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What is a construction lien and how do they work in Florida?

FLORIDA CONSTRUCTION LAW. A construction lien, also known as a contractor's lien or mechanic's lien, is a legal claim against a property. When properties are built or improvements are made, the contractor and subcontractors may have a right to file a lien against the property if they don't receive full payment. The lien must be paid if the property is to be sold and the contractor can ultimately force the sale of the property, even homestead property, if the lien is not paid off within a certain period.

The easiest way to avoid a construction lien is to pay your contractor in full and on time. If you can't do that, many contractors will accept a payment plan if one is negotiated promptly. However, paying the contractor in full may not be in your interest, for example, if you are involved in a dispute over the project. In cases of dispute, it's a good idea to discuss the situation with an attorney experienced in construction lien law. A Florida attorney can advise whether the lien is valid and enforceable.  For instance, there are scenarios in which a contractor or subcontractor, etc. may be entitled to money damages, but not entitled to a lien on your property.  In these cases, an attorney can possibly force the quick removal or discharge of the lien.

How does this work? Will I get notice when a contractor's lien is filed?

Not necessarily. In Florida, contractors can obtain a lien without giving the property owner notice. They simply file a Claim of Lien form in the Official Public Records (land records) of the county where the property is located.  This must be done within 90 days of the last time labor, services or materials was provided.

If the unpaid amount represents the contractor's final payment, however, he or she must provide the owner with a contractor's affidavit. This affidavit must either state that all the subcontractors and material suppliers have been paid or, if they have not, list the unpaid companies and the balance due. In these cases, the construction lien may not be enforced by a law suit against the Owner, until this affidavit has been provided to the property owner.

Can subcontractors and suppliers file liens?

In Florida, it depends in part on the size of the job. If the entire job costs less than $2,500, subcontractors and material suppliers have no lien rights unless they have a direct contract with the property owner. However, design professionals do have the right to file liens -- even if their design was not ultimately used.

When a subcontractor or material supplier files a construction lien, it was in the past often referred to as a "mechanic's lien," (although these days the correct term is 'construction lien') and these liens are independent of the contractor's rights. In fact, in many cases an unpaid subcontractor or supplier can file a lien against your property even if you have paid the contractor in full, which is why Owners must be cautious. Construction liens by subcontractors, laborers and materialmen do generally require notice to the property owner.

If you have additional questions about construction liens and your legal options, contact a lawyer with experience in construction lien law and litigation.

http://www.naplesattorney.net/practice/real-estate-commercial-litigation/

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