What Is a Construction Lien?
A construction or mechanics lien (used interchangeably) is a claim made against a property by a contractor or subcontractor who has not been paid for work done on that property. The liens are designed to protect construction workers from the risk of not getting paid for services rendered. When a construction lien is placed on property, it makes it difficult or impossible to sell or refinance a property because it makes the title on the property unmarketable.
How to File a Construction Lien
In order to file a construction lien, Florida requires two pre-lien notices. The Notice of Commencement is required for contracts of more than $2,500 and should be filed in the clerk’s office containing the information required by statute. Fla. Stat. §713.13. The owner is then required to post on the jobsite either a certified copy of the notice or a notarized statement that the notice of commencement has been filed for recording, along with a copy of the notice.
Another pre-lien notice is a notice to owner, which requires the service of the NTO from all subcontractors and material persons not in direct contract with the owner. Fla. Stat. §713.06. The notice shall set state the claimant’s name, address, a description of the real property sufficient for identification, and the nature of the services or materials furnished. The notice should be served before commencing work or delivering materials, but in no event later than 45 days after commencing to furnish materials or labor. Id. The failure to serve the notice, or to timely serve it, is a complete defense of the enforcement of a lien by any person. Fla. Stat. §713.06(2)(a).
Time Limit and Statute of Limitations
There is a time limit for filing a construction lien. In Florida, lien claimants must file a claim of lien within 90 days of the date work was last performed or materials last furnished to the project. Fla. Stat. §713.08(5). Then a copy of the lien must be served to the owner before recording or within 15 days after recording, and if it is not served, then the lien will be voidable. Fla. Stat. §713.08(4)(c). Subcontractors and material persons not in privity (not directly contracted) with the owner must take extra steps in serving a notice to owner within 45 days of the date its work is first commenced or materials first delivered. Fla. Stat. §713.06(2)(a).
After the pre-lien documents and the claim of lien has been filed, an owner may file a notice of contest of lien, which accelerates the time within which the lien claimant must commence suit, from a statute of limitations of one year to just 60 days. Fla. Stat. §713.22. Florida law gives both lien claimants and property owners the right to demand a sworn statement of account from the other party, and failure to produce that statement within the time frame can trigger penalties including a loss of lien rights. Fla. Stat. §713.16.
Finalizing the Lien
Owners often require lien claimants and potential lien claimants to provide them with lien waivers and releases in return for payment. These waivers remove the lienor’s rights from claiming a lien on the owners property. Fla. Stat. §713.20. The owner can also file a notice of termination, which should be filed after the completion of the project. The notice of termination terminates the notice of commencement previously filed for the project. Fla. Stat. §713.132. And without the notice of commencement, the lienor’s construction lien will simply attach on the date the lien is recorded.
Lien Rights and Claims on Public Projects
A lot of construction work is funded by the government for governmental facilities or public property. So, the Florida legislature has made statutes that don’t allow liens on public property. Fla. Stat. §713.01. Instead, lien claimants must file a claim against a bond. See Fla Stat. §255.05. Bond claimants have cause of action against the contractor and surety for the amount due, including finance charges due under the claimant’s contract.
How to Avoid a Construction Lien
Generally speaking, nobody wants to but put in the position to file a lien or have a lien filed against them. One way to avoid construction liens is to make sure you have a written agreement with the general contractor describing the work to be performed, the materials used, and the subcontractors to be hired. Another measure is to require proof that the subcontractors have been paid before you make your final payment to the general contractor.
To conclude, construction/mechanic’s liens can be very difficult to understand and even more difficult to implement alone. Luckily, our attorneys at RAK Law Firm specialize in lien law and whether you be and owner or a lienor, we will fight for your rights. If you have any questions or concerns arising from construction liens, please do not hesitate to contact us at (407)-437-0319.
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