This blog post aims to provide a comprehensive understanding of the Claim of Lien, covering its purpose, the parties involved in filing it, critical deadlines, and key considerations to keep in mind.
What is a Claim of Lien?
A Claim of Lien is a formal document that is publicly recorded to establish a legal encumbrance on a property. By filing this document, contractors can cloud the property's title and potentially use it as a basis for foreclosure or property ownership transfer. The Claim of Lien contains essential information such as the claimant's identity, property owner details, hiring party, initial and final work dates, and more. To make the Claim of Lien legally binding, it must be signed, notarized, and recorded in the county where the project is located.
Who Needs to File a Claim of Lien on a Private Project?
If you have a direct contract with the property owner, it is your responsibility as a contractor to file a Claim of Lien. In this case, you do not need to send a Notice to Owner. However, subcontractors, sub-subcontractors, suppliers, and suppliers to sub-subcontractors must file a Claim of Lien to secure their right to receive payment for the work performed on the project.
Claim of Lien Rules for Public and Private Projects
- On public projects, contractors and suppliers generally rely on bond claims instead of filing a Claim of Lien.
- Claims of Lien recorded on public projects hold no legal weight and have no enforceable effect.
- Clerks who receive Claims of Lien on public projects primarily verify the presence of a signature and notary seal, without thoroughly examining other essential details.
- Although some individuals may still choose to record Claims of Lien on public projects, these documents are considered meaningless and do not carry any legal significance.
What is the Claim of Lien Deadlines in Florida?
Claim of Lien in Florida has specific deadlines that must be followed.
- The claim must be filed within 90 days from the claimant's last work on the project.
- The 90-day countdown starts from the day following the claimant's final workday.
- Weekends and holidays are included in the calculation of the 90-day period.
- If the 90th day falls on a weekend or a holiday when the clerk's office is closed, the deadline is extended to the next business day.
- This extension allows claimants to have up to 93 days to record their Claim of Lien, considering weekends and holidays.
What is “Last Work"?
Understanding what constitutes "last work" is essential to comply with the Claim of Lien deadline. It is important to note that punch list work, warranty work, and passing inspections do not count as "last work" by themselves. While punch list work can coincide with regular work and potentially be considered the last day of work, claimants should ensure they record their Claim of Lien based on the day they genuinely completed their work. Base contract work and approved change order work are indeed considered as last work, meaning they are valid for lien rights.
Additionally, claimants should exercise caution when relying on the expectation of returning to complete work. If circumstances prevent them from returning, such as a job shutdown or demobilization, failing to record the Claim of Lien within the 90-day window will result in the loss of lien rights.