Some Proposed Changes to Florida Lien Law in 2022

Typically, residential and commercial buildings are constructed for owners by general contractors. In turn, general contractors will employ subcontractors of various skills and disciplines. The owner will deal with and pay the general contractor for the construction services and materials. Subcontractors will then look to the general contractor for payment.

Generally, subcontractors do not have a contractual relationship with the owner. Their contract is with the general contractor. If the general contractor does not pay them, their only recourse is against the property for which they need a lien.

Construction liens are an important aspect of real estate law. Liens are security interests in property that secure the payment of obligations. A mortgage is a well-known example. Liens secure the payment for services and materials provided to construct or improve a property. In Florida, the only parties eligible to have a lien on a construction project are licensed contractors or sub-contractors.

Notice Requirements

An essential requirement for any lien is notice. A lienholder must give notice to the world in order for his lien to have priority over competing claims against the property.

Public notice is given by recording a Claim of Lien in the appropriate registrar, usually with the county in which the property is located. A copy of the claim must be given to the owner shortly after recording.

Since subcontractors have no primary contractual relationship with the owner, the owner does not necessarily know who is providing labor and material. Hence, subcontractors are required to deliver a Notice to Owner.

Florida Lien Law

Florida law [Florida Statutes §§713.001-713.37] has special statutory provisions governing liens for construction work. Florida House Bill 345 pending before the Florida legislature would make several changes, most of which are ‘housekeeping’ measures or definitions to correct or clarify technical issues. They are significant but not overly consequential.

Among the more consequential changes are:

• They clarify of computation of time deadlines

• They provide that work on multiple projects under multiple contracts with the same owner can be covered by one lien.

• They recognize partial lien releases and require lien releases to be notarized and include reference numbers and recording dates of the released lien.

Existing law requires that an owner, before commencing an improvement, must record a Notice of Commencement. The owner can terminate the Notice of Commencement by filing a Notice of Termination. The proposed statutory amendment would provide that a Notice of Termination cannot be filed until all lienholders on the project have been paid in full.

Notwithstanding the proposed changes, compliance with the Florida lien law remains complicated. Contractors are strongly urged to seek the consultation and guidance of an experienced real estate lawyer in Coral Springs with expertise in lien law.

Our lawyers at Benson Mucci & Weiss P.L. in Coral Springs, FL have many years of experience in commercial law and real estate law, particularly with the construction industry and liens. Contact us today to learn more.