A construction project can be a complicated, frustrating, and costly process with a complicated construction contract. In addition to the headaches of dealing with contractors and building inspectors, owners must also be wary of Florida’s complicated lien law, Chapter 713, Florida Statutes, which provides subcontractors and material suppliers with the ability to record a lien against the owner’s property if they are not paid. If the lien is timely recorded in the public records, the lienor can file a lawsuit to foreclose the lien so long as the lawsuit is filed within one year. In addition, the prevailing party in a Chapter 713 lawsuit is entitled to recover its attorneys’ fees.
In order to avoid Chapter 713 exposure, owners should ensure that their general contractor is making regular payments to its subcontractors and materials suppliers. In addition, owners should look out for “Notices to Owner” from subcontractors or material suppliers that do not have direct contracts with the owner. These third parties must serve a “Notice to Owner” before recording their liens, and if they fail to within 45 days of commencing their work, their lien rights are extinguished. Upon receipt of a Notice to Owner, the owner should immediately contact the general contractor or project manager to assess the situation, and should also consult legal counsel.
If a lien is recorded against the property, there are several procedures available to owners to protect their rights. The owner can serve a demand for a “Sworn Statement of Account” under section 713.16, which requires the lienor to respond within 30 days setting forth the specific work/materials furnished, and an updated amount of what is owed. If the lienor fails to respond within 30 days, its lien rights are extinguished. The Sworn Statement will enable the owner to verify that the amounts claimed are for items actually completed at the project. If the lienor includes amounts for work that was not provided, the owner will have a “Fraudulent Lien” claim against the lienor, and the owner can pursue punitive damages.
Alternatively, the owner can shorten the amount of time the lienor has to file its lawsuit by recording a “Notice of Contest of Lien” under section 713.22, and mailing it to the lienor. Upon receipt, the lienor has 60 days from the time the notice is received to file its lawsuit. If the lienor fails to file the lawsuit within that time-frame, it will lose its lien rights. Alternatively, the owner can file a “Complaint for Order to Show Cause” with the Court under section 713.21, requiring the lienor to show cause within 20 days why its lien should not be vacated and cancelled. If the lienor fails to show cause or fails to commence its lawsuit against the owner within 20 days, the Court will enter an order cancelling the lien.
These are simply a few considerations for homeowners to take into account; however, you should consult with experienced Miami construction law attorneys before, during, and after a construction project to ensure that your rights are protected.
About the Author
Jacob A. Epstein concentrates his practice in the areas of business litigation, condominium and community association law, construction law, and real estate litigation. Mr. Epstein received his Juris Doctor from the University of Miami School of Law in 2015, graduating magna cum laude.