7 Common Lien & Release Traps Every Contractor Should Avoid | Florida Webinar

Understanding the Basic Florida Lien Timeline

Before diving into the common pitfalls, it's important to understand the basic steps required to preserve lien rights.

Step 1: Serve a Notice to Owner

If you do not have a direct contract with the property owner, you must serve a Notice to Owner (NTO) within 45 calendar days of your first work or material delivery.

This requirement applies to:

• Subcontractors

• Sub-subcontractors

• Suppliers to subcontractors

• Suppliers to sub-subcontractors

Contractors with a direct contract with the owner are exempt from this requirement.

Step 2: Record Your Lien

A Claim of Lien must be recorded within 90 calendar days of your last date of work or material delivery. Many contractors mistakenly believe they must wait until a project is complete before filing a lien. A lien can be recorded while work is still ongoing if payment issues arise.

Step 3: Serve the Recorded Lien

Once recorded, the lien must be served on all required parties within 15 calendar days.

Step 4: Serve the Contractor's Final Affidavit

If you have a direct contract with the owner, Florida law requires you to serve a Contractor's Final Affidavit at least five days before filing a lien foreclosure lawsuit.

Step 5: File Suit Before the Deadline

A lien foreclosure lawsuit must generally be filed within one year of recording the lien. If pursuing a payment bond claim, the lawsuit deadline is typically one year from the claimant's last date of work.

Lien Trap #1: Mailing a Notice to Owner Too Late

One of the most misunderstood rules in Florida lien law involves the Notice to Owner. Many people believe that the notice only needs to be mailed by the 45th day. Unfortunately, that's not true. The Notice to Owner must be received by the 45th day after first work.

For example, if you mail the notice on Day 41 and delivery takes five days, the owner may not receive it until Day 46. In that situation, your lien rights could be lost.

The Safe Approach

A common best practice is to send the Notice to Owner no later than the 40th day and obtain proof of mailing through certified mail documentation. By acting early, you avoid delivery-related risks that could invalidate your lien rights.

Lien Trap #2: Forgetting to Include Retainage

Retainage often creates confusion when lien deadlines approach. Many contractors assume that retainage can be claimed later because payment is not yet due. Florida lien law does not provide a special exception for retainage. If retainage remains unpaid, it must be included in your lien claim before the 90-day lien deadline expires. Failing to do so may permanently eliminate your lien rights for those retained funds.

Important Exception for Bond Claims

In some payment bond situations, additional time may exist if retainage is the only amount outstanding. However, if other unpaid balances exist, all amounts should be addressed together.

Lien Trap #3: Missing the 30-Day Deadline After a Notice of Commencement Termination

Most construction professionals know about the standard 90-day lien deadline. What many don't realize is that a Notice of Commencement termination can dramatically shorten that timeline. When a Notice of Commencement is terminated, claimants may have only 30 days from the termination date to record a lien for amounts owed under that notice.

This situation commonly arises when:

• A property is refinanced

• Ownership changes

• A new contractor takes over the project

• Construction financing is restructured

Why This Matters

If you are owed retainage or other unpaid amounts when the Notice of Commencement is terminated, you must protect those rights within the shortened deadline. Missing the 30-day window can permanently eliminate your ability to file a lien for those amounts.

Don't Forget a New Notice to Owner

If a new Notice of Commencement is recorded and work continues, a new Notice to Owner is required to preserve lien rights for future work.

Lien Trap #4: Using Invoice Dates Instead of Work Dates

Another costly mistake involves calculating deadlines based on billing activity rather than actual construction activity.

Your lien deadlines are not triggered by:

• Invoice dates

• Payment due dates

• Pay applications

• Billing cycles

Instead, Florida lien deadlines are based on actual work performed or materials delivered.

• The 45-day Notice to Owner deadline begins from your first work.

• The 90-day lien deadline begins from your last work.

Understanding this distinction is critical because relying on invoice dates can result in missed deadlines and lost lien rights.

Release Trap #1: Email Copies of Releases Are Legally Enforceable

Many contractors mistakenly believe that a release is not valid unless the original signed document is physically delivered. In reality, an emailed copy of a signed release may be fully enforceable. This creates significant risk when unconditional releases are exchanged before payment is received.

Protect Yourself with Conditional Language

Whenever possible, make your release conditional upon actual receipt of funds.

A simple example is:

"This waiver and release is conditioned upon and shall not become effective until the undersigned receives paid funds in the amount stated herein."

This language helps ensure you do not accidentally waive your rights before payment clears.

Release Trap #2: A Final Release Ends Future Lien Rights

A final release does exactly what its name suggests. Once provided, your lien rights for that project are typically extinguished. If additional work, deliveries, or change-order work occurs later, you may need to serve a new Notice to Owner to regain lien rights. Many suppliers lose protection because they assume a prior Notice to Owner remains effective after issuing a final release.

It does not.

Release Trap #3: The Through Date Is More Important Than the Payment Amount

One of the most dangerous release mistakes occurs when the payment received does not match the amount expected. Suppose you expect a payment of $10,000 that covers work through July 31. Instead, you receive only $8,000. Many contractors accept the payment but fail to revise the release language.

The problem is that the release's "through date" may still waive all rights through July 31, regardless of the amount received. If a dispute arises later, a court may conclude that you voluntarily released those rights.

How to Fix It

You have two options:

1. Adjust the through date to reflect the work actually being paid.

2. Add explicit exceptions identifying invoices or amounts that remain unpaid.

This ensures you preserve your rights to collect outstanding balances.

Final Thoughts

Florida's lien laws are powerful, but they are also highly technical. Missing a notice deadline, mishandling retainage, overlooking a Notice of Commencement termination, or signing an improper release can cost thousands of dollars in recoverable payments.

By understanding these four lien traps and three release mistakes, contractors, subcontractors, and suppliers can significantly reduce risk and better protect their right to payment on every project.

When in doubt, act early, document everything, and seek guidance before signing releases or allowing critical deadlines to pass.

Common Questions Contractors Ask About Florida Lien Notices and Releases

Do subcontractors need to send a Notice to Owner if the owner is also acting as the general contractor?

Generally, no. When the property owner and the builder or general contractor are the same entity, or closely related entities, subcontractors are often treated as the "contractor" under Florida lien law. In these situations, a Notice to Owner (NTO) may not be technically required. However, sending an NTO is still considered a best practice because it helps avoid future disputes and preserves your position if questions arise later.

Are electronic signatures on lien waivers and releases legally enforceable?

Yes. Electronic signatures are generally valid and enforceable under Florida law, provided the person signing intended to be bound by the document.

This includes:

• Electronic signature platforms

• Scanned signatures sent by email

• Faxed copies

• Emailed signed documents

Courts typically focus on whether the signer intended to approve the document rather than the format of the signature itself.

Is notarization required on lien waivers and releases?

No. Florida law does not require lien waivers and releases to be notarized. While many contractors, owners, and lenders prefer notarized releases for additional verification, the absence of a notary does not automatically make a release invalid.

If a Notice of Commencement expires and a new one is recorded, do I need to send a new Notice to Owner?

It depends on the circumstances. If the new Notice of Commencement is simply replacing an expired one and no material details have changed, a new Notice to Owner may not be necessary. However, if the new Notice of Commencement includes significant changes such as:

• A different owner

• A different lender

• A different contractor

• A different legal structure for the project

Then sending a new Notice to Owner is highly recommended. When in doubt, send a new NTO. There is little downside to sending one, but failing to send one when required could jeopardize your lien rights.

How do I know when a project officially starts if the start date is not listed on the Notice of Commencement?

In most cases, you won't know the project's official start date from the Notice of Commencement alone.

That information may be available through:

• Building permits

• Contractor records

• Owner records

• Project documentation

However, for lien rights purposes, the project start date is often less important than your own first furnishing date.

For subcontractors and suppliers, the critical question is:

When did you first provide labor, materials, or specially fabricated materials to the project?

That date generally starts the clock for your Notice to Owner deadline.

What qualifies as specially fabricated material?

Specially fabricated material refers to materials custom-made for a specific project and not easily resold to another customer.

Examples include:

• Custom windows

• Custom doors

• Specialty architectural components

• Made-to-order fabricated assemblies

If a product can easily be resold to someone else, it is generally not considered specially fabricated material. For specially fabricated materials, lien rights may begin when fabrication starts rather than when the materials are delivered.

Is the Notice to Owner deadline 40 days or 45 days?

The statutory deadline is 45 days from first furnishing labor or materials. However, many construction professionals use a practical 40-day deadline because the Notice to Owner must be received by the 45th day.

Sending the notice by Day 40 provides a safety buffer for mailing and delivery issues.

If a contract is completed and retainage is paid, but additional work is later added to the original scope, do I need a new Notice to Owner?

The answer depends largely on whether a final release was issued. If you provided a final release, you should generally send a new Notice to Owner before performing the additional work. If no final release was issued, a new Notice to Owner may not be required. However, sending one is often the safest approach. When uncertainty exists, filing a new Notice to Owner is usually the recommended course of action.

What happens if a property address has not been assigned yet when I need to send a Notice to Owner?

This situation is common on new developments.

If no physical address exists yet, you should rely on the information contained in:

• The Notice of Commencement

• The master permit

• The parcel identification number (Parcel ID)

• The legal property description

The owner is responsible for ensuring that the information contained in the Notice of Commencement is accurate.

If you properly send your Notice to Owner using the information provided in the Notice of Commencement, your lien rights are generally protected even if some address information later turns out to be incorrect.

What if the addresses listed in the Notice of Commencement are incorrect?

Florida law generally allows contractors, subcontractors, and suppliers to rely on the information provided in the Notice of Commencement.

If you send your Notice to Owner to the addresses listed in the recorded Notice of Commencement, you have typically fulfilled your obligation, even if those addresses later prove to be inaccurate.

The responsibility for maintaining correct information in the Notice of Commencement rests with the property owner.