Florida's Construction Lien Law

A person who works on your property or provides materials for the improvement of your property can seek payment for such services and goods from you.  This right to payment can be enforced against your property.  This can be done by the filing of a claim against your property under Florida law.  Such a claim is called a  "construction lien".  The construction lien acts as a form of security to ensure payment.

This ability to file a construction lien applies to all those who have worked on the property. This includes the contractor you hired to work on the property, all subcontractors, all persons (or businesses) which have supplied materials used on your property, and all laborers and professional service providers (such as architects, surveyors and interior designers).  Thus, even if you have paid the contractor you hired to work on your property the full amount due and the work was done, if the contractor fails to pay its subcontractors, material supplies, engineers, laborers, those individuals and businesses can file a construction lien against your property for the value of their services or materials supplied.

The result is that you could end up having to pay twice for the same work.  If you do not pay the persons or businesses that file construction liens your property could end up being sold to pay them.  This can only happen after a lawsuit has been filed against you and the property and pursuant to a court order.

Therefore, it is important that if the improvements to your property will cost more than $2,500.00 you take the necessary legal steps to protect yourself from the possibility of having construction liens filed against your property.  (If the improvements to your property will cost less than $2,500.00 a construction lien cannot be filed against your property if you pay the person or business you signed a contract with the full amount stated in the contract.  Only the contractor you signed a contract with can file a construction lien against your property in the event it is not paid).

If the amount of the contract is more than $2,500.00 you should:

1. File a Notice of Commencement (it is a pre-printed standard form) with the Broward County Records Division before work on your property begins.  You can get a copy of this form from your local municipal building department.  After it is recorded by the Records Division a certified copy of it must be posted on your property or an affidavit posted that states that a Notice of Commencement has been recorded with a copy of it attached.  Its purpose is to notify subcontractors, suppliers, laborers and others who perform work on the property who is the person who is to be informed if they are not paid.  The Building Code Services Division provides these forms to permit applicants, or click here for "Applications", to obtain a copy.
2. Obtain a Notice to Owner form from all subcontractors, suppliers, laborers and other service providers that are working on the improvements to your property.  The Notice to Owner states the name and address of the person or business doing the work or providing the supplies or services and the type of work, supplies or services.  In order to be effective to enable a construction lien to be filed, the notice must be provided to you prior to the work being done or the goods or services provided or within 45 days of the work starting or the supplies or services being delivered.  Additionally, it must be provided before you make final payment to your contractor.
3. Obtain from your contractor, every time you make a payment, an affidavit stating that all persons who have given you a Notice to Owner have been paid in full for their performance or goods up to that date or stating who has not been paid in full and the amount due them and for what (labor, services, goods).
4. Obtain from your contractor, before the time you make the final payment on the contract, an affidavit stating that full and complete payment has been made and that all subcontractors, suppliers, laborers and service providers have been paid in full.  If you determine that all such persons and businesses have not been paid in full then the affidavit should state who has not been paid in full and what amounts are owing to whom.  You may deduct the amounts owing those who have not been paid from the amount you pay your contractor.  But you must give your contractor at least 10 days advance written notice of your intent not to pay the full amount and to directly pay those to whom payment is shown to be due on the affidavit and the amount to be paid to each.  If your contractor then does not pay those to whom payment is due as shown on the affidavit, you can pay them directly.
5. Obtain, at the time you make each payment to your contractor, a written "Partial Release of Lien" or "Release of Lien" for all work performed to that date and all materials supplied to that date.  You should provide in your contract with your contractor that it is its obligation to obtain all partial or full releases of lien.  Otherwise, it is your obligation to obtain them from the subcontractors, suppliers, laborers and service providers.
6. If you are financing the home improvement and the financing institution is going to be making the payments directly to the contractor, you should arrange for the financing institution to be responsible for obtaining the "Release of Liens" from all the required parties.

As you can see, Florida's Construction Lien Law is very complex.  If any home improvement project is to be undertaken on your property involving a substantial amount of money you should consult a private attorney before entering a contract for the home improvement and also during the course of its completion as to what actions must be taken by you, and when, to protect yourself from the possibility of having to pay twice for the same services or goods.