In the field of construction, liens are commonly placed against private property and some forms of public property (i.e. airlines, car rental agencies) most commonly when improvements are made to an estate during the construction process. Lien law is a complex field. To understand the intricacies of lien law, how to make a claim, and how to employ liens to your advantage, you should rely on an experienced construction law attorney in Gainesville, FL.
Florida Lien Law | Lien Rights & Responsibilities
A lien may be placed on real property to ensure that a debt that is owed is paid. It is an accessible public record that demonstrates that a piece of property has unpaid debt. The claim not only protects owners (and other contributing professionals) who provide materials and services to a developing project, but it ensures that the debt established from the improvements of a property is secured and paid. In most cases, a piece of land or property cannot be sold until the lien is taken care of. In other words, the debt must be paid in order for the project to move forward. Construction attorneys at Warner, Sechrest & Butts can guide you through the loops of Florida lien law.
Placing claims of liens against property holds numerous benefits. The biggest advantage is the sense of security that owners and/or other professionals gain. A lien against a piece of property becomes public record, which often adds embarrassment and lessens credibility for professionals who fail to properly pay the contributors on their project team. A lien is a good source of pressure on such individuals to pay what they owe because they are often accompanied with the potential threat of foreclosure. In some cases, placing a lien against a real estate can result in attorney fees being covered by the professional that the lien is placed against.
Almost anyone who legitimately contributes to a project and does not receive proper compensation can be a protected liener. In most cases, the following types of people file lien claims:
Construction Professionals: Construction professionals include any and all certified and licensed individuals who are in a direct contract agreement with the owner of the estate. These may include engineers, designers, architects, landscape architects and other types of professionals.
Laborers: Laborers, of all kinds, are eligible to file a lien claim so long as they provide manual and/or physical labor to develop a project. These may include carpenters and construction workers. It does not matter where the laborer may fall in the construction hierarchy.
Contractors & Subcontractors: Both contractors and subcontractors have lien rights because they typically are in a direct contract agreement with the owner of the estate. If the improvement of the project is less than 2,500 thousand dollars however, a subcontractor may be ineligible to file a legitimate lien claim.
Suppliers: Material suppliers provide the resources and ingredients to contractors and subcontractors. They are entitled to lien protection.
There are many different types of professionals and roles that make the development of any project/estate possible. If you are unsure if you have protected lien rights, allow construction lawyers at Warner, Sechrest & Butts to help you determine which category you fall under and how to utilize a lien your advantage.
Perfecting Lien Rights
Lien rights must be employed properly to be considered legitimate. Lien claims must be executed within an efficient and timely manner. Because there are so many contributors to a construction project, and because many of these professionals do not hold direct contracts with the owner of the real estate, a Notice to Owner must be filed within 45 days of the original commencement. This document informs the owner of the estate that if compensation for services and materials provided for the improvement of the real property is not distributed, then claims against the property from non-contractors will be established.
Within 90 days of the last day of performed services, lienors are also required to file a public Claim of Lien. This document notifies the owner that a debt has not been paid. It also informs potential buyers that the property may be subject to foreclosure. A Claim of Lien may only allow amendments during the 90 day period.
It is best to contact a Gainesville attorney for assistance with this process. Failure to provide a Notice to Owner and a Claim of Lien according to Florida lien laws and within the proper time constraints may result in an illegitimate claim.
Foreclosing Claims of Lien
A Claim of Lien is valid for up to one year. This indicates that if lienors wish to file suit to foreclose an existing property, it must be done so before the claim expires. There are strict requirements placed on lienors to foreclose an estate property.
- Lienors must prove that they provided legitimate goods and services.
- Lienors must prove that their supplies and services did not receive compensation or any other form of payment from the owner.
- Lienors must prove that all of the prerequisites and requirements order by Florida lien law have been adhered to.
- Professionals who have a direct contract with the owner (i.e. contractors, subcontractors) are required by law to serve a Contractor’s Final Affidavit to the owner roughly five days before the suit.
If these requirements are not followed, a lienor will be legally unable to file a suit for foreclosure.
Waivers & Releases
Due to unique circumstances, lienors can waive their unsecured debts on a real estate. This means that the lienor must sign a document that waives or releases his/her full or partial lien rights to a piece of property. A lienor may not waive his/her lien rights before supplies and services are provided. Lienors should note that such waivers and releases may result in the inability to foreclose an estate and receive compensation for one’s supplies and services. As such, we strongly recommend that you contact one of our construction law attorneys in Gainesville, FL before making this crucial decision.
Lien Transfer Bond
It is possible to file a Transfer Claim of Lien to Bond by a person who has interest in a piece of property that has a lien. The lien may be transferred as a bond or cash payment as a form of security. Within a 60 day period, a person seeking to gain a lien transfer bond must file the following with a clerk’s office:
- Deposit a sum of money/bond that is equal to the lien amount
- Pay interest on the aforementioned amount for a total of three years
- Pay 25 percent of the lien amount
When a lien is transferred successfully, the original owner loses the legal rights to the property and the title previously placed on the property in public records is cleared.
Other Lien Rights & Considerations
Lienors are expected to operate in good faith. Any evidence of fraudulent liens that willfully exaggerate and/or fabricate the extent and amount of goods and services, and the amount of debt owed is subject to legal consequences. Lienors should also note that owners have the right to request any of the following documents to ensure that the lien being placed on a piece of property is legitimate:
- List of Subcontractors and Suppliers
- Sworn Statement of Account
- Copy of Contract and Statement of Amount Due
Florida Construction Law Attorneys
Florida lien law may seem complicated at first, but with the experience of construction law attorneys at Warner, Sechrest & Butts, it does not have to be. As a contributor to a piece of developing property, you are entitled to proper compensation for your supplies, labor and services. Filing a claim of lien helps to ensure that such debt is paid. If not, an owner may be subject to loss of legal rights and foreclosure. If you desire to file a claim of lien against a real estate or wish to learn more about Florida lien law to protect your contributions, contact our construction litigation law firm today.
We offer free initial consultations.