How many contractors have thought that, if the owners don't pay you, you can just record a claim of lien against their property? The construction lien law is not that simple. The lien law has been in Florida for over 100 years. A construction lien is a claim made against a particular piece of real property in order to secure an amount due for improvement of that property. A construction lien used to be called a mechanic's lien but some people thought that a mechanic's lien was something a mechanic obtained for working on an automobile. Therefore, effective in 1991, the legislature changed the name of a mechanic's lien to construction lien.
When one furnishes labor, services, or materials for the improvement of real property, the labor, services, and materials are incorporated into the improvement and become part of the real property. The contractor or supplier cannot retrieve the labor, services, or materials from the project if he is not paid. Therefore, the rationale behind a construction lien is to protect the contractor or supplier by granting him a secured debt in the real property. A construction lien is a unique remedy and, therefore, a contractor or supplier should closely follow the procedures required to preserve their lien rights. On the other hand, the construction lien law also offers owners a method to protect themselves from having to pay twice.
In order to have construction lien rights, you must have a written or verbal contract to furnish labor, services, and/or materials for the improvement of real property. The following people and/or entities are designated as having lien rights under the Florida construction lien law: laborers, materialmen, contractors, subcontractors, sub-subcontractors, subdivision improvers, and professional lienors (i.e., architect, engineer, etc.).
When dealing directly with the owner, i.e. having a direct contract with the owner, there is no need to serve a Notice to Owner. However, you must make certain that the person you are dealing with is the record title owner and you must record your Claim of Lien within 90 days of the last day on which you furnished labor, services, or materials. Once you record the Claim of Lien, you must serve a copy of the Claim of Lien on the owner within 15 days of recording it. In addition, you must serve a Contractor's Final Payment Affidavit on the owner at least 5 days before filing suit.
When you are dealing with a contractor, subcontractor, or sub-subcontractor, i.e., you have no direct contract with the owner, you must serve a Notice to Owner on the owner either before you begin furnishing labor, services, or materials or within 45 days of the first day on which you furnish labor, services, or materials. If you need to serve a Notice to Owner, please contact the following:
NTO Management, Inc.
Also, you must record your Claim of Lien within 90 days of the last day on which you furnished labor, services, or materials. Then you must serve a copy of the Claim of Lien on the owner within 15 days of recording the same.
If you are a laborer, i.e., a person who furnishes labor or services for the improvement of real property and who does not furnish materials, labor, or services of others, regardless of your relation to the owner, you must simply record a Claim of Lien within 90 days of the last day of furnishing labor. Then you must serve a copy of the Claim of Lien on the owner within 15 days of recording your Claim of Lien.
A Claim of Lien will stay in effect for 1 year from the date of recording unless one of the following happens:
The owners can bond off the lien by obtaining a bond or posting cash with the Clerk of the Court. The amount the owners would have to post is:
Under Florida lien law, it is often difficult for the Court to determine who the prevailing party is. If the lienor wins something less than the amount demanded, the lienor may still feel that it is the prevailing party but the owners may also feel that they have prevailed by virtue of reducing the amount demanded. Typically, settlement negotiations are inadmissible in Court but, due to the difficulty in determining which party is the prevailing party, the Court may consider written pre-litigation settlement offers. By way of example only, if you offer to settle for $10,000.00 and the owners rejected the same but you ultimately obtained a Judgment for an amount more than $10,000.00, the Court will likely consider you to be the prevailing party and the owners will be liable for your fees.
Once you record a Claim of Lien, typically, your options are:
The Construction Lien law creates unique remedies for both the construction industry and the real property owners. Therefore, the procedures required to protect your rights should be closely followed. If you would like to learn more about the construction lien laws or if you need any of the forms mentioned herein, please contact us at email@example.com or, to read the instructions and start the process, click here.