Construction Liens for Building Officials 2018 By: Larry R. Leiby, Esq. Florida Bar Board Certified Construction Law Expert Author, Florida Construction Law Manual Published by Thomson-Reuters-West in print and on WestLaw Adjunct professor teaching construction law at FIU LAW

What is a construction lien? Where does it come from? – history

What property can be liened. Not governmentally owned, not easements What property can be liened? Not governmentally owned, not easements. Owned parcels, leaseholds; condominiums; insurance proceeds (Fla. Stat. 713.32) are lienable Who has the right to lien? Fla. Stat. 713.01 Chain of privity husband wife

Can lien rights be waived in a contract? In advance of doing the work? Fla. Stat. 713.20 (2) Are construction lien rights an exclusive or cumulative remedy? Fla. Stat. 713.30 What are the duties of an owner under the construction lien law? Record and maintain an effective NOC Make proper payments Obtain a contractor’s final affidavit

What is a notice of commencement (NOC) and what is in it? Fla. Stat. 713.13 Not for subdivision improvements or professional design contracts Who signs and records the NOC? 713.13 1)a. When should the NOC be recorded? Before work starts and after the construction mortgage is recorded

What is a notice of termination of NOC? Fla. Stat. 713.132 – note also expiration of NOC What are the duties of a professional lienor to obtain a lien? Record Claim of lien within 90 days of last work Serve copy on owner within 15 days of recording What are the duties of a subdivision improvement lienor to obtain a lien? Fla. Stat. 713.04 Record claim of lien within 90 days of last work Serve copy on owner within 15 days of recording (FKA?)

What are the duties of a laborer in order to obtain a lien? Personal labor only Record claim of lien within 90 days of last work Serve copy on owner within 15 days of recording What are the duties of a prime contractor in order to obtain a lien? Record Claim of lien within 90 days of last work Serve copy of owner within 15 days of recording Serve contractors final affidavit at least five days before filing suit What is a contractor’s final affidavit and who cares? Fla. Stat. 713.06 (3)(d)(1) Proper payments

What are the duties of a non-privity lienor (nonprofessional and non-subdivision improver) in order to obtain a lien? Fla. Stat. 713.06 (2) Notice to owner served within 45 days of FIRST work or delivery of materials Record Claim of lien within 90 days of last work Serve copy of owner within 15 days of recording

What is a notice to owner (NTO)? Good news – bad news Written, not verbal What must be included in a NTO? Look at form

Who gets served with the NTO? Owner - required Others listed in the NOC Parties between lienor’s customer and owner (e.g., G.C.) Others who may help you get paid What does “served” mean in the Construction Lien Law? Fla. Stat. 713.18 (effectively it means “delivered”) Multiple owners; Condominium, agents When must the NTO be served (if required)? Should one wait until the customer goes past due? 40 or 45 days from first work or delivery, depending on method of service. No excuse for being late

How do you prove service of a NTO? Evidence of delivery - Return receipt card or postal record for certified mail What if a new scope of work is started as an extra or separate contract? Must I serve a new NTO? What was communicated in the original NTO? What is a claim of lien? Fla. Stat. 713.08 – Notice to the world of the claim

How much may be claimed in a construction lien? No attorney fees, restocking charges, lost profit, unperformed work Where is a construction lien recorded? County Recorder in the County(ies) where the project is located What is a fraudulent lien? Fla. Stat. 713.31 – willful exaggeration or grossly negligent exaggeration Safe harbor for attorney preparation so long as no misinformation to attorney

How long does a claim of lien last? 1 year, UNLESS Fla. Stat. 713.22 – Notice of contest, summons to show cause, payment/satisfaction; arbitration What good is a construction lien? Secures indebtedness to extent of owner’s equity – not a panacea Ability to retake uninstalled materials Fla. Stat. 713.15 Claim for undisputed amounts owed for 30 days Fla. Stat. 713.346

What is the priority of a construction lien vis a vis other liens, mortgages, deeds? First in time, first in right. Example: 1) Mortgage 2) Notice of commencement 3) Lien of architect 4) Lien of subdivision improver 5) Deed 6) New mortgage 7) Lien of contractor 8) Lien of electrical sub 9) Lien of plumbing supplier 10) Lien of laborer

What is an affidavit of abandonment and notice of recommencement? Fla. Stat. 713.07(4) What kind of release should be given/received when receiving/making payment? Fla. Stat. 713.20 – statutory forms Release for dollars (ten dollars and other consideration?) Release through time Release of more than just lien rights (cumulative remedy) Final or partial (don’t take great comfort in the title) Timing – before, after, or in exchange for payment Conditional releases Copies – intend to be an original? Must a recorded release be given?

Can I transfer a lien off of my property to alternate security? Fla. Stat. 713.24 If the lien is transferred does it impact who I may or should sue for enforcement? Oh yeah Are there any criminal penalties in the lien law? Fla. Stat. 713.345 Misapplication of undisputed payments Fla. Stat. 713.35 Known false statement about status of payments Fla. Stat. 713.31 Knowingly filing a fraudulent lien

What is an “exemptory payment bond” (private work)? Fla. Stat. 713.23 What must be done to make claim on the exemptory payment bond? Preliminary notice – notice of nonpayment What is a conditional payment bond? Fla. Stat. 713.245 – Does not exempt property from liens

How do I avoid having to know all this stuff? Get cash in advance.