What is Construction Lien Law?
With the aftermath of Hurricanes and Francis and Jeanne in the not-too-distant past, and in light of recent economic woes in the real estate and construction trades, there have been many questions concerning trade professionals and material suppliers and their ability to enforce liens upon real estate.
One constant in almost all of these matters will be the continuing storm of confusion afforded by the Florida Construction Lien Law, Chapter 713, Florida Statutes, often referred to as a “trap for the unwary”.
There are some basic guidelines to observe in order to avoid the most common pitfalls in connection with legal relationships under Chapter 713.
Contractors, if not in direct privity with owners, must serve their Notice to Owners within forty-five (45) days of first furnishing services or materials to the property.
A Notice to Owner is a document required by Chapter 713 alerting the owner of property to the fact that there are others working on his property apart from the contractor with whom he is in direct privity who may have a claim against his property in the event they are not paid by the general contractor following payment of the general contractor by the owner. Owners need to heed the information in the Notices to Owner when they are received and require their prime or general contractor to provide a Final Payment Affidavit so that as owners they can avoid the risk of having to pay twice. See: Florida Statute §713.06.
If contractors are in direct owner privity, they must include the notice provisions set forth at Florida Statute §713.01(5) in bold face type in their contract.
In order to perfect and preserve a Claim of Lien, the contractor or supplier must record it timely, and in any event, not later than ninety (90) days following the date upon which services or materials were last furnished to the property and must also ensure that the necessary information and warning notice required by Florida Statute §713.08 are included on the lien claim form.
Generally, an action to enforce and foreclose a construction lien must be commenced within one (1) year of recording. However, an owner can shorten this period to sixty (60) days by serving a Notice of Contest. Moreover, an owner can further shorten this period to twenty (20) days by commencing an action under Florida Statute §713.21, requiring a contractor to show cause within that twenty (20) days why their lien should not be enforced by action or vacated and cancelled of record.
Other items that both owners and contractors need be wary of are Demands for Sworn Statements of Account and Demands for Copies of Contracts. You should be wary of the particular time periods involved but also of receiving any of the above-referenced items, either in the mail or by personal service and to contact a legal professional immediately upon receipt of same so as to protect and preserve your rights under the lien law.
The construction lien is a creature of statute, and as such, is generally construed very strictly and a failure to adhere strictly to the requirements of the Statute most often results in the draconian result of either a lien claimant losing his or her lien rights or an owner having to pay twice. In addition to such a penalty, the provisions of Florida Statute §713.29 provide for an award of attorney’s fees to a prevailing party under actions to enforce and foreclose construction liens. This brief review of some of the problems and issues about which one must remain informed in connection with representing a client in connection with dealing with the Construction Lien Law is only meant to be the barest introduction. If in any doubt please contact our offices immediately at 561 748-8000 to obtain a consultation with an experienced attorney familiar with these matters.