Transferring Construction Lien on Private Project to Already Furnished Payment Bond by Recording Notice of Bond

If you are a general contractor furnishing a payment bond on a private construction project (referred to as a Florida Statute s. 713.23 payment bond), a copy of the payment bond needs to be recorded with the Notice of Commencement in the official records of the county where the project is located. This way subcontractors and suppliers that have construction lien rights know that the property is exempt from construction liens and they need to properly preserve their rights against the payment bond.

Let’s say you furnish the owner with a payment bond for a private project and a copy of the bond is recorded in the official records with the Notice of Commencement but a subcontractor or supplier still records a construction lien against the owner’s property. This is frustrating because the sole purpose of furnishing the payment bond is to exempt the owner’s real property from construction liens. Instead of being frustrated, there is an easy procedure you can implement that will simply transfer that construction lien to the payment bond that you already furnished. This is done by recording a verified Notice of Bond and serving the Notice of Bond on the lienor that recorded the construction lien. This procedure shall have the effect of transferring the construction lien to the payment bond.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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