Does a private company building on leased public airport land have to post a performance and payment bond under Florida law?

Subject

Performance bond, lessee of airport property

Plain-English summary

Counsel for the Orlando Sanford Airport Authority asked whether a private, for-profit tenant on public airport land, building a private hangar building under a long-term ground lease, had to obtain a payment and performance bond under section 255.05, Florida Statutes. The Attorney General's office answered with informal comments and said the answer was controlled by the terms of the lease itself, Ground Lease 2003-08.

Section 255.05, often called Florida's "little Miller Act," requires anyone entering a formal contract for the construction of a public building or public work to post a payment and performance bond before starting. Rather than resolve whether the private hangar was a "public building or public work" in the abstract, the office pointed to two provisions of the ground lease. Section 20 provided that all improvements placed on the premises immediately became the property of the airport authority, a governmental entity. And section 22.J expressly required the lessee to provide a payment and performance bond "in accordance with Section 255.05, Florida Statutes" for any improvements. Because the contract itself required the bond, and the office had to assume the validity and binding nature of that provision, the practical answer was that the tenant had to post the bond.

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

Section 255.05(1)(a) requires any person entering a formal contract with the state, a county, a city, a political subdivision, or other public authority "for the construction of a public building, for the prosecution and completion of a public work, or for repairs upon a public building or public work" to execute, deliver, and record a payment and performance bond from an authorized surety before commencing work. The opinion explained that the statute was patterned after the federal Miller Act (40 U.S.C. ss. 3131-3134) and serves as Florida's "little Miller Act," aimed at protecting suppliers on public projects, who cannot record materialmen's liens against public property, by giving them bond security comparable to what a lien provides on private projects. The statute is remedial and entitled to liberal construction, and it has been part of Florida law since 1915 (Ch. 6867, Laws of Florida).

This was an informal response, and the office grounded its answer in the contract rather than a freestanding statutory determination. Section 20 of Ground Lease 2003-08 made improvements the property of the airport authority, a dependent special district and governmental entity, and barred the lessee from creating any lien on the land or project. Section 22.J then specifically required the lessee, Orlando Sanford Airport Southeast Ramp Hangar Development, Inc., to furnish a payment and performance bond from a licensed insurer to guarantee its general contractor's performance "in accordance with Section 255.05, Florida Statutes." The office said it had to assume that contractual provision was valid and binding, so the bond requirement applied through the lease. The cases it cited (Delduca v. U.S. Fidelity & Guarantee Co., City of Ocala v. Continental Casualty Co., and Runyon Enterprises, Inc. v. S.T. Wicole Construction Corp.) describe the statute's remedial purpose and liberal construction.

Common questions

What is Florida's "little Miller Act"?
It is section 255.05, Florida Statutes, modeled on the federal Miller Act. It requires a payment and performance bond on public construction contracts so that suppliers and subcontractors, who cannot lien public property, still have security for payment.

Why did the bond requirement apply to a private hangar?
The office did not decide the abstract statutory question. It relied on the ground lease: section 22.J expressly required the tenant to provide a section 255.05 payment and performance bond, and section 20 made the improvements the airport authority's property. The contract drove the answer.

Was this a formal Attorney General opinion?
No. The office offered informal comments at the request of the airport authority's counsel and based its response on the specific lease documents it was given, assuming the lease provisions were valid and binding.

Who does a payment and performance bond protect?
The payment bond protects subcontractors and suppliers who furnish labor or materials, since they cannot place a lien on public property. The performance bond protects the public owner by guaranteeing the contractor completes the work.

Citations and references

• s. 255.05, Fla. Stat. (public contractors' payment and performance bonds; Florida's "little Miller Act")
• s. 255.05(1)(a), Fla. Stat. (bond required before commencing public construction)
• Federal Miller Act, 40 U.S.C. ss. 3131-3134 (model for s. 255.05)
• Ch. 6867, Laws of Florida (1915) (original enactment)
• Delduca v. U.S. Fidelity & Guarantee Co., 357 F.2d 204 (5th Cir. Fla. 1966)
• City of Ocala v. Continental Casualty Co., 127 So. 326 (Fla. 1930)
• Runyon Enterprises, Inc. v. S.T. Wicole Construction Corporation of Florida, Inc., 677 So. 2d 909 (Fla. 4th DCA 1996)

Source

• Landing page: https://www.myfloridalegal.com/ag-opinions/performance-bond-lessee-of-airport-property
• Original PDF: https://www.myfloridalegal.com/print/pdf/node/8144

Original opinion text

Mr. Kenneth W. Wright

Shutts & Bowen

300 South Orange Avenue

Suite 1000

Orlando, Florida 32801

Dear Mr. Wright:

As counsel for the Orlando Sanford Airport Authority, you have requested this office's assistance in determining whether a private, for-profit party (in this case The Orlando Sanford Airport Southeast Ramp Hangar Development, Inc.), which is occupying public land pursuant to a long term ground lease with the Orlando Sanford Airport Authority, in which the tenant is authorized to contract to construct a private building, is required by section 255.05, Florida Statutes, to obtain a performance and payment bond for such construction. Attorney General Bondi has asked me to respond to your inquiry.

After reviewing the information you have submitted and the terms of the Ground Lease, Number 2003-08 which you have provided,[1] I offer the following informal comments.

Section 255.05(1)(a), Florida Statutes, provides, in part, that

"Any person entering into a formal contract with the state or any county, city, or political subdivision thereof, or other public authority or private entity, for the construction of a public building, for the prosecution and completion of a public work, or for repairs upon a public building or public work shall be required, before commencing the work or before recommencing the work after a default or abandonment, to execute, deliver to the public owner, and record in the public records of the county where the improvement is located, a payment and performance bond with a surety insurer authorized to do business in this state as surety."

This statute relating to public contractors' bonds was patterned after the federal Miller Act [2] and was intended to establish for Florida a little Miller Act whose general aim is to equate suppliers to public projects against which materialmen's liens are not available with those suppliers to private projects enjoying the security of a lien.[3] Florida's little Miller Act, is remedial in nature and thus, is entitled to a liberal construction, within reason, to effect its intended purpose.[4] The statue has existed as a part of the Florida Statutes since 1915.[5]

The answer to your question would appear to be controlled by the terms of Ground Lease Number 2003-08. Several sections appear to be significant, including section 20 relating to improvements and alterations, which provides that:

"All such improvements hereinafter made or placed on the Premises (including any fixtures purchased by Lessee) shall immediately become the property of the Lessor, subject to the terms of the Lease and shall remain upon and be surrendered with the Project as a part thereof at the termination, by lapse of time or otherwise, of the term hereby granted. Lessee shall not enter into any agreement whatsoever, nor do or permit the doing of anything, which would create, constitute or impose any cloud on the title to or lien upon the Land, the Project, or the Premises, or any part of or interest in any of them."

Thus, improvements to the leased property are the property of the Orlando Sanford Airport Authority, a dependent special district and governmental entity. Further, section 22.J. of the Ground Lease specifically requires lessee Orlando Sanford Airport Southeast Ramp Hangar Development, Inc., to provide a payment and performance bond in accordance with section 255.05, Florida Statutes, for any improvements it may make to the property. As that provision states:

"Lessee shall provide a payment and performance bond issued by an insurance company licensed to do business in the State of Florida to guarantee the payment and performance by its general contractor as to construction of any improvements on the Premises in accordance with Section 255.05, Florida Statutes."

This office must assume the validity and binding nature of this contractual provision.

I trust that these informal comments will be of assistance to you in resolving your questions.

Sincerely,

Gerry Hammond

Senior Assistant Attorney General

GH/tsh

[1] In addition, this office has been provided and has reviewed Addenda A - D to Lease No. 2003-08.

[2] See 40 U.S.C.A. ss. 3131 - 3134 (formerly codified as 40 U.S.C.A. 270a - 270d).

[3] Delduca v. U.S. Fidelity & Guarantee Co., 357 F.2d 204, (5th Cir. Fla. 1966), rehearing denied, 362 F.2d 1012 (5th Cir. Fla. 1966). And see City of Ocala v. Continental Casualty Co., 127 So. 326 (Fla. 1930); Collins for Use and Benefit of Dixie Plywood Co. of Tampa v. National Fire Insurance Co. of Hartford, 105 So. 2d 190 (Fla. 2d DCA 1958).

[4] See, e.g., Runyon Enterprises, Inc. v. S.T. Wicole Construction Corporation of Florida, Inc., 677 So. 2d 909 (Fla. 4th DCA 1996).

[5] See s. 1, Ch. 6867, Laws of Florida (1915).