Complex construction projects can be very costly. Regulations, labor shortages, increases to material costs, and other factors could contribute to this, so property owners and contractors both should be vigilant to protect their rights under Chapter 713, Florida Statutes. If work or materials go unpaid, a mechanic’s lien is a convenient tool to recover the debt, but the requirements must be strictly followed. Don’t become a victim of poor or dishonest financial and record-keeping practices.
Construction liens and also referred to as mechanic’s liens. Contractors, subcontractors, material suppliers, laborers, and design professionals can record mechanic’s liens as legal leverage for non-payment, and as a mechanism to recover their attorneys’ fees and legal costs in the collection action. They give claimants the right to foreclose on a home or other real property they helped build or repair. They take priority over other types of debtor claims, giving a contractor a better chance of recovering money if the owner refuses to pay, goes bankrupt, or is otherwise “uncollectable”.
Some ways owners can avoid mechanic’s liens could benefit you if they help prioritize timely payments. But there are others you might want to keep an eye on and thoroughly review in case they’re used to weaken your claim.
Who can you file a mechanic’s lien against?
In most cases, Mechanic’s liens can be recorded against the real property where construction or design work was performed or materials were supplied, and payment was not issued from the owner to the contractor, or from the contractor to a third-party subcontractor or materialman who has timely issued a Notice to Owner (a laborer is not required to issue a Notice to Owner in most circumstances). Persons who typically have the right to lien under Florida Statutes § 713.02 and § 713.05 – 713.06 are:
- Contractors
- Subcontractors and Sub-Subcontractors with a timely Notice to Owner
- Architects, landscape architects, interior designers, surveyors, mappers, and engineers (must be licensed). [If the design professional had a direct contract with the owner, then he or she may lien the property for services rendered even if the property was not actually improved. If the professional is not in privity, then lien rights arise only if the property is improved. Design professionals not engaging in construction activities need not serve a contractor’s final affidavit. Design professionals are entitled to lien for design work, as well as supervisory work in the construction of the improvement.]
- Individual Laborers
- Material Suppliers
- Assignees (lien rights are freely assignable except for laborer liens, which are personal to the individual laborer and therefore unassignable)
Persons who typically DO NOT have the right to lien under Florida Statutes § 713.02 and § 713.05 – 713.06 are:
- Sub-Sub-Subcontractors
- Suppliers to Suppliers
- Unlicensed Contractors (however their licensed subs and sub-subs retain rights)
- Material Fabricator (unless also the supplier)
- Public Land where Public Works are improved
- Bonded jobs (performance & payment bonds)
- Individuals who did not actually perform work on land (other than architects, landscape architects, interior designers, engineers or land surveyors)
- Any improvement for which the direct contract price is $2,500 or less
- Any improvement where a person is not in contractual privity with owner
- Cleaning or Maintenance Services (largescale landscaping is an exception)
- Destructive testing performed under Florida Statute § 558.004 (unless contracted by owner)
In Florida, the deadline to file one is 90 days from the last day of work performed on the property. Failure to meet the deadline invalidates the lien.
Ways owners try to prevent mechanic’s liens
Owners avoid mechanic’s liens for reasons such as title issues. Some owners do this by:
- Collecting preliminary notices and conditional lien waivers: The notice is a construction requirement. It secures your lien rights if you don’t get paid. Signing a conditional waiver gives up that right once the owner pays.
- Securing a payment bond: This bond shifts the non-payment risk from the property to the bond guarantor. Claims get levied against the bond instead of the property.
- Issuing joint checks: Writing checks made out jointly to the general contractor and a particular subcontractor or supplier ensures that the checks are only cashed with endorsement from both beneficiaries.
- Directly paying subcontractors and suppliers (where allowed by contract): This reduces the risk of subcontractors or suppliers filing a lien.
- Serving statutory demands: Statutory demands can be issued (see Florida Statutes § 713.06, § 713.16, and § 713.165 for examples), which, if not timely answered, can limit a lienor’s right to record an otherwise valid lien.
A mechanic’s lien is a helpful tool for construction industry vendors and service providers to protect themselves and their financial interests. However, due to the lien’s strict rules and timelines, you risk filing a defective lien if you do it on your own. It’s advisable to consult an experienced construction and lien lawyer to find out if it’s an option for you and to ensure you meet all legal requirements and that you have established proper operating procedures and protocols to ensure you properly prepare and maintain all required records to protect your lien rights.
Homeowners also need to remain vigilant and proactive to protect against fraudulent liens, especially those which would otherwise be enforceable if the proper procedures were followed and documents were prepared. A common problem is where an owner pays a contractor, but the contractor does not forward the payments to material suppliers or subcontractors who have perfected their own lien rights. If it is a large and expensive project, it may be beneficial to hire consult an experienced construction and lien lawyer to find out what rights and protections have been overlooked, and to provide guidance during the construction process to avoid common pitfalls and traps.
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