Non-payment and the power of a construction lien
Non-payment is an unfortunate part of working in the construction industry. Nearly every contractor, subcontractor, equipment lessor and supplier has experienced not being paid. A powerful collection tool in your arsenal to get paid is a construction lien.
A construction lien, also known as a mechanic's lien, prevents a property from being sold, transferred, refinanced, or may even freeze project funds from the construction lender.
The lien is against real property
A construction lien is filed against the property title and is noted in land records. The lien is not recorded against a person or their company. For example, if a general contractor is not paying you, you will not file a lien against the general contractor. You will lien the real property where you made the improvements.
Who can file a construction lien in Florida?
So, who is eligible to file a construction lien in Florida? The following parties have claim of lien rights:
· Prime contractors
· Material suppliers
· Professionals (architects, designers, or engineers)
Are there prerequisites to filing a lien?
If you do not have a direct contract with the owner of a property, you will be required to send a Notice to Owner (NTO) in Florida. If you do not deliver the NTO within 45 days from first furnishing labor and/or material, you will forfeit your lien rights.
Who cannot file a mechanic’s lien in Florida?
In Florida, remote contractors do not have lien rights. A remote contractor is anyone who is three or more levels below the owner, also known as 4th-tier. In addition, suppliers to suppliers cannot lien a property.
What is my time frame to lien a property?
You have 90 days from the last day you are on the property, to lien a property. The last day on the job does not include punch list work.
The process of filing a contractor’s lien in Florida may seem simple but missing the deadline, not sending the required Notice to Owner, or making errors in your filing can invalidate your lien claim.