We recently received a call from a distressed homeowner in south Florida who was being threatened with a lien on her home. The homeowner was concerned because the work was not completed properly, she was uncertain as to whether the contractor’s sub-contractors and material suppliers had been paid and did not want to have to pay twice for shoddy work.
The below summary is not an all inclusive discussion of Florida’s construction lien laws, but does include the basic provisions.
Florida law provides that a contractor, subcontractor or material supplier (“lienor”) who provides labor, work, or materials for the improvement of private real property located within Florida has a lien on that property for the value of the materials, labor, or work provided. Florida Statutes § 713.02 and § 713.06.
Laborers and lienors in privity of contract with the owner – having a “one on one” direct contractual relationship with the Owner – have a fairly direct route to a lien. The owner obviously is aware of the contractual relationship with the claimant since they have a contract. Assuming the contract includes the required warning language required by Florida Statutes § 713.015, that satisfies the statutory notice requirement. At this point, the claimant usually has a valid contract and is in a position to start providing materials or services on the job site.
All claimants – whether laborers or those in privity of contract with the owner or not – must file a claim of lien in a timely fashion in order to protect their lien rights. See Florida Statutes § 713.08(1) and Form FL-03201 – Claim of Lien. Also, any lienor, except a laborer or materialman who has a direct contractual relationship with the owner, must furnish an affidavit like the one required of contractors under Florida Statutes § 713.06(3). See Florida Statutes § 713.05 and Forms FL-3200 “Contractor’s Final Payment Affidavit and FL-03237 “Final Payment Affidavit – One Other than Contractor”.
A lienor who is not in contractual “privity” (a direct contractual relationship) with the owner must satisfy several requirements before perfecting its right to a construction lien. First, the lienor must serve the owner with a “Notice to Owner.” See Florida Statutes § 713.06(2)(c) and Form FL-03198 . The purpose of the notice to owner is to alert the owner to the lienor’s presence on the job so that the owner can protect himself from the risk of paying over to the contractor monies which ought to go to an unpaid potential lienor who has previously provided work, labor, and/or materials. The owner can eliminate the possibility of paying twice for lienor’s work by requiring a lien waiver (partial or final) ensuring that the money paid the contractor ends up paid to the lienor providing notice. The lienor must serve a notice to owner within the earlier of (1) 45 days of first materials delivered to the project or work performed on the project or (2) before final payment is made by the owner in reliance on the final contractor’s affidavit. See Florida Statutes § 713.06(2)(a) and Form FL-03200. The notice to owner and other required notices under the Florida Construction Lien Law must either be served certified or registered mail return receipt requested or by actual delivery to the person to be served. Fla. Stat. §713.18.
The notice to owner must be sent in the form provided by §713.06(2)(c). A deviation from the statutory form may result in loss of the lienor’s rights. The Owner must be served even if the Owner is in fact aware that the lienor is on the job and providing services and/or materials. If the lienor is not in privity with the general contractor, it must also serve the contractor with the Notice to Owner. See Florida Statutes § 713.06(2)(a). The notice to owner should also be served on any lender identified in the notice of commencement because the lender may be obligated to seek lien waivers from lienors as progress payments are made.
A lienor who fails to recover a timely payment and who has complied with its notice to owner requirements may lien the owner’s property to obtain payment. To do so, the lienor must record a claim of lien in the public records of the county where the property is located within 90 days of the final furnishing of materials, labor, or work or at any time during performance. Florida Statutes § 713.08(5).
The claim of lien must also be in substantially the same form as that provided in §713.08(3). To record the claim of lien, the lien must be prepared, signed and notarized by the lienor and then taken to the clerk of court in the county where the property is located. There it will be recorded in the public records for a nominal fee. Florida Statutes § 713.08(5).
Following recording, the claim of lien should be promptly served by certified mail, return receipt requested, on all of the applicable parties listed in the notice of commencement. If not timely served, “to the extent that the failure or delay is shown to have been prejudicial to any person entitled to rely on the service,” the lien may be void. Florida Statutes §713.08(4)(c). The filing of the claim of lien is not conditioned on the owner filing a Notice of Commencement. Even if the owner fails to file the Notice of Commencement, the lien must be served on the owner at any all available addresses. Florida States § 713.08(4)(c).
After the lien has been recorded, the lienor must commence a court action to foreclose the lien and recover for the work performed within one year from the date the lien is recorded. Florida Statutes § 713.22. The statutory scheme and interplay between F.S. §§713.21 and 713.22 allows an owner to choose a procedure to force a lienor to take action. F.S. §713.21(4) allows the owner or other party of interest to file a complaint and the lienor is required file an action to foreclose a claim of lien or, in the alternative, show cause why the lien should not be discharged within 20 days. F.S. §713.22(2) permits an owner to shorten the one-year period in subsection (1) of the statute down to a period of 60 days by recording a “Notice of Contest of lien” in the clerk’s office. By contesting the lien, the owner forces the lienor to file the action to enforce the lien. See Form FL-03202.
The Florida Statutes provide specific authorization for requests for copies of contracts and statements of account of the owner or any lienor upon written demand of an owner or lienor contracting with or employing the other party to such contract. Florida Statutes § 713.16(1). See forms Fl-03223 and FL-03224.
Also, the owner may demand in writing a sworn written statement of account showing the nature of the labor or services performed, or to be performed, or materials to be provided, or to be provided, details as to the amount paid, the amount due and the amount to become due as of the statement of the lienor. Florida Statutes § 713.16(2). See Forms FL-03207 and FL-03208.
As you can see from the above, Florida lien law can be very particular and confusing to those who have not worked with it frequently. Our law firm has over forty years of experience working with owners, contractors, sub-contractors and materialmen both in perfecting lien rights and in protecting homeowners whose property is the subject of a lien issue. Please give us a call for a free consultation to see if we can assist you.