or Division II Authorized to provide a specified service in a specific county, disciplined by local government; registered with State. County certification [Pinellas County Code 22-14; Pasco County Code Sec ] means being licensed to engage in a specific trade within the county; disciplined by County. 3. State Certified and Registered Contractors (Construction Industry Licensing Board) (A) DIVISION I: (B) General Contractor - Unlimited Building Contractor - Commercial or residential, up to three stories Residential Contractor - Only homes, no more than two stories and limited to single-family, duplex, and three-family residences DIVISION II: Sheet Metal Contractor Mechanical Roofing Contractor Electrical Class A Air Conditioning Contractor Class B Air Conditioning Glass & Glazing - limited to 25 tons of Contractor cooling and 500,000 B.T.U. of heating Class C Air Conditioning Service Peoples Law School April 4, 2013 Langfred W. White, Esquire The Law Offices of Langfred W. White, P.A U.S. Highway 19 North, Suite 160 Clearwater, FL (727) Phone (727) Fax lan@lwwhiteattorney.com FBN# /SPN#370511

2 Commercial Roof/Spa Contractor Residential Pool/Spa Contractor Swimming Pool/Spa Servicing Contractor Plumbing Contractor Underground Utility and Excavation Contractor Solar Contractor Pollutant Storage Systems Contractor 4. Other State Licenses Electrical Contractor Licensing Board Board of Architecture and Interior Design Board of Landscape Architecture Board of Professional Engineers 5. County Licenses (A) Pinellas County Certification Any Division I or Division II Category - can be licensed by county, must be registered with state. Additional Categories Established by P.C.C.L.B. - licensed by county, not registered with state. Alarm System Contractor Awning Specialty Contractor Cabinet Contractor Carpentry Specialty Contractor Communication Systems Specialty Contractor Demolition Specialty Contractor Drywall Specialty Contractor Fence Erection Specialty Contractor Finish Carpentry Contractor Flatwork Concrete Specialty Contractor Garage Door Specialty Contractor Glass & Glazing Specialty Contractor Irrigation Systems Specialty Contractor Low Voltage Specialty Contractor Marine Specialty Contractor Natural Gas Specialty Contractor Painting Specialty Contractor Painting Limited Specialty Contractor (limited to painting and recoating of fixtures and ceramic tile in kitchens & baths, and refinishing appliances on site) Paving Specialty Contractor Pile Driving Specialty Contractor Plaster, Stucco and both Specialty Contractor Prestressed Precast Concrete Specialty Contractor Reinforcing Steel Specialty Contractor Sign - Non Electrical Specialty Contractor Sign - Electrical Specialty Contractor Shutter/Opening Protectives Specialty Contractor Specialty Structure Contractors (screened enclosures, pool bird cages, etc.) Structural Masonry Specialty Contractor Structural Steel Specialty Contractor Swimming Pool Layout Specialty Contractor Swimming Pool Structural Specialty Contractor Swimming Pool Excavation Specialty Contractor

3 Swimming Pool Trim Specialty Contractor Swimming Pool Decking Specialty Contractor Swimming Pool Piping Specialty Contractor Swimming Pool Finishes Specialty Contractor Tile & Marble Specialty Contractor Veneer Specialty Contractor (B) Pasco County Certification Any Division I or Division II Category - can be licensed by county, must be registered with state. Additional Categories Established by Pasco County - [Pasco County Code, Sec Definitions.] licensed by county, not registered with state. Specialty contractor Aluminum contractor, structural Carpenter Masonry contractor Sign contractor, electrical Sign contractor, nonelectrical Structural steel contractor Irrigation sprinkler contractor Solar energy installation contractor Drywall contractor Tile, marble and terrazzo contractor Insulation contractor Finish carpentry Aluminum specialty contractor Plastering and stucco contractor Glass and glazing Hurricane protection installation Garage door installer Marine contractor Painting contractor Mobile home installer LP gas installer 6. Exceptions to State Licensing Requirements (and some counties as well) (selected) Bona Fide Employees of Licensed Contractors Authorized government employees on jobs < $200,000 Owner/Builders No more than two family house for own use on own property Must live on property for one year after construction Must do work yourself, use bona fide employees or hire subcontractors Cost not to exceed $ 75,000 Casual, minor, or inconsequential work (less than $1,000 state and Pasco, less than $500 Pinellas)) [the handyman exclusion]. Does not apply to work for disabled, work involving toxic chemicals, structural components or life/safety matters.) Only fabricates materials for licensed contractor and does not install Sells, services, or installs window and wall air conditioners Habitat for Humanity, provided work is supervised by someone with construction experience and project is no larger than a three-family home Really Big Businesses (over $20 million and have a licensed contractor on staff) which is building on its own land

4 II. 7. Contractor Advertising Requirements License number on all advertising License number on business card License number on estimate/proposal form Company name, telephone number and license number must be displayed on both sides of vehicle used by contractor 8. Worker s Comp - F.S Contractors who are Individuals No Exemptions to Worker s Comp. Must have license in own name Contractors which are Companies Must be qualified business Company has a license number Individual who qualifies the company has his or her own license number May have up to 3 owners exemptions to Worker s Comp. Selecting a Contractor 1. Use a contractor only if it is licensed, insured, and (if the job requires it) is bonded Licensed Insurance Worker s Compensation Liability Insurance Bonds Payment Bonds Completion Bonds 2. Questions to Ask about the Builder/remodeler The legal name of the business Is a license required for this type of work Does the contractor have a Florida contractor s license or a County License? Does the type of license allow the contractor to provide the services it is offering? Get a copy of their license and/or qualification to do business. Go online to see if the Florida Construction Industry Licensing Board has ever taken disciplinary action against the contractor? If so, what happened? Does the contractor have worker s compensation for the principal and each of the contractor s employees? What kinds of insurance other than worker s comp does the contractor carry? Does the contractor use subcontractors? If so, does the contractor ensure each subcontractor is properly licensed and has worker s compensation or an exemption for each employee? Names and contract numbers of major subcontractors and suppliers. Get a copy of the standard contract to review before you agree to any proposal.

5 III. Construction Liens 1. General Purpose of Lien Law (A) Protect owners by requiring sub-contractors and suppliers to provide notice of possible liens, thus allowing the owner to prevent double payment for labor materials. (B) Protect contractors, sub-contractors, and suppliers by providing a means for them to obtain full payment. 2. What is a Lien? 3. What property can be liened. A. Only private property. B. Jointly held property where only one spouse signs. C. Tenant Occupied property. D. Small jobs may not be liened by sub-contractors and suppliers. 4. Who can Lien your property? A. Contractors, laborers, materials suppliers, subcontractors and professionals such as architects, landscape architects, interior designers, engineers or land surveyors all have the right to file a claim of lien for work or materials. B. Licensing Requirements C. Privity of Contract (1) Those in Privity of Contract with the owner (2) Those not in Privity with the owner 5. Protecting yourself from liens A. Building permit B. Notice of Commencement (NOC) Who is responsible for signing, completing and recording a NOC? What is contained in the Notice of Commencement What does the NOC do? Recording and Posting the NOC How long is a NOC effective? The 90 day rule The 1 year rule Absence of a required NOC No first inspection Construction lender s risks Improper payments What is a proper payment? NOC properly recorded Building Permit issued Lienors serving notice to owner; give releases NOC has not been terminated NOC has not expired C. Notice to Owner Must be served within 45 days of first work. Not required for those in privity with owner.

6 Must be served before contractor delivers the final contractor s affidavit It is served by personal delivery or certified mail If required but not served, claim of lien is not valid. D. When the Claim of Lien must be recorded? Record within 90 days of last work Serve within 15 days after recordation Effective for one year, unless shortened Can t be waived in advance E. Releases and Waivers Partial release of lien. Final release of lien. Conditional release of lien. Contractor s Final Payment Affidavit. Responsibility to Get Releases? A form to use A form to use to request a certification of payment - For each request for payment, the contractor should also be required to issue a sworn certification to the owner which states substantially as follows: No known construction, supplier, subcontractor or materialmen's liens are outstanding at the date of this requisition, that all due and payable bills with respect to the work have been paid to date or are included in the current application, and, except, for such bills not paid but so included, there is no known basis for the filing of any liens on the work, that such liens from all subcontractors, suppliers and materialmen have been obtained in such form as to constitute an effective waiver of the lien under the laws of the State of Florida." IV. F. Final Contractor s Affidavit G. Failure to Obtain Releases Of Lien? H. Demand for a sworn statement of account. What is it? Do I have to use a specific form? Does the contractor have to reply to my demand? I. Demand for an account designation Construction Contracts A. What can form a contract (1). Oral (2). Formal Written Agreement Standard Forms Consensus Documents AIA Forms DBIA Forms

7 AGC Forms Contractor Provided Forms Owner Forms (3). Less Formal Agreements Proposals Estimates B. Minimum Essential Parts of a Construction Contract Name of Parties Project Name and Location Scope of Work - tasks and specifications Price Payment Terms Progress payments Final payment Retainage Time and Schedule Time is of the essence cause Mile stones Final Completion Delay and Acceleration Date and signatures. C. Required Notices Verify the contract contains the required lien law notification? (note: must be in 12 point, capitalized, bold face type on the first page or a separate page which you must sign and date.) The Florida Homeowner s Construction Recovery Fund Notice? (Division I Contractors only) The Construction Defect Notice provided for by Ch. 558 Florida Statute? D. Other Terms which should be in Construction Contracts Authority Contractor warranty/guarantee. Permits and fees. Insurance. Change orders. Cleanup. Notice for rescission. Conflict resolution clause. Attorney s Fee Clauses E. Other Considerations for the Contract Verify the contract says All changes in writing Written confirmation of all discussions Monitor progress Clear specification of what is to be built Retainage

8 Avoid front loaded payment schedule V. Important Statutes and Ordinances Florida Statutes: FS 440 Worker s Compensation FS 489: Construction Contracting FS 553: Construction Standards FS 713: Construction Liens FS 558: Construction Defects FS : Homeowners Construction Recovery Fund FS Construction contracts; limitation on indemnification County Ordinances Pinellas County Code Chapter 22 - Buildings and Building Regulations Pasco County Code Chapter 18 - Buildings and Building Regulations VI. Useful Contact Information Florida Construction Industry Licensing Board: Pinellas County Construction Licensing Board: (727) Pasco County - Contractor Licensing (727)