The Basics of Florida’s Construction Lien Law
As the prices of real estate continue to rise in the Florida, more and more people are contemplating making changes or additions to their homes through construction improvements. Dealing with a contractor of any kind, especially for a remodel, is often a difficult and uncertain task both financially and in respect to the final result. Before entering into any contract with a contractor, make sure that you are dealing with a licensed contractor. If you are not, then be sure that you know who you are dealing with and understand that you are responsible for pulling permits if necessary.
Also, protect yourself when you pay your contractor. As a general matter, a licensed Florida Contractor has the right to file a lien on your property if they are not paid after jumping through a few hoops. First, a General Contractor usually files a Notice of Commencement in the Public Records where you home is located. This is required for obtaining a permit. This document protects the General Contractor and all Subcontractors should you sell your property while construction is taking place. All liens filed on the property for the job, relate back to the date of the filed notice of commencement.
Next, any subcontractors working through the contractor must send you a notice to owner telling you they are working on the home. This has to be sent within 45 days after they first start to work on the job. When you pay your contractor, you should receive a release or partial release from all subcontractors that have sent you a notice to owner along with a partial release from your contractor. You can also get your Contractor to give you an affidavit prior to payment telling you all subcontractors they have hired on the job. This will ensure that you are paying the correct amounts as the job progresses.
Finally, if a licensed subcontractor or contractors has not been paid, they have the right to file a lien on your property within 90 days of completion of their work on the job. This must also be sent to the owner. It is filed in the public records of the County where the jobsite is located. The owner has the right to contest this lien which shortens the time for the Contractor to file suit to foreclose the lien to 60 days. Otherwise, the contractor must file suit to foreclose the lien within one year of filing the lien or the lien is no longer a valid lien. If suit is filed, the Contractor has the right to recover all attorney’s fees and costs in the foreclosure case if they prevail.
A couple more points, unlicensed contractors cannot file a lien. It is illegal to do so. Furthermore, if a contractor includes amounts in their lien that they have not paid to their subcontractor, this will result in an invalid lien filing.
Feel free to call our office if you need further help regarding lien filings or your construction contract.