On October 1, 2019, a modification to existing law (Florida Statute s. 627.756) will take place that allows general contractors to have a statutory basis to recover attorney’s fees against its subcontractor’s performance bond.     (Obviously, the subcontractor will need to be properly defaulted pursuant to the terms of the performance bond and incorporated subcontract.)  Now, while some manuscript subcontractor performance bonds already give the general contractor a contractual right to recover attorney’s fees against the performance bond, this right will also exist by statute for performance bonds issued on or after October 1, 2019.  This modification is good news for contractors that require certain subcontractors to obtain a performance and payment bond (as opposed to enrolling the subcontractor in a subcontractor default insurance program).  Irrespective of this modification, it is still good practice for a contractor requiring a subcontractor to provide a performance and payment bond to also ensure a contractual right exists to recover attorney’s fees under a bond claim.  However, with this modification, a contractor defaulting a bonded subcontractor will also seek to recoup its attorney’s fees against the performance bond under this statute.   Good news for contractors.  Perhaps, not so good news for sureties and subcontractors required to indemnify their sureties.  


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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