In Florida, mechanic’s liens available to subcontractors and material suppliers provide powerful tools to secure payment for services performed on, and materials provided to, construction projects. However, navigating Florida Statute Chapter 713, known as Florida’s Construction Lien Law, can be extremely difficult. The Construction Lien Law has been described by Florida courts as “an outstanding example of inept legislative endeavor” and an “ill-conceived, confusing, patchwork” of rules and requirements. Despite the confusion, anyone desiring to claim a lien on an Owner’s property must strictly comply with these rules or suffer the consequences for failing to do so.
For subcontractors and material providers, strict compliance with the Construction Lien Law can prove especially difficult or complicated because those parties generally lack “privity” with the owner of the property (meaning they do not have a direct contract with the owner of the property). The Construction Lien Law requires potential lienors who are not in privity with the Owner to take additional steps to notify the Owner of their involvement in the project before any lien rights can exist or be enforced, by serving the Owner and General Contractor with a “Notice to Owner”. It is essential for most subcontractors and material providers, except those in privity with the Owner, to comply with this Notice to Owner requirement in order to perfect their construction lien rights. The Construction Lien Law Section 713.06(2)(c) provides the form that the Notice to Owner should take.
Most importantly, a Notice to Owner must be served timely or it will be of no effect and all lien rights will be lost. A Notice to Owner is generally considered to be timely when it is served (a) before commencing to supply services or materials, or (b) after commencing to supply service or materials, but before one of the following events occurs: (i) 45 days elapse from the first furnishing of services or materials, or (ii) the general contractor presents the Owner with a final affidavit and the Owner disperses the final payment. When specially fabricated materials are involved, the time period to serve the Notice to Owner begins to run from the date the fabrication of the materials commences, rather than the first delivery.
So as you can see, the Notice to Owner is required to be served at a time when, generally, a subcontractor or material supplier does not know or expect that a lien could become necessary or desired. Therefore, it is always best for a subcontractor or material provider who is not in privity with the Owner to serve a Notice to Owner on the Owner and general contractor of the project in a timely fashion in order to preserve future lien rights on a project. The Notice to Owner, by itself, does not act as a lien or encumber an Owner’s property. It is merely the first, but a critical step in the lien process for most subcontractors and material providers.
There are a few exceptions when a Notice to Owner is not required, including (i) when the lienor is in direct privity with the Owner, (ii) on federal jobs, or (iii) when the lienor does underground work for a subdivision. However, these circumstances occur infrequently and need to be evaluated on a case-by-case basis. The best practice is for a subcontractor or material provider to always serve a Notice to Owner when they are not in privity with the Owner.
A failure to abide by these hard and fast deadlines will result in a waiver of lien rights, severe loss of leverage later and may easily prevent a subcontractor or material supplier from getting paid. Knowledge of these laws is critical, and every circumstance is different, so be sure to consult with an attorney who is familiar with Florida's Construction Lien Law.
Andrew D. Wyman is the Senior Supervising Litigation Counsel at the boutique law firm of Saavedra Goodwin in Ft. Lauderdale, Florida, and holds a Martindale-Hubbell rating of “AV-Preeminent” for legal ability and ethical standards. An avid golfer, Andy resides in Boca Raton, Florida with his wife and two children. You can learn more about Andy at http://www.saavlaw.com/attorneys/andrew-wyman/ or find him on LinkedIn at https://www.linkedin.com/in/andrew-wyman/. Email Andy at firstname.lastname@example.org with any thoughts you would like to share concerning this article.
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