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Construction

Protecting Yourself Under Florida’s Construction Lien Law

19 Aug 2015

 

Under Florida’s Construction Lien Law, any individual or entity who performs services for the improvement of the property and who is not paid for said services, including labor and materials, can place a lien on the property. Property owners should familiarize themselves with this Florida law in order to protect themselves from the severe damage a lien can do. A lien can result in long, drawn-out legal battles or even in the seizure of the property. What follows is a short list of critical points concerning how to safeguard the value and your ownership of property under Florida’s Construction Lien Law.

 

The Risk

Hiring a contractor to replace a roof, for example, will entail the services of subcontractors hired by said contractor. If all goes well, the job is performed to your satisfaction, and payment is transferred. Under this law, however, even if the contractor is paid in full for all services rendered, if the contractor fails to pay the subcontractor, then the latter can place a lien on the property worked on. This imposition can be made by individuals working for said subcontractor, or the company itself. For more information, visit Marina Title’s Residential page.

 

Notice of Commencement

First, filing a Notice of Commencement is crucial. This document identifies the property to be improved, describes the conditions thereof, and designates the name and address of the owner, contractor, lender and surety (should there be a payment bond in play). This notice requests from the contractor a list of potential lienors and the obtaining of lien releases and final payment affidavit. Recorded with the clerk’s office, a certified copy of this notice must be posted at the jobsite. Failure to do so can lead to double-payment for labor and materials.

 

Notice of Owner

The lienor is identified by a Notice to Owner, which contains a description of the materials and services provided, as well as the property in question. This document must be served to each party above the lienor. A subcontractor, for example, must serve this notice to both the contractor and the owner of the property. Potential lienors are granted up to forty-five days after onsite work has begun, and before payment for services rendered has been made, to provide a Notice to Owner.

Unfortunately, subcontractors are not required by law to file a Notice to Owner, identifying themselves. This is why it is essential for real estate owners to obtain a list of the contractor’s potential lienors by filing a Notice of Commencement.

 

Payments

If the contract dictates that progress payments be made prior to the completion of the work, it is recommended that the owner obtain partial lien releases from the contractor and any other individuals or entities whom are named in the above-described contractor’s potential lienors list or who provided a Notice to Owner. This should be done before making any partial payment. Furthermore, any final payments made by the owner should be preceded by a final payment affidavit from the contractor which clearly states that the work was completed to full satisfaction and that lienors were paid in full. Once this affidavit and the final lien releases are secured, final payment can be made with peace of mind.

The professionals at Marina Title offer their knowledge and expertise concerning deeds, titles and other matters pertaining to the intricacies of Florida real estate. Contact us by email at info@marinatitle.com, or by phone at 1 (800) 610-4750.

 

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