Parties looking to file a Florida mechanics lien must comply with Title 40, Chapter 713, Part I of the Florida Statutes. While Florida lien law (and mechanics lien law in general) can be quite complex, we’ve boiled down the essentials of protecting lien rights in Florida. This post outlines the top five things you should know about these laws to preserve, perfect and enforce your mechanics lien rights (and an extra 6th hint for the road).
1) Notice To Owner is Strictly Required
If you don’t deliver a preliminary notice (known in Florida as a Notice to Owner) soon after first providing labor or materials, you will likely lose your mechanics lien rights.
All parties who did not contract directly with the property owner must serve a Notice to Owner (NTO) within 45 days of furnishing labor and/or materials to the construction project, except for two small exceptions: (1) individual wage-laborers are not required to send a NTO, nor are (2) architects, engineers, or other design professionals.
Property owners may request from their direct contractors (i.e. general contractors) a list of subcontractors and suppliers that are working on the project. If that happens, the contractor must supply within 10 days from the request a list of all subcontractors and suppliers that they have hired.
As to whom must receive the notice, the following rules apply:
- If hired by the general contractor, send the notice to the property owner.
- If hired by a subcontractor, send the notice to the property owner and the general contractor.
- If hired by a sub-subcontractor, send the notice to the property owner, the general contractor and the subcontractor.
If you don’t know who these parties are, don’t fret. Florida’s notice to owner laws allow you to reply on specifically publicly available information.
The Florida Notice to Owner must be sent Certified Mail with Return Receipt Requested. It must also contain a specific warning, and other content, set forth in Florida § 713.06 (2-c).
2) You Must File Your Mechanics Lien Within 90 Days From Last Doing Work (Warranty Work Not Included)
In some states, the lien deadline starts to count from the end of the entire construction project. Florida lien law says otherwise.
Mechanics lien claimants in Florida must record their mechanics lien within 90 days from the last day they provided labor, services or materials to a construction or renovation project. The 90-day period begins to count down when the substantive portion of your work is completed, and you cannot include the correction of deficiencies in work, punch-list work, or warranty work in determining this date. For equipment rental companies specifically, the last date of furnishing is the last date the equipment was actually on site and available to the parties for use.
When recording your Florida mechanics lien, be careful where you are recording. While most counties maintain property records with the Clerk of Court, there are some exceptional counties in which a designated “County Recorder” is responsible for property records. Determine ahead of time where you must file your lien so that you don’t become confused and miss your deadline.
3) Not Everybody in Florida Qualifies For Lien Rights
In most cases, Florida mechanics lien law grants lien rights to contractors, subcontractors, material suppliers, equipment rental companies, laborers and professionals. Florida does not require that you have a written contract to file a mechanics lien, so contracts can be oral, written, express or implied. However, the following parties do not have any rights to file a Florida mechanics lien:
- Sub-sub-subcontractors (those hired by sub-subs)
- Suppliers to suppliers
- suppliers to sub-sub-subcontractors
- Anybody who is required to be licensed in Florida, but who is not
- Maintenance workers (In order to qualify for a mechanics lien in Florida, the work and/or materials provided must permanently improve the property)
4) Exaggerating a Florida Lien Claim is a 3rd Degree Felony
Do not exaggerate your mechanics lien claim. This wrings true in all states, but is especially important in Florida.
While this seems easy enough to avoid, it can sometimes be tough to distinguish between a “mistake” subject to a “good faith argument”, and a willful or negligent exaggeration. Florida does not allow lien claimants to include amounts for unapproved change orders, unperformed work, or similar claims for damage payments within the mechanics lien. Thus, doing so can lead to a fraudulently exaggerated lien. Similarly, lien claimants should not add costs, lien fees, interest, or attorneys fees to their Florida mechanics lien.
There is no reason to include these amounts on the lien claim and face the risk of an exaggerated lien, because these amounts may be recoverable by the prevailing party in litigation. They specifically cannot be added to the lien itself, however, because Florida mechanics lien law only allows lienors to encumber the property for the value of its actual permanent improvement to the property. This rule is typical throughout the country.
5) Know The Deadline to Enforce (Foreclose) Your Lien… and All Exceptions
In Florida, just like everywhere else, mechanic liens are only effective for a specifically defined period of time. Once that time period passes, the lien expires, unless you’ve filed a lawsuit to foreclose upon the property and the lien. The general rule in Florida is that the lien foreclosure action is due within 1 year from the date on which the lien was recorded.
This 1-year foreclosure period can be shortened by the property owner to as little as 60 or 20 days from when the lien is recorded, via the following enforcement deadline exceptions:
- The foreclosure period is reduced to 60 days after the lien is filed if the property owner serves a Notice of Contest of Lien (F.S. 713.22-2).
- The foreclosure period is reduced to 20 days after the lien is filed if the owner or interested party files a lawsuit complaint and the county clerk issues a summons to the lienor (F.S. 713.21-4).
Bonus: Not All Projects Qualify for Lien Rights
Determining that you are a party who qualifies for lien rights (Note 4, above) is important, but it’s not the whole picture. You must also make sure that the project on which you are working is a project for which the correct remedy for non-payment is a mechanics lien. With the proliferation of P3 (public-private projects), a project that might look commercial in nature (and subject to mechanics lien laws), may actually be a public project for which the proper remedy is a bond claim.
Liens cannot attach to public property, so if the project you are working on is a city, county, state, or federal project, mechanics liens are not the appropriate way to secure payment. Since P3 projects can look like both public and private projects, and be subject to either set of rules, it’s important to verify if your project is private or public. This will help you remain in a secured position, and get paid.