Mechanics lien laws are complicated, and have different rules and requirements from state to state, project to project, and role to role. Florida is always a hotbed of construction, but the mechanics lien laws housed in Title 40, Chapter 713, Part I of the Florida Statutes, titled the “Construction Lien Law” are complicated. Parties looking to file a mechanics lien in Florida must comply with these requirements, or risk losing their lien rights.
Here are the top five things you should know about how mechanics liens work in the state of Florida to preserve, perfect, and enforce your mechanics lien rights.
1) Preliminary Notice is Required in Florida
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:
- 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; or
- If hired by a sub-subcontractor, send the notice to the property owner, the general contractor and the subcontractor.
Further, just because you did contract directly with the property owner doesn’t mean that you escape all requirements for providing notice. Upon request, direct contractors must provide a list of all subcontractors and suppliers within10 days.
2) You Must File A Florida Mechanics Lien Within 90 Days From Last Doing Work (Punch List / Warranty Work Not Included)
In some states, like California, the deadline by which a lien must be filed starts to count down from the end of the project as a whole. This is not the case in Florida. Claimants in Florida must record their mechanics lien within 90 days from their own date of 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 a designated “County Recorder.”
3) Know If You Qualify For Lien Protection
Generally speaking, contractors, subcontractors, material suppliers, equipment rental companies, laborers and professionals have lien rights in Florida – whether or not you have a written contract. There are limits, however, the following 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
- Anyone who is required to be licensed in Florida, but does not have the valid license
- Maintenance workers (work / materials provided must permanently improve the property)
4) Do Not Exaggerate Your Lien Claim
This is definitely not a Florida specific requirement, but it’s one that is particularly relevant in Florida. While filing a fraudulent or exaggerated lien is never a good idea, in Florida filing a mechanics lien considered “fraudulent” is a 3rd degree felony. While it may be difficult in some cases to distinguish between a “mistake” or something subject to a “good faith argument” versus an actual willful or negligent exaggeration – it’s best to make the strongest effort possible to limit the lien to validly lien-able amounts.
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 many of these amounts may be recoverable in litigation, they cannot be added to lien itself, which is statutorily limited to the value of the actual permanent improvement to the property.
5) Know the Time Limit For How Long Your Lien Is Valid & Enforceable
Mechanics liens are only effective for a defined period of time, and this is just as true in Florida as it is everywhere else. Once the effectiveness period is up, the lien expires as a matter of law and is invalid and unenforceable unless you have filed a lawsuit to enforce the lien and foreclose upon the property. 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:
- Foreclosure period is reduce to 60 days if the property owner serves a Notice of Contest of Lien (F.S. 713.22(2)).
- Foreclosure period reduced to 20 days if the owner or interested party files a lawsuit complaint and summons with a rule to show cause on the mechanics lien (F.S. 713.21(4)).
If you keep these 5 facts in mind – you are well on your way to making sure you are secured on every project, improving your cash flow, and getting paid every time.
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