Florida Lien Law Information
According to Florida Statute 713, Part 1, anyone who works on your property or provides materials and is not paid in full has a right to enforce their claim for payment against your property. This claim is known as a construction lien.
If your contractor fails to pay their subcontractors or material suppliers, or neglects to make other legally required payments, the people who are owed money may look to your property for payment — even if you have paid your contractor in full.
If a lien is filed against your property, you will not be able to sell it, and it could even be sold against your will to pay for the outstanding costs for labor, materials or other services.
Here are basic tips to help you avoid construction liens on your property. The Construction Lien Law is complex, however, so we recommend that you consult an attorney for any specific problems you encounter.
When you need something done to your home, choose a contractor carefully. Be wary of door-to-door salespeople and telephone solicitors promising bargains that are unusual or seem too good to be true. Make sure your contractor is properly licensed and insured, and insist that they secure a building permit and follow all codes and ordinances.
If you intend to get financing, consult with your lender or an attorney before recording your Notice of Commencement.
Notice of Commencement
A Notice of Commencement announces the intent to begin improvements, the location of the property, a description of the work and the amount of bond (if any). It also identifies the property owner, contractor, surety, lender and other important information.
You should always file a Notice of Commencement before beginning a home construction or remodeling project. The local authority that issues building permits is required to provide this form. The form must be recorded with the Clerk of the Circuit Court. You should also post a certified copy at the job site. In lieu of a certified copy, you may post an affidavit stating that a Notice has been recorded, along with a copy of the unrecorded Notice.
If you fail to record a Notice of Commencement, or provide incorrect information, you could have to pay twice for the same work or materials. Furthermore, the building department is prohibited from performing the first inspection if you haven’t filed the Notice of Commencement with them. You can also supply a notarized statement that the Notice has been filed, with a copy attached.
If you hire a contractor and the improvements cost more than $2,500 ($7,500 or more for A/C replacement), you should:
- Obtain a Release of Lien, which is a written statement that removes your property from the threat of lien. Before you make any payments, make sure you receive this waiver from all suppliers and subcontractors, and that it covers the materials used and the work performed.
- Request from the contractor, via certified or registered mail, a list of all subcontractors and suppliers who are providing services or materials to your property. If your contractor calls for partial payments before the work is completed, get a Partial Release of Lien covering all workers and materials used to that point.
- Obtain an affidavit that specifies all unpaid parties who performed labor or services, or provided materials to your property, before you make the last payment to your contractor. Make sure your contractor obtains releases from these parties before you make the final payment.
Contractors, labors, material suppliers, subcontractors and professionals such as architects, landscape architect, interior designers, engineers or land surveyors all have the right to file a claim of lien for work or materials. Always get a release of lien from anyone who works on your home.
You can stipulate in the agreement with your contractor that they must provide all lien releases. If it is not a part of the contract, or you act as your own contractor, you must get the releases.
If you borrow money to pay for improvements and the lender pays the contractor(s) directly, instruct the lender to get the releases before making any payments. If your lender fails to do so, they may be responsible for any loss.
All contracts should contain:
- The contractor’s name, address, telephone number and license number.
- A precise description of work and materials to be supplied. The contract should specify the grade of construction, flooring and trim materials to be used. Don’t accept the phrase “or equivalent” — the contract should specify appliance models and alternates for those models if they are not available.
- A beginning date.
- A completion date.
- A complete list of companies or individuals supplying the contractor with labor and materials. Make sure they are insured so you are protected against theft or damage to their supplies or work.
- Financing information and the payment schedule.
- All necessary building permits or licenses.
- Agreement regarding site clean-up and debris disposal.
- All warranty agreements.
Ask for explanations and clarifications of legal terms or confusing language. Be sure you understand completely what you are signing — promises are difficult to enforce unless they are in writing. Even for small jobs, have a written contract spelling out the details. Be wary of anyone who does not want to put it in writing.
Some contractors require a down payment of 10-30% of the total, and an additional payment at the halfway point in the project. Pay only when the work is done to your satisfaction and you have any and all lien releases. If the completion date is critical, like a swimming pool planned for summertime use, link payment to on-time performance. Changes to a contract after construction has begun can cost you. Specify in the contract how changes are to be handled, and insist that all change orders be in writing and signed by both you and the contractor.
Some home repair / improvement contracts can be cancelled in writing (preferably by certified mail) without penalty or obligation by midnight of the third business day after signing. They include:
- Contracts signed anywhere other than the seller’s normal place of business.
- Contracts signed as a result of door-to-door solicitation, except emergency home repairs.
- Contracts paid on an installment basis.
Other contracts are binding as soon as they are signed, so be sure before you sign.