As many people in Southwest Florida may already know, a construction lien is a claim that is lodged against a property by a contractor, subcontractor or material supplier who has not received payment for the work done on the construction or remodeling of that property.
According to Florida’s construction lien law, if a lien is filed against a property, there is a possibility that the property would be sold in order to clear unpaid dues to the contractor, subcontractor and material suppliers. In fact, even if a property owner pays the primary contractor who does not, in turn, pay the subcontractors or material suppliers, that property owner may have lose his or her property so that it can be sold to clear all pending dues.
To avoid this scenario, property owners who are planning to construct or remodel a property that is going to cost more than $2,500 need to take certain precautions. According to the Florida Department of Business & Professional Regulation, the precautions that the property owner should take include, but are not limited to, the following:
- File a Notice of Commencement with the Clerk of the Circuit Court in the county where the property is located before beginning the actual work.
- Obtain a list of all subcontractors and material suppliers from the primary contractor via a certified or registered mail.
- Obtain an affidavit from the primary contractor that lists all unpaid subcontractors and material suppliers before making the final payment.
- Obtain a Partial Release of Lien from subcontractors and material suppliers if the nature of work demands partial payments.
- Obtain the Release of Lien from subcontractors and material suppliers before making the final payment to the primary contractor.
If a lien is filed against a property, which is valid for one year, despite all precautions, the property owner can file a Notice of Contest of Lien within the one-year period during which the lien is valid and take the matter to court by forcing the lienor to file a lawsuit within 60 days of the Notice of Contest of Lien, unless that lienor has already filed a lawsuit.
The construction lien law is complex; therefore, even the Florida Department of Business & Professional Regulation recommends seeking legal guidance if a property owner is facing a lien on a property, or for any other specific problem related to the construction lien law.