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Five Things To Know About Florida’s Mechanic Lien Laws
Posted By Scott Wolfe Jr On January 4, 2012 @ 10:33 am In Construction Finance | 59 Comments
One of the most popular posts on this blog has been an article I wrote in December 2009 titled: 5 Things To Know About The Miller Act. It’s been a long time since we discussed mechanics lien law in Florida, and so I’m inspired to write a top five post about Florida’s mechanics lien laws.
Parties looking to file a mechanics lien in Florida must comply with the statutes housed in Title 40, Chapter 713, Part I of the Florida Statutes, titled the “Construction Lien Law.” Here are the top five things you should know about these laws to preserve, perfect and enforce your mechanics lien rights.
If you don’t deliver a preliminary notice at the start of furnishing labor or materials, you will likely lose your mechanics lien rights in Florida. All parties who did not contract directly with the property owner must serve a Notice to Owner within 45 days of furnishing labor and/or materials to the construction project. There are only two small exceptions to this requirement, as the requirement does not exist for pure individual laborers or for professionals (i.e. architects, engineers, etc.).
The preliminary notice must contain all the information required by the statute (including a statutory WARNING statement), and must be sent to certain parties. Specifically, make sure you send the preliminary notice to those listed in any filed Notice of Commencement, and:
In some states, the lien deadline starts to count from the end of the entire construction project. Not so in Florida. Claimants in Florida must record their mechanics lien within 90 days from last furnishing labor, services or materials to a construction project. The 90 day period starts to count when the substantive portion of your work is completed, and you cannot include the correction of deficiencies in work or warranty work when determining this date. If you are an equipment rental company, 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 mechanics lien, be careful where you are recording. While most counties maintain county property records with the Clerk of Court for the Florida county, there are some exceptional counties where the property records function is delegated to an designated “County Recorder.”
Generally speaking, contractors, subcontractors, material suppliers, equipment rental companies, laborers and professionals have lien rights in Florida. 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 do not have any rights to file a Florida mechanics lien:
This one really applies nationwide, and not just in Florida. However, it’s particularly important in Florida, because filing a mechanics lien considered “fraudulent” is a 3rd degree felony. The tough part is distinguishing between a “mistake” or something subject to a “good faith argument” versus an actual willful or negligent exaggeration.
Florida does not allow lien claimants to include amounts within the mechanics lien for unapproved change orders, claims and lost profits on unperformed work, and other similar legally theoretical claims for damage payments. Similarly, lien claimants should not add costs or lien fees, interest or attorney fees to their Florida mechanics lien.
While all of these amounts may be recoverable in litigation, they cannot be added to lien itself, as the mechanics lien law in Florida only allows lienors to encumber the property for the value of its actual permanent improvement to the property. This is a typical rule all across the country, as we discussed previously in this post: What Costs Can I Include In A Mechanics Lien?
In Florida, as elsewhere, mechanic liens are only effective for a defined period of time. Once that time period is up, the lien expires as a matter of law unless you file 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 lien’s recording.
However, the 1 year foreclosure period can be shortened to as little as 60 or 20 days. It’s important to know these two exceptions:
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