At the core of smoothly running and successfully operating a construction business is the guarantee that payments will be made in a timely manner for materials supplied and work completed. Unfortunately, recovering payments can sometimes be the most challenging aspect of business operations. If a property owner fails to abide by the contract, you may be able to seek a financial remedy with the assistance of an experienced Florida construction lien attorney.
What is a Construction Lien in Florida?
A material supplier, subcontractor, general contractor, laborer, or professional services provider supplying labor, materials, or professional services to a construction project has the right to impose a lien on the real property receiving the materials and labor pursuant to Florida Statute Chapter 713.
Under Florida law a person or entity seeking to impose a lien on real property must adhere to statutory notice requirements in order to properly preserve a lien claim. These statutory requirements are technical and unforgiving, and the law allows for the prevailing party in such a claim to recover attorney fees and costs against the non-prevailing party.
This means a party seeking to foreclose a construction lien must be sure that each step of the process has been properly completed and all appropriate notices have been given within the prescribed time frames.
Notice of Commencement
A Notice of Commencement is a form notice filed with the county clerk by the owner before the project commences. A Notice of Commencement identifies the owner and contractor and gives notice of the legal description of the property subject to the construction project and identifies where Notices relevant to construction lien should be served on the owner and contractor.
A certified copy of the Notice of Commencement must be posted at the project, or the parties must post an affidavit indicating that the Notice of Commencement has been filed with the clerk. The Notice of Commencement must be in the form provided by statute. Florida Notice of Commencement Form.
Persons or entities intending to impose a lien on real property are required to be in privity with the owner, or within 45 days of the first provision of material or labor at the project, provide a Notice to Owner at the address provided in the Notice of Commencement and provide a copy of the NTO to the contractor listed on the Notice of Commencement.
Notice to Owner
A Notice to Owner is a statutory notice which gives the owner of property notice that a person or entity is providing materials or performing service at the owner’s property. For Subcontractors not in privity of contract with the owner, a Notice to Owner is a vital step in securing the right to impose a Claim of Lien on real property.
The Notice to Owner, “must be served before commencing, or not later than 45 days after commencing, to furnish his or her labor, services, or materials, but, in any event, before the date of the owner’s disbursement of the final payment after the contractor has furnished the affidavit under subparagraph (3)(d)1.” Fla. Stat. §713.06(2)(a).
A Notice to Owner must be properly served or the subcontractor or materialman’s Claim of Lien will fail, and the Owner may recover attorney’s fees against the person or entity imposing the defective lien.
A Notice to Owner is a statutory form and must be in a specific format, including the warnings in CAPS. Florida Notice to Owner.
Claim of Lien
A claim of lien is an encumbrance on the title to real property and indicates that a lienor has the right to foreclose on the real property and force sale to satisfy a lien for improvements. A claim of lien is the last step prior to filing of a lawsuit to foreclose on real property.
The Claim of Lien must be filed within 90 days of the last work at the project and is not valid if the lienor does not have a contract with the owner or did not timely file a Notice to Owner.
A claim of lien must include certain statutory items, including the total amount of the contract, and the total amount still owed to the lienor. The Claim of Lien must be served as a warning against clouding the title.
*warning against clouding title
|Notice of Commencement||Filed by Owner||Must be prior to beginning work|
|Notice to Owner||Served on Owner and Contractor by lienors who are not in contract with the owner.||Must be served within 45 days of first provision of labor or materials at the project and in no event after the owner makes a proper payment under Fla. Stat. 713.06(3)(d)1.|
|Claim of Lien||Filed with the clerk/comptroller by person or entity seeking to impose a lien on real property. This is a cloud on title.||Must be filed within 90 days of last work at the project.|
|Lien Foreclosure Lawsuit||Filed by the lienor to force sale of the real property which received the labor or materials forming the basis for the lien.||Must be filed within 1 year of filing of Claim of Lien, OR within 60 days if Owner has served a Notice of Lien Contest.|
Can a tenant obligate the owner/landlord to pay for a labor or materials lien?
In some cases, yes. The most effective way for a landlord/owner to avoid liability for the tenant’s improvements is to include a provision in the commercial lease which prevents the tenant from allowing a lien to be placed on the property AND record a memorandum of lease in the public records which puts the world and any contractor or material supplier on notice that the tenant does not have authority to allow a lien on the owner/landlord’s real property.
Florida law states under Statute 713.10(2)(b) that:
The interest of the lessor is not subject to liens for improvements made by the lessee when:
1. The lease, or a short form or a memorandum of the lease that contains the specific language in the lease prohibiting such liability, is recorded in the official records of the county where the premises are located before the recording of a notice of commencement for improvements to the premises and the terms of the lease expressly prohibit such liability; or
2. The terms of the lease expressly prohibit such liability, and a notice advising that leases for the rental of premises on a parcel of land prohibit such liability has been recorded in the official records of the county in which the parcel of land is located before the recording of a notice of commencement for improvements to the premises, and the notice includes the following:
a. The name of the lessor.
b. The legal description of the parcel of land to which the notice applies.
c. The specific language contained in the various leases prohibiting such liability.
d. A statement that all or a majority of the leases entered into for premises on the parcel of land expressly prohibit such liability.
Notice of Lien Contest
An owner can accelerate the time period for a lienor to file suit to foreclose a construction lien by filing with the clerk of court a notice under Fla. Stat. 713.22 a Notice of Lien Contest in following a specific format. Florida Notice of Lien Contest Form.
This notice puts the lienor on notice that it must file suit within sixty days, or the Claim of Lien will be automatically extinguished and the lienor’s right to foreclose will be lost.
At the Law Office of Michael L. Dear, we represent a diverse clientele, such as general contractors, suppliers and subcontractors, in a variety of matters related to construction law. We help expedite liens for the value of work that you have completed, enforce liens and pursue compensation through litigation, judicial sale or foreclosure—whichever may be the best option in your situation. We work diligently to safeguard your rights and interests.
Contact our law office today at 407-494-6105 to discuss your case with our seasoned Orlando construction lien lawyer. Alternatively, you may send us a message about your case using our online contact form.