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Sarasota, Florida - A local newspaper recently reported that a local home builder was in financial trouble and that 75 homes which were under construction were sitting idle. Construction had stopped because there was no money to pay the subcontractors and suppliers. Although the newspaper story did not report this, it is likely that almost all of these homes were being built on land owned by the purchasers. It is also likely that each of these purchasers can demonstrate that they have paid the home builder more money than the value of the work done on each job.

Finally, it is almost a given that subcontractors and suppliers are owed money by the home builder for work and materials supplied to each home. How do these subcontractors and suppliers get paid? Who has to pay them? Florida’s Construction Lien Law, Chapter 713, Florida Statutes, was intended to provide a mechanism for contractors, subcontractors, and suppliers to be paid for labor, material or services they furnish to improve land, that is, to build something on it. The statute is complex and confusing. The legislature amends the statute almost yearly. Hundreds of Court decisions have been written interpreting it. This article is not comprehensive; it only highlights a few salient points. You should consult a construction lawyer about any problem you may have. The Florida Bar’s Board of Legal Specialization now certifies Florida lawyers as specialists in “Construction Law”. Obviously, such a specialist should be able to answer your questions. To perfect its lien rights, a contractor, subcontractor, or supplier who is not in “privity” (i.e., does not have a direct contract) with the owner of the property, must file a “Notice to Owner” (this form is in the statute) either before commencing work or within 45 days of first furnishing work. The statute specifies who must receive the notice and how it must be served. Failure to comply with the statute may result in the loss of all lien rights. A contractor in “privity” with the owner does not have to serve a Notice to Owner.

A Claim of Lien must be recorded within 90 days after the final furnishing of material or labor. The final furnishing of labor or material must be substantial work. Punch list or remedial work do not count. The statute contains the form of a Claim of Lien and specifies its contents and requirements for service. A Claim of Lien may be amended, but only within the 90 day period that it could be originally be filed. Again, failure to comply with the 90-day requirement forfeits all lien rights. A construction lawyer should be consulted in the preparation and recording of a Claim of Lien.

An action to enforce the Claim of Lien must be commenced within one year of the recording of the Claim of Lien. The action to foreclose the Lien forces the sale of the property to satisfy the Lien. At least five (5) days before commencing the lawsuit, a contractor in privity with the owner must submit a “Contractor’s Final Affidavit” to the owner. Different rules apply where the contractor has a private payment bond in place or it is a public job (which will also be bonded). Liens may not be placed against these jobs. Rather, a claim against the bond is made.

This article will not discuss the owner’s defenses against a claim of lien except to say that the owner should secure a “Release of Lien” from each lienor who has served a Notice to Owner, each time a payment is made to the contractor. An owner who fails to secure Releases of Liens from each lienor for each payment made is exposing himself to the risk of double payment. Chapter 713, Florida Statutes, has many requirements and provisions not discussed here. No contractor, subcontractor or supplier should embark on a project without the advice of a construction lawyer.

William G. Christopher heads the Maglio Christopher & Toale Law Firm Construction Law and Litigation Department. He is certified by The Florida Bar in both Construction Law and Business Litigation Law. He is also certified by the National Board of Trial Advocacy in Civil Trial Advocacy. He is an arbitrator with the American Arbitration Association and certified by the Florida Supreme Court as a Circuit/Civil Mediator. Prior to becoming an attorney Mr. Christopher achieved the rank of Captain during his service in the U.S. Army Corps of Engineers from 1962 to 1967.