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Five Things To Know About Florida’s Mechanic Lien Laws (Plus 1 Extra)
Posted By Nate Budde On November 24, 2014 @ 10:33 am In Construction Finance | 61 Comments
Parties looking to file a mechanics lien in Florida must comply with Florida mechanics lien law, which can be found in Title 40, Chapter 713, Part I of the Florida Statutes. While lien law can be very complex, 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).
If you don’t deliver a preliminary notice soon after 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, except for two small exceptions. This preliminary notice requirement does not exist for pure individual wage-laborers or for architects, engineers, and other professionals.
The preliminary notice must contain all the information required by the statute, and must be sent to certain parties. Specifically, you must make sure to send the preliminary notice to those listed in any filed Notice of Commencement, and:
Also, besides sending the preliminary notice in the proper time period and to the proper parties, it must have the proper content. All preliminary notices must contain a specific statutory WARNING statement.
In some states, the lien deadline starts to count from the end of the entire construction project. This is not the case in Florida. Mechanics lien claimants in Florida must record their mechanics lien within 90 days from their own last furnishing of 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, 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.
Also, when recording your mechanics lien, be careful where you are recording. While most counties maintain county property records with the Clerk of Court , there are some exceptional counties where the property records function is delegated to a designated “County Recorder.” If there is confusion as to where your mechanics lien is to be filed, it could result in your missing the deadline to file, and invalidating your lien.
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 tip is not solely applicable to Florida, but it’s particularly important in Florida because filing a “fraudulent” mechanics lien is a 3rd degree felony in that state. While this seems easy enough to avoid, it can sometimes be tough to distinguish between a “mistake” or something subject to a “good faith argument” on one hand, and an actual willful or negligent exaggeration on the other.
Because Florida does not allow lien claimants to include amounts for unapproved change orders, amounts or lost profits for unperformed work, and other similar legally theoretical claims for damage payments within the mechanics lien, doing so can lead to a fraudulently exaggerated lien. Similarly, lien claimants should not add costs, lien fees, interest, or attorney 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 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, and was discussed previously in the post: What Costs Can I Include In A Mechanics Lien?
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 as a matter of law unless you have 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.
However, this 1 year foreclosure period can be shortened by the property owner to as little as 60 or 20 days via the following enforcement deadline e exceptions:
Determining that you are a party who qualifies for lien rights (Note 4, above) is important, it’s not the whole answer. 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 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 public 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 depending on the particular project and contract at issue, it’s important to make sure whether your project is private or public. This will help you remain in a secured position, and get paid.
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