How do Florida Lien Laws Apply to a Contractor
Florida law provides that a contractor, subcontractor or material supplier (“lienor”) who provides labor, work, or materials for the improvement of private real property located within Florida has a lien on that property for the value of the materials, labor, or work provided.
What is a Lien Law?
According to Florida law, those who work on your property or provide materials, and are not paid-in-full, have a right to enforce their claim for payment against your property. This claim is known as a construction lien. If your contractor fails to pay subcontractors or material suppliers, the people who are owed money may look to your property for payment, even if you have paid your contractor in full. This means that if a lien is filed against your property, your property could be sold against your will to pay for labor, materials, or other services that your contractor may have failed to pay.
These are other types of liens you might run into:
- IRS Liens- the government's legal claim against your property when you neglect or fail to pay a tax debt. The lien protects the government's interest in all your property, including real estate, personal property, and financial assets.
- Child Support Liens- If you owe child support, the custodial parent can place a lien on your property. A custodial parent who is owed child support can place a lien on your property. A lien is a notice that tells the world that there are claims against you for money.
- Mechanic’s and material man's Liens- A material man's lien may arise when construction companies or subcontractors take part in building, renovating or making repairs to a home. The lien acts as a type of insurance so that the payment eventually will be made.
- Family Law Real Property Lien- It allows an attorney to have equity in only their client's interest in real estate to cover fees that are earned or anticipated to be incurred in a divorce or separation proceeding.
What can a Homeowner do to Protect Themselves from a Lien?
- You may be liable if you pay your contractor and he fails to pay his suppliers or contractors. There is a way to protect yourself. A Release of Lien is a written statement that removes your property from the threat of lien. Before you make any payment, be sure you receive a waiver from suppliers and subcontractors covering the materials used and worked on your property.
- Request from the contractor a list of all subcontractors and suppliers who have a contract with the contractor to provide services or materials to your property.
- If your contract says partial payments before the work is completed, get a Partial Release of Lien covering all workers and materials used to that point.
- Before making the last payment to your contractor, obtain an affidavit from your contractor that says all unpaid parties who performed labor, services or provided services or materials to your property. Make sure that your contractor provides you with final releases before you make the final payment.
- Always file a Notice of Commencement before beginning a home construction or remodeling project. You must record the form with the Clerk of the Circuit Court in the county where the property being improved is located. Also, post a certified copy at the job site.
- In addition, the building department is prohibited to perform the first inspection if the Notice of Commencement is not filed with the building department. You can also supply a notarized statement that the Notice has been filed, with a copy attached.
For more information on how homeowners can protect themself from a lien please visit Protecting Yourself and Your Investment.
What Rights Does a Contractor have in Regards to Lien Laws in Florida?
A right to claim a lien may not be waived in advance. A lien right may be waived only to the extent of labor, services, or materials furnished. Any waiver of a right to claim a lien that is made in advance is unenforceable.
How can a Contractor make a Claim or File a Case of Lien Laws against an Owner or Payee?
Contractors, laborers, materials suppliers, subcontractors and professionals such as architects, landscape architects, interior designers, engineers or land surveyors all have the right to file a claim of lien for work or materials. Always require a release of lien from anyone who does work on your home. He or she is obligated to pay the lienor, regardless of the right of the lienor to claim a lien; but, if the lienor claims a valid lien, the contractor shall not recover the amount of the lien recovered by the lienor, and the amount of the contractor’s claim of lien may be reduced accordingly by court order.
For information on Judgement Liens in Florida, you might want to visit the Secretary of State's Website