It’s that time of the year again. With all the holiday parties, treats and goodies, it’s hard to stay focused on getting or staying lean. Don’t fret, this article is about avoiding construction liens and how to deal with them (a/k/a “mechanics lien”).
What is a construction lien?
Under Florida law, those who provide services or materials for the improvement of your property, and are not paid-in-full, may enforce a claim for payment against your property for the value of the services or material provided, by recording a construction lien. The amount of the lien is limited to the value of the services provided pursuant to the lienor’s contract minus amounts already paid.
Who can place a construction lien on my property?
Any contractor, subcontractor, sub-subcontractor, laborer, materialman or professional (architect, landscape architect, interior designer, engineer, surveyor or mapper) (“lienor”) whether in a direct contract with you or not, can record a claim of lien. A lienor who doesn’t have a direct contractual relationship with you, must satisfy several requirements before perfecting its right to lien your property. First, the lienor must serve you with a “Notice to Owner”. The purpose of this document is to notify you that a lienor, whether it’s a company you hired directly or not, is providing construction services or materials to your property. The Notice to Owner must be sent in the form provided by Section 713.06(2)(c) Florida Statutes, and must include certain language, including the following:
Under Florida’s laws, those who work on your property or provide materials and are not paid have a right to enforce their claim for payment against your property. This claim is known as a construction lien.
If your contractor fails to pay subcontractors or material suppliers or neglects to make other legally required payments, the people who are owed money may look to your property for payment, EVEN IF YOU HAVE PAID YOUR CONTRACTOR IN FULL.
This language means even if you paid your contractor in full, a lienor that timely serves you with a Notice to Owner and doesn’t get paid in full by your contractor, can record a construction lien on your property. Ultimately, you may be forced to pay twice to release the lien.
What can happen if a construction lien is placed on my property?
A construction lien is valid for one year after it is recorded in the official records of the county where your property is located. The lienor must commence an action to foreclose the lien within one year or the lien is not enforceable.
If Florida’s lien laws are properly complied with and an action to foreclose the lien is timely filed, the lienor may be able to force the sale of your property. Additionally, a lien can interfere and delay the sale of your home. You will not be able to close on a sale until the lien is released or bonded off.
Is there a way to avoid having a lien remain on my property?
You can protect your property from liens by securing a bond prior to beginning construction. The bond, instead of your property, serves as security for the payment of a potential lienor. Alternatively, you can also transfer liens to bonds after a lien is recorded.
What can I do to protect myself from liens?
- Request from your contractor, a list of all lienors who are performing services or furnishing materials for improvements on your property.
- Keep track of these lienors and make sure you receive a lien release or waiver as payment is made.
- Before making the final payment to your contractor, request an affidavit that specifies all unpaid parties.
- Make sure these parties are paid and sign waivers or releases before making final payment.
- At any point before a lienor files a claim of lien, you may request a sworn statement regarding unpaid services or materials. The lienor has 30 days to respond to this request.
Whose Responsibility is it to obtain these waivers and releases?
In short, it depends. Your contractor may be responsible for obtaining waivers and releases if that is part of your contract. If it is not a part of your contract, you are responsible for obtaining these waivers and releases. If you pay your contractor through a series of draws, make sure you receive waivers or releases from each company you have a direct contract with or have received a Notice to Owner from, as payments are made.
If you have a construction loan, the lender may handle this for you. Bottom line, it is your house, make sure all lienors are paid and provide waivers or releases. The moral of the story is, always require a release or waiver of lien from anyone performing services or supplying materials for improvements to your property.
If a construction lien is recorded on your property, contact an experienced attorney who can check the validity of the lien and advise you about any available defenses.
ABOUT THE AUTHOR
Lenore Brakefield, partner at Woodward, Pires & Lombardo (www.wpl-legal.com ), P.A., graduated cum laude from the University of Florida Levin College of Law and has practiced law for more than 14 years. She specializes in civil and commercial litigation and is experienced in construction litigation matters. She also handles local government and transactional matters. She grew up in Naples, Florida, and enjoys roller skating and watching college football.
In 1971, Arthur V. Woodward founded the first law firm on Marco Island which emphasized the importance of a superior work ethic, collegiality and respect among our peers, and a social conscience that commands participation in opportunities for the good of the public. These guiding principles formed the tradition of excellence that the attorneys at Woodward, Pires, & Lombardo, P.A. work hard to uphold today.
At Woodward, Pires, & Lombardo, P.A., our attorneys have lived and worked in Southwest Florida for decades and possess a vast knowledge of the law and a first-hand understanding of how the law intersects with the lives of those in our community. Our attorneys have the responsibility and obligation to use their training as advisers, counselors, and strategists for the betterment of our community.
At Woodward, Pires, & Lombardo, P.A., our attorneys employ a commonsense approach to the practice of law working efficiently and effectively as a team versed in many practice areas to best serve our clients. We look forward to serving you and providing you with quality, effective, and efficient legal representation.