Breaking Down The Mechanics Of Construction Liens
Lien law is complex and comprehensive. If you want to file a construction lien, formally known as a mechanic’s lien, you must comply with Chapter 713, Part I of the Florida Statutes. Our attorneys at Cantwell & Goldman have extensive knowledge of construction lien law and can assist you throughout the process.
Step 1- Notice of Commencement
A Notice of Commencement advises those persons that have furnished labor and/or material to improve a property as to who they are required to give notice to in order to make sure they get paid. The Notice of Commencement is a document which contains the following information:
- The intent to begin improvements;
- The location of the property;
- Description of the work;
- The amount of the bond (if any); and
- The name of the property owner, contractor, surety, lender and other pertinent information.
The property owner or property owner’s agent must post the Notice of Commencement on the job site and record it in the public records of the county where the property is located. It is important to note that failure to record a Notice of Commencement or incorrect information on the Notice of Commencement could cause a property owner having to pay twice for the same work and/or materials.
As a practical tip, an owner should require a contractor to furnish releases of lien from all persons that serve a Notice to Owner. Requiring the general contractor to furnish releases of lien to the owner will prevent those persons from placing liens on the owner’s property because of non-payment by the general contractor.
For each request for payment, the contractor should be required to issue a sworn certification to the property owner which includes the following:
- No known construction, supplier, subcontractor or material men’s liens are outstanding as of the date of the request;
- That all due and payable bills have been paid to date or are included in the current application; and,
- Except, for such bills not paid, there is no known basis for the filing of any liens on the work.
A sworn certification to the property owner should be included in each request for payment submitted by a contractor. This certification will provide assurance to the owner that potential lienors have been paid through the date of the draw.
The Notice of Commencement is effective for one (1) year after it is recorded unless otherwise provided in the Notice of Commencement.
Step 2 – Notice to Owner
All parties who did not contract directly with the property owner must serve a Notice to Owner within forty-five (45) days of furnishing labor and/or materials to the construction project. Failure to provide a Notice to Owner will preclude the lienor from placing a lien on the owner’s property.
The Notice to Owner must include the following:
- The lienor’s name and address;
- A description of the real property;
- The nature of the services or materials being furnished; and a
- Statutory WARNING statement.
A lienor must make sure to send the Notice to Owner to those parties listed in the Notice of Commencement.
Step 3- Construction Lien
Liens filed on private property are known as construction liens. It is a method used by those employed for the purpose of improving property to ensure that property owners will pay them for services performed or materials delivered. If the property owner does not pay for the services and/or materials, the lienor can initiate a court proceeding to force a sale of the property to pay for the services and/or materials. Liens may be filed against any type of private property, whether residential or commercial.
Do I Qualify To File A Construction Lien?
Florida does not require that you have a written contract to enforce a construction lien. Contracts between the parties can be oral, written, express or implied. We strongly recommend, however, that all contracts be in writing. In order to qualify for a construction lien in Florida, the work and/or materials provided must permanently improve the property.
The following parties generally have the right to file a construction lien:
- Material suppliers
- Professionals-architect, landscape architect, interior designer, engineer, or surveyor
Does My Project Qualify For A Lien Claim?
Knowing that you are a party who has lien rights is necessary but you also have to make sure your project qualifies for a lien claim. Liens cannot attach to public property, so if the project you are working on is a public project, construction liens are not the proper way to secure payment. The proper remedy in such a case is a bond claim. If you have questions regarding your project, a construction lawyer can assist you in determining whether your project qualifies for a lien claim.
When Do I File A Construction Lien?
You must record a construction lien within ninety (90) days from the day you last finished labor, materials, or services to a construction project. Be aware, you cannot include the correction of deficiencies in work or warranty work in determining this end-date.
Where Do I File A Construction Lien?
Most counties, like Brevard County, require that you file a construction lien with the Clerk of Court, however there are some unique counties where the property records function is delegated to a “County Recorder,” or other designated official. If you misfile your construction lien claim, you could miss your deadline to file your lien thereby invalidating your construction lien.
Steps To File A Construction Lien
- File your claim of lien within ninety (90) days of the last work performed on the construction project.
- A copy of the Claim of Lien must be served on the owner of the property within fifteen (15) days from the date it is recorded.
- A lienor must file a lawsuit to foreclose the Claim of Lien within one (1) year from the date it is recorded unless the owner serves a “Notice of Contest of Lien” on the lienor.
- A “Notice of Contest of Lien” shortens the statute of limitations to file a lawsuit to sixty (60) days after it is recorded.
- If a lienor fails to file a lawsuit within one (1) year of filing a Claim of Lien (or sixty (60) days from recording by the property owner of a Notice of Contest of Lien), the Claim of Lien is subject to dismissal.
- A lienor is prohibited from waiving its right to file a lien in advance of performing the work or furnishing materials to improve real property.
Why Do I Need An Attorney?
Lien Law is complex and requires careful consideration when pursuing enforcement of a lien and paying those that furnish labor and materials to improve real property. The construction lawyers (link to Wes & Bill page) at Cantwell & Goldman can assist you through the procedural requirements and the strict deadlines for filing a construction lien, help you draft the required documents, and if someone has already filed a construction lien on your property, our attorneys will help you protect your legal rights. Contact us online, or call 866-583-9129.