Florida Statutes Section 713.05 allows both a contractor and its subcontractor construction liens for the same work– but they both can’t be paid for that work.

Did you know that a contractor and a subcontractor may each claim a lien for the same work on a project.  However, the contractor and the subcontractor cannot both recover damages for the same work.  Florida Statutes Section 713.05 allows both a contractor and a subcontractor to maintain separate construction liens for the same work if there are not multiple recoveries on payment for that work.  While Florida Statutes Section 713.05 prohibits a double recovery; it does not prohibit separate parties from filing and enforcing separate claims of lien for the same work.  See Plaza Builders, Inc. v. Regis, 502 So. 2d 918, 922 (Fla. 2d DCA 1986) (applying Section 713.05, Florida Statutes, and holding that “[a] contractor’s award is not to be reduced by a subcontractor’s claim unless the subcontractor has filed a lien and recovered thereon”).

The insurance company wants my sworn statement and/or an examination under oath, what do i do?

Sworn Statements and EUO’s (Examination Under Oath)

A EUO is a sworn statement that will bind you under the law that insurance companies try to use to their advantage. After a loss, your insurance company may demand that you sit for an EUO or provide a recorded sworn statement. This is an intimidation tactic commonly used by the insurer under the guise of investigating your claim. This is not done to help you. Rather, this is done to poke holes in your claim and support an insurer’s decision to deny or under pay your claim. Getting you to sit for a quasi deposition is yet another way the army of adjusters, investigators, and attorneys working for them will do everything in their power to intimidate and persuade you to accept less than your policy says you deserve. Contact Friedman Legal and we will provide you with the counsel and guidance you need.

To Perform or Not Perform, That is the Question.

You haven’t been paid for months. You are struggling to meet payroll and your expenses continue to mount, yet the general contractor or the owner continues to demand that you not only continue to perform, but perform extra work, perform in changed conditions or work an accelerated schedule with no payment in sight.  What do you do?  Do you continue to perform work and submit claims for the extra work and changed conditions? Or do you suspend work or terminate the contract?

Termination or Suspension

While the decision to stop work can be easy in a clear cut case where a contractor has not been paid amounts undisputedly due, unfortunately such clear cut cases rarely present themselves.  In a more complicated situation, a contractor’s incorrect decision to suspend or terminate performance can be much more costly than continuing performance.

By suspending or terminating performance, a contractor runs the risk that the owner (or upstream contractor) is actually justified in not making payment.  For instance, what the contractor believes to be extra work for which it has not been paid may actually be in scope.  What the contractor views to be an excusable delay may not actually be excusable.   What the contractor views as a change in conditions may have been something that the contractor should have anticipated at the time of contracting.  In short, what the contractor believed was a basis for termination of performance may instead be a default on the part of the contractor.

When the contractor suspends or terminates its performance it may temporarily stop the bleeding because it will not be incurring the costs of performance.  At the same time, however, it is unlikely to see any further payment from the owner until the dispute is resolved.  Further, the contractor loses control over the amounts that the project owner expends to complete the contractor’s work after termination – costs the contractor will be liable for if it terminated performance without justification.

Continued Performance

While a contractor need not endlessly extend credit to a non-paying owner, there may be reasons to do so for a period of time.  As stated above, by not terminating performance, the contractor remains in control of the costs and timing of completion of the work.  Further, the contractor can make claims for the increased costs associated with performing extra work, performing through delays and changed conditions while continuing performance.  The contractor can also record a mechanic’s lien to secure payment for not only the base contract amount, but the additional amounts for the claims.  Thus, in many cases the right decision for the contractor, despite non-payment, may be to continue performance of the work.


The decision to terminate or continue performance of a contract in the face of non-payment is rarely an easy one.  Careful consideration should be given to the likelihood of success of demonstrating that the contractor is not in material breach and that the owner is.  Further, the contractor needs to look at the cost to complete the project, and the ability to recoup those costs from the owner, either in the ordinary course of business or through dispute resolution. If you find yourself in this situation, contact Friedman Legal for a free consultation.

Is a Shower Pan Leak Covered By Your Condominium Insurance?

Shower pan losses are very common occurrences in Florida. What happens if you live in a condominium and your upstairs neighbor’s shower pan fails causing damage to your unit? For a Florida condominium owner who has a shower pan loss within their condominium, the homeowner’s policy usually covers the damages caused by the water but does not pay to repair the damaged or broken shower pan itself.  Your neighbor’s unit? That’s different.

First, the cause of the leak must be identified. If you think that when water emanates from a condominium unit, that unit is automatically responsible for the damages to that unit, the common elements, and to other units- you are wrong. A unit owner is only responsible for damage to someone else’s property if the damage was caused by that owner’s carelessness (negligence), or by their intentional act. For example, if a unit owner leaves their bathtub running and it overflows, causing a flood – that unit owner will be legally responsible for the damage caused to the other units.

The Florida Condominium Act, Section 718.111(11), provides that:

The condominium association must insure the condominium property as originally installed by the developer, minus certain delineated items.

The association is responsible for everything except the following, for which the unit owner is responsible: all personal property within the unit or limited common elements, and floor, wall, and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments, including curtains, drapes, blinds, hardware, and similar window treatment components, or replacements of any of the foregoing which are located within the boundaries of the unit and serve only such unit.

In the event of a shower pan leak causing water damage, the association would be responsible for repairing the drywall and ceilings. The unit owners are responsible for their own personal property, including floor coverings, cabinets, and furniture. This is yet another example as to why every unit owner must carry their own insurance to ensure that they will be covered in an event of a loss.

Pay-When-Paid Versus Pay-If-Paid Provisions

Florida recognizes two types of contingent payments clauses- pay-when-paid clauses and pay-if-paid clauses. These two clauses have very different legal effects. 

A pay-when-paid clause links the timing of the contractor’s obligation to make payment to the subcontractor to the time when payment is made to the contractor by the owner.  A pay-when-paid clause does not relieve the contractor of the contractual obligation to ultimately pay the subcontractor.  Instead, under a pay-when-paid clause, the contractor is ultimately required to pay the subcontractor within a “reasonable time” of the subcontractor’s completion of its work, even if the contractor does not ever receive payment from the owner.  What constitutes such a “reasonable time” is not clear cut and can vary greatly depending on the facts and circumstances of your case. 

Alternatively, a pay-if-paid clause makes the contractor’s obligation to pay the subcontractor entirely conditional on the contractor first receiving payment from the owner.  A pay-if-paid clauses shift the risk of the owner’s nonpayment from the contractor to the subcontractor, so that if the owner never pays the contractor, the contractor has no legal obligation to ever pay the subcontractor.

Contingent Payment Clauses are enforceable in Florida. 

In Florida, the courts will generally only enforce a pay-if-paid clause as written if it uses words expressly making payment from the owner a “condition” or a “condition precedent” to the contractor’s obligation to pay the subcontractor, or if it expressly states the contractor’s payment obligation is “contingent” upon the contractor receiving payment from the owner.  Without language clearly and unequivocally expressing the intent to shift the risk of owner nonpayment to the subcontractor, Florida courts will construe the clause as simply creating an obligation for the contractor to pay the subcontractor within a reasonable time of the subcontractor’s work, i.e. as a pay-when-paid clause.