Florida Statute s. 713.16 provides a useful vehicle under Florida’s Lien Law for parties on private projects to serve a Request for a Sworn Statement of Account on another party to potentially deprive: (a) a lienor (contractor, subcontractor, supplier, design professional) of lien / bond rights or (b) an owner of the right to recover attorney’s fees in an action to enforce a lien. An unsuspecting party that receives a Request for a Sworn Statement of Account could find itself in an undesirable position by failing to respond within 30 days after the Request.
A. An Owner Serving a Request for Sworn Statement of Account
Section 713.16(2) authorizes an owner to serve a Request for Sworn Statement of Account:
“The owner may serve in writing a demand of any lienor for a written statement under oath of his or her account showing the nature of the labor or services performed and to be performed, if any, the materials furnished, the materials to be furnished, if known, the amount paid on account to date, the amount due, and the amount to become due, if known, as of the date of the statement by the lienor. Any such demand to a lienor must be served on the lienor at the address and to the attention of any person who is designated to receive the demand in the notice to owner served by such lienor and must include a description of the property and the names of the owner, the contractor, and the lienor’s customer, as set forth in the lienor’s notice to owner….The failure or refusal to furnish the statement under oath within 30 days after the demand, or the furnishing of a false or fraudulent statement, deprives the person so failing or refusing to furnish such statement of his or her lien….The failure to furnish a response to a demand for statement of account does not affect the validity of any claim of lien being enforced through a foreclosure case filed before the date the demand for statement is received by the lienor.”
This is a useful tool for an owner that wants to obtain accounting information of a lienor that served it with a notice to owner or recorded a lien on the owner’s property. The statutory form for this Request is set forth below. If the lienor neglects to respond within 30 days after the Request, the owner has the argument that the lienor lost its lien rights by failing to respond. The Request needs to be served via certified mail, return receipt requested, or by a common carrier delivery service such as FedEx where the receipt of the Request is tracked.
REQUEST FOR SWORN STATEMENT OF ACCOUNT
WARNING: YOUR FAILURE TO FURNISH THE REQUESTED STATEMENT, SIGNED UNDER OATH, WITHIN 30 DAYS OR THE FURNISHING OF A FALSE STATEMENT WILL RESULT IN THE LOSS OF YOUR LIEN.
To: (Lienor’s name and address)
The undersigned hereby demands a written statement under oath of his or her account showing the nature of the labor or services performed and to be performed, if any, the materials furnished, the materials to be furnished, if known, the amount paid on account to date, the amount due, and the amount to become due, if known, as of the date of the statement for the improvement of real property identified as (property description) .
(name of contractor)
(name of the lienor’s customer, as set forth in the lienor’s Notice to Owner, if such notice has been served)
(signature and address of owner)
(date of request for sworn statement of account)
B. A Contractor Furnishing a Payment Bond Serving a Request for Sworn Statement of Account
Section 713.16(4) authorizes a contractor that furnished a payment bond on a private project to serve a Request for Sworn Statement of Account on a lienor (sub-subcontractor or supplier that served a notice to owner / notice to contractor):
“When a contractor has furnished a payment bond pursuant to s. 713.23, he or she may, when an owner makes any payment to the contractor or directly to a lienor, serve a written demand on any other lienor for a written statement under oath of his or her account showing the nature of the labor or services performed and to be performed, if any, the materials furnished, the materials to be furnished, if known, the amount paid on account to date, the amount due, and the amount to become due, if known, as of the date of the statement by the lienor.”
Florida Statute s. 255.05(8) (governing Florida public projects) similarly authorizes a contractor that furnished a payment bond on a Florida public project to serve a Request for Sworn Statement of Account on a claimant not in privity of contract with the contractor when the contractor receives payment from the public body.
The requirements for a contractor serving the Request are ultimately the same as the owner, except the contractor can only serve the Request when it furnishes a payment bond (since the owner’s property is exempt from liens) and the owner makes a payment to the contractor or a lienor (bond claimant). The failure to respond within 30 days after the Request should deprive the bond claimant of its rights under the payment bond.
C. A Lienor that Recorded a Lien Serving a Request for Sworn Statement of Account
Section 713.16(5) authorizes a lienor that recorded a lien to serve a Request for Sworn Statement of Account on the owner:
“Any lienor who is perfecting a claim of lien may serve with the claim of lien or thereafter a written demand on the owner for a written statement under oath showing:
1. The amount of the direct contract under which the lien was recorded;
2. The dates and amounts paid or to be paid by or on behalf of the owner for all improvements described in the direct contract;
3. The reasonable estimated costs of completing the direct contract under which the lien was claimed pursuant to the scope of the direct contract; and
4. If known, the actual cost of completion.”
The form of this request is different than the request served by the owner and needs to include the below warning on the top along with a request for the 4 categories (referenced above) taken from the statute. An owner that does not provide the statement within 30 days after the Request is not deemed the prevailing party for purposes of attorney’s fees.
WARNING: YOUR FAILURE TO FURNISH THE REQUESTED STATEMENT WITHIN 30 DAYS OR THE FURNISHING OF A FALSE STATEMENT WILL RESULT IN THE LOSS OF YOUR RIGHT TO RECOVER ATTORNEY FEES IN ANY ACTION TO ENFORCE THE CLAIM OF LIEN OF THE PERSON REQUESTING THIS STATEMENT.
Serving a Request for Sworn Statement of Account is a useful vehicle in an impending construction dispute. As shown above, this vehicle can be served by an owner, a contractor, or a lienor depending on the circumstances. Do NOT neglect the utility of serving a Request; and, do NOT ignore a Request if in receipt of one!
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.