Is This Construction Contract’s Venue Provision Enforceable?

Is this construction contract’s venue provision enforceable?

It is important to review your venue provisions in your construction contracts to make sure they are enforceable.  Pursuant to section 47.025, Florida Statutes, “[a]ny venue provision in a contract for improvement to real property which requires legal action involving a resident contractor, subcontractor, sub-subcontractor, or materialman, . . .to be brought outside [of Florida] is void.”  Where the provision is void, venue shall be brought where the property is located, where the defendant resides, or where the cause of action accrues.

So here is what the statutes says:

  • If one party to a construction contract is a resident of Florida; and
  • If the construction contract has a venue provision outside of Florida;
  • Then that provision is void.

Does it matter if the contract also has a choice of law provision – applying the law of another state?

No.  In Kerr Construction, Inc. v. Peters Contracting, Inc., 767 So. 2d 610 (Fla. 5th DCA 2000), the Fifth District Court of Appeal held that section 47.025 is procedural and not substantive.  When a law is procedural the court applies the law of the forum rather than the law selected by the parties.  Therefore, for purposes of applying section 47.025, it is irrelevant as to whether the parties have a choice of law provision in their construction contract.  So, if a Florida resident contractor enters into a Florida construction project, and there is a provision in the contract which applies the law of a different state and requires venue in another state, that provision is void and litigation can proceed in Florida.


Construction Lien Transferred to Bond Venue

In Kelsey Construction, Inc. V. Travelers Casualty and Surety Company of America, 120 So. 3d 77 (Fla. 4th DCA 2013), the Fourth District held that where a subcontractor’s claim of lien was transferred to a bond, pursuant to section 713.24, the proper venue for such dispute is the county where the claim of lien was recorded.
Attaway Electric recorded two liens against two Winn-Dixie projects in Broward County. The general contractor, Kelsey, transferred the liens to bonds, pursuant to section 713.24, Florida Statutes. Attaway sued Kelsey for breaches of the contracts, and sued Kelsey and Travelers on the lien transfer bonds. Kelsey and Travelers moved to transfer venue to Orange County in accordance with the contracts’ forum selection provisions. The trial court transferred the case to Orange County.
On appeal, the Fourth District reversed holding that section 713.24 requires that “[a]ny party having an interest in such security or the property from which the lien was transferred may at any time, and any number of times, file a complaint in chancery in the circuit court of the county where such security is deposited.” The statute prevailed over the contractual venue provision. Accordingly, the Fourth District vacated the order transferring the action to Orange County.