Florida Construction Lien Law: Your Legal Guide

Construction projects involve many parties – owners, contractors, subcontractors, suppliers, architects, engineers, construction workers and more. With so many parties involved, payment disputes often arise. Florida construction lien law establishes legal rights that help protect payments for work and materials provided for construction projects. Understanding Florida’s construction lien laws is important for all parties involved in construction within the state. This guide provides a comprehensive look at Florida construction lien regulations to help you understand your rights and responsibilities.

What is a Construction Lien?

A construction lien (also known as a mechanic’s lien or materialman’s lien) allows contractors, subcontractors, suppliers and architects who provided work, materials or professional design services for a construction project to place a lien on the property to secure unpaid payments. The lien encumbers the legal title of the property to motivate payment settlement from the property owner.

The Florida Construction Lien Act: Key Provisions

Florida first enacted construction lien statutes in 1853. Since then, lien laws evolved over time culminating in the comprehensive Florida Construction Lien Act in 1978. Key provisions of the Act include:

Gives automatic lien rights to contractors, subcontractors, suppliers and others contribuing to real property improvements per contractual agreements for payment.
Lien rights apply to privately owned residential, commercial and public works construction. Exceptions exist for state, county and municipal projects.
Lienors must record a Claim of Lien in county public records where the property lies within 90 days of their final furnishing date. This preserves lien rights.
Property owners can transfer lien risks to surety bond providers via Notice of Bond or payment bond purchases. This substitutes bond protections for liens.
If a lienor who recorded a claim of lien pursues foreclosure, the property owner can transfer lien rights from the real estate to cash collateral via a Transfer Bond to clear title encumbrances.
1 year “Statute of Limitations” to file a lawsuit to foreclose the lien or the lien expires and becomes unenforceable.

Who Can File Construction Liens in Florida

The Florida Construction Lien Act defines those eligible for lien rights as direct contractors, subcontractors, sub-subcontractors, material suppliers, architects, landscape architects, interior designers, engineers and surveyors that contract with or provide work, services or materials per a contract for enhancing real property value under Florida’s Lien Law. Prime examples include:

Direct Contractors: General contractors, prime contractors or head contractors hired directly by the property owner fall under this category. Direct contractors qualify for lien rights themselves and also notify the owner of potential lien rights for subcontractors per Florida Statute 713.06 (2)(a).

Subcontractors: Subcontractors have automatic lien rights without need for notice beyond filing a Claim of Lien. The law defines a subcontractor as anyone not in direct privity of contract with a property owner. This includes sub-subcontractors and all downstream entities contracting under the direct contractor. Applies to laborers, materials suppliers and others providing improvements to real property.

Suppliers: Any entity supplying materials, equipment, fixtures or other supplies for constructing buildings or enhancing property improvements qualifies for lienor rights, including supplying forms, boom lifts and portable offices, not just building materials. No need for a direct contract with the property owner. Sub-supplier rights also apply.

Design Professionals: Per Florida Statute 713.03, registered architects, landscape architects, engineers, interior designers licensed under F.S. 481 and professional land surveyors all qualify for lien rights.

Florida Lien Rights By Project Type

Understanding how Florida’s Construction Lien Law applies to specific project types is important. Key distinctions exist between private works and public works.

Private Construction Projects

Florida’s Lien Law protects nearly all standard forms of private construction projects where an owner contracts with a builder to enhance property improvements, including:

Residential construction – Single family homes, condos, apartments, townhouses, etc.
Commercial construction – Offices spaces, retail buildings, warehouses, etc,.
Institutional facilities – Churches, hospitals, schools, care facilities, etc.
Infrastructure projects – Roads, bridges, utility plants, water treatment facilities

The Florida Construction Lien Act applies automatically for labor, materials and services provided on private construction projects without need for notice beyond recording a Claim of Lien to preserve rights.

Public Construction Projects

Florida’s Construction Lien Law does NOT apply to public works construction for state, county or city owned properties. This includes public schools, municipal buildings, state colleges, public infrastructure projects and more.

However, Lien Law does still apply for public works projects owned by other public entities like water districts, ports authorities and transit authorities. The law also grants limited lien rights against leasehold interests if a private entity leases public lands for construction, such as building a restaurant in a public park.

But public works contractors lose lien rights and claims against government properties to motivate timely payment. Prompt Pay Acts at federal, state and local levels provide some protections for builders working under public contract, including mandatory payment timeframes.

Bonding Out Lien Rights

For both private and public works, property owners can substitute lien rights with surety bond protections per Florida Statute 713.23 to clear title encumbrances. This requires recording a Notice of Bond with county records and getting a certified copy to all potential lienors. Many public owners require general contractors to furnish payment bonds to back project obligations.

For private owners, transferring lien rights to bonds clears the way for selling property or securing financing without risk of potential liens down the road. Owners also use transfer bonds to remove recorded lien claims and satisfy Condition of Title requirements for closings and settlements.

Perfecting & Enforcing Lien Rights

To leverage lien remedies under Florida law, potential lienors must follow proper steps to both perfect lien rights legally and pursue valid enforcement options. Key aspects include:

Perfecting Lien Rights

Provide Demand for Copy of Contract: Subcontractor or suppliers can request a copy of the prime contract or sub contracts per F.S. 713.06 (2)(d) to evaluate lien rights.
Record Claim of Lien: Must file a Claim of Lien form with county clerk to attach lien to property and preserve rights – due within 90 days of last furnishing labor, goods or services to the project under F.S. 713.08 (5). Can extend timeframes via continuing contract clauses.

Enforcing Lien Rights

Settlement Discussions: Liens often prompt negotiations between parties over unpaid invoices. Title companies facilitate settlements.
Foreclose the Lien: A lienor perfects rights by recording a claim, but must file a lawsuit to “foreclose” the lien within 1 year per Florida’s Statute of Limitations to formally enforce rights or lien expires.
Schedule a Mediation: Per F.S. 713.24 (1), lien litigation requires participating in at least one mediation session – a structured negotiation process assisted by certified professionals.

If no settlement, can proceed to a Bench Trial for a Judge to hear the case, render final judgment and issue a Certificate of Title per lien validity. Formally transfers property title to prevailing party.

TABLE: Key Timeframes Under Florida Construction Lien Law

Action Item Deadline
Prime Contractor: Serve Notice to Owner re: Sub Lien Rights (Private Projects) Within 45 days of starting work
Subcontractors: Provide Notice to Contractor for Labor, Materials & Services Within 45 days of starting, but no lien needed
File Claim of Lien Within 90 days after last work done
Foreclose the Lien Within 1 year after recording Claim of Lien
Request Owner Furnish Lien Transfer Bond Within 15 days of Notice of Bond

Who Notifies Who in Florida’s Lien Law Hierarchy

Florida statutes include notice requirements up and down the contractual hierarchy:

Prime Contractor > Property Owner – Notify of potential sub lien rights
Subcontractors > Prime Contractor – Notify of intent to lien if unpaid
Property Owner > Subs & Suppliers – Notify of bond to transfer lien rights

Proper notices preserve rights to retain key remedies under Florida’s Construction Lien Law if payment disputes arise later.

Resolving Payment Disputes With Liens

Leveraging lien remedies incentivizes payment settlements outside lengthy litigation. Title companies often facilitate resolutions between lien claimants and property owners with lien transfer bonds.

By recording a Claim of Lien for a valid debt, a prime contractor, subcontractor or supplier clouds legal title which causes problems for owners. Common motives to resolve lien claims include:

Remove Title Encumbrance: Owners can’t sell or mortgage property without clear title.
Meet Closing Contingencies: Buyers won’t finalize purchases until no liens appear against the property per standard closing conditions.
Reduce Legal Expenses: Cheaper for owners to negotiate settlement payouts than litigation costs to fight lien claims.
Avoid Foreclosure Judgments: If a lawsuit commences, judges can force property sales to pay off creditors.

For lien claimants owed money, recorded liens provide leverage to secure payment and avoid losses. Why the construction industry calls contractor lien rights “bonding” the project – helps guarantee financial recourse if you fulfill contract obligations but don’t get paid.

While lien disputes often get resolved before reaching the courtroom, understanding how to file and foreclose liens properly gives the best protections under Florida law if legal enforcement becomes necessary. An attorney that specializes in construction law can provide guidance for exercising lien rights or defending against claims.

Protecting Yourself as a Property Owner

As a property owner undertaking a construction project, it’s important to understand how to limit financial risks from non-payment disputes between contractors that can still expose you personally to liens against your property. Key protections include:

Research Reputable Builders: Vet general contractors thoroughly and verify proper licensure, insurance coverage and bonding capacity. Review complaints, litigation history, tax liens and credit reports for red flags.

Require Lien Waivers: Make lien waivers from GCs and subcontractors a contingency in your construction contracts, both partial waivers during projects and final waivers upon payment completion.

Finance With Construction Loans: Construction loans administered by title companies manage draws and lien waivers carefully before advancing money to make sure subcontractors get paid as work progresses.

Purchase Title Insurance: Get an Owner’s Policy with lien coverage for claims that arise despite other precautions. Provides legal defense protections and claim payouts. Also covers other title disputes over easements, boundary encroachments, etc..

Notice of Commencement: File this formal public notice with county clerk at start of project per Florida Statute 713.13 to request subcontractors serve notice to owner of potential lien rights. Clarifies notice duties.

Promptly Address Notices: If prime contractors or subcontractors supply notices of nonpayment or intent to lien, respond quickly and facilitate dispute resolution.

Secure Lien Transfer Bonds: Work with your title company to record Notice of Bond and furnish bond to claimants. Transfers liens from property title to cash, protects ownership rights.

While lien risks always exist on construction endeavors, understanding Florida lien law provisions that safeguard both contractors and owners allows proper precautions so disputes don’t derail projects.

Frequently Asked Questions

Do I lose my lien rights if I don’t file quickly?

Yes. Florida’s relatively short deadline to file a Claim of Lien requires action within 90 days of last providing work or materials. Miss this timeframe and lien rights expire forever. Filing a Claim of Lien Attachment after completing a Notice to Owner preserves rights pending attempts to resolve disputes. Continuing contract clauses can also extend deadlines in some longer term project scenarios.

What if someone files a fraudulent lien against my property?

Recourse exists against false lien recording. Fines under F.S. 713.31 allow damages triple the loss plus attorney’s fees. The State Attorney can also pursue criminal charges for construction fraud. However, the cloud remains against title until you undertake legal action to remove invalid liens.

Can I be forced to sell my property to pay off liens?

If multiple liens get recorded and stay unresolved, then yes eventually suit to foreclose can force a judicial sale to pay creditors. Rare on private properties but happens more commonly with troubled condo projects. Before reaching this point, pursuing lien transfer bonds typically clears encumbrances from title.

Can I get financing or sell the property with a lien still showing against title?

No. Most lenders and buyers won’t finalize loans or close purchases with clouded title. Too risky. Either liens must get resolved and removed from record or owners can file transfer bonds to clear the way for conveyance or securitization even with disputes pending resolution afterwards.

What if I already fully paid my general contractor and subs still file liens?

Even if owners pay prime contractors in full, Florida law still exposes your property to valid lien claims by subs and suppliers the GC failed to pay. Notifying all subs of final payment does not invalidate their lien rights. GC liens may become invalid but sub liens remain enforceable. Another reason to mandate lien waivers.

Key Takeaways

Florida’s Construction Lien Act protects unpaid contractors, subcontractors & suppliers providing lien rights to secure claims.
Must record Claim of Lien on property within 90 days of last contribution to a project to preserve rights.
Can pursue foreclosure on liens within 1 year if payment disputes persist after filing.
Property owners can substitute bond protections for lien rights against real estate.
Lien disputes often prompt settlement negotiations since all sides want to avoid litigation.

Conclusion

Florida’s long history with construction lien laws evolved into today’s comprehensive protections codified within the state Construction Lien Act. Understanding what trades and supply chains qualify for lien rights as well as key notices and deadlines helps contractors secure prompt payment – and informs property owners how to limit risks. Proper project documentation, transparent communications and utilizing lien transfer bonds provide the best ways to keep construction projects on track even when disputes over payments arise. For professional guidance on exercising or responding to lien claims, consult a Florida construction attorney to safeguard your interests.

Because nobody should feel alone in the fight for fair payment.

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Florida Construction Lien Law: Your Legal Guide