Florida Mechanics’ Liens
Florida Mechanics’ Liens
A Short Summary of Florida Mechanics’ Lien Law
In order to have a valid lien a subcontractor or materialman must following these rules:
1. He must send a notice to owner to the owner listed on the notice of commencement within 45 days up his first provision in of services or materials to the site.
2. He must then file a mechanic’s lien in the Public Records within 90 days of his last provision of services or materials to the site.
An owner, in order to be protected against mechanic’s liens and preserve the contract price agreed to with the general contractor, must do the following:
1. The owner must record a notice of commencement in the public records and post a certified copy on the job site so that the names and addresses of the owner, lender and contractor are available to the subcontractor.
2. The owner must pay each subcontractor and materialman who sends a notice to owner directly to see that the subcontractor or materialman gets paid from the funds he would otherwise pay to the contractor. To the extent that he fails to do so, the payment to the contractor is not a proper payment and the contract price protected by the mechanic’s lien law is increased to the extent of those improper payments.
The construction lender must see that the owner meets his requirements and to the extent that the lender distributes draws to the general contractor without complying with 1 and 2 will, the lender can be liable to the owner. The statute doesn’t specifically deal with exculpatory agreements and advance owner authorizations.
If the subcontractor or materialman fails to comply with the statute, then he has no remedy against the owner and must seek to collect for his work under his contract with the general contractor. If he promptly complies with the requirements for a lien then he will likely collect from the draws and if he is not paid he has the right to file a lien, foreclose against the owner, and sell the property on the courthouse steps to collect his lien. The foreclosure should not affect the lender because the mortgage should be and almost always is recorded before the Notice of Commencement. All mechanic’s liens attaching while an NOC is in effect take priority at the time of filing of the NOC. However the lender can be liable to the owner for distributing construction funds that are not proper payments.
If a subcontractor or material man has attempted to assert a lien that the owner or lender believes to be invalid, there are three remedies:
1. A bond can be posted of 125% of the claimed lien amount with the clerk of Circuit Court and the lien will be transferred to that security. The property is then free of the lien and the lienor can proceed against the bond and the general contractor. It’s not clear to me whether after a bond is filed the lienor can name the owner as a defendant and attempt to collect attorney’s fees in excess of the 125%.
2. The owner can file a notice of contest of the lien and server copy on the lien or and the lien nor must file suit within 60 days or the lien expires. Of course, if the lienor does file suit against the owner to enforce the lien then the prevailing party is entitled to collect attorney’s fees from the other party and often the attorney’s fees are more substantial than the lien amount claimed.
3. The owner can simply do nothing and wait to to see if the lienor files a suit or not. If no suit is filed within 12 months of the filing of the claim of lien, then the lien expires automatically.
The contractor must also file his lien within 90 days of his last services to the job. Therefore if he abandons the job for more than 90 days or is given a notice of default after he has provided no services or materials for 90 days, he has probably lost his ability to file a valid mechanic’s lien unless he perjures himself in a claim of lien. The contractor can still sue for money claimed to be owed, but he would not have a lien on the property to hold up disbursements from the lender and wouldn’t have the right to attorneys’ fees unless they are provided for in the contract.
This entry was posted on Saturday, October 17th, 2009 at 12:03 pm and is filed under Articles. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.