Foreclosing a Claim of Lien in Florida: What You Need to Know

Why would someone foreclose on a claim of lien? Simply put, to secure payment. Once you've realized the property owner isn't going to pay, you are now asking the Court to force the sale of the property you worked on so that the proceeds can be used to pay you for your work.

Florida’s Construction Lien Law is a statutory scheme, largely governed by Chapter 713, Florida Statutes, that creates a system of notices, which if used properly, provide a balance of protections for owners, contractors, subcontractors, sub-subcontractors and material suppliers.

The most important thing for you to know is that the Florida courts strictly construe the Construction Lien Law, requiring careful compliance with the statutory time periods and other requirements governing service of all required notices. By far the most important time period is the one in which you must file your lawsuit. Once you file your claim of lien, the clock starts ticking and you have 1 year to file suit. If you don't, your lien become invalid; and you may lose your right to sue forever.

Some other important things for you to know:

Notice of Commencement. As a property owner, it is imperative that you record a notice of commencement with the local clerk’s office before the project begins or as soon thereafter as possible. An acceptable form of the notice of commencement is found in the body of the statute (Fla. Stat. § 713.13) and in many local clerk’s offices. The notice of commencement will generally include:

• The address of the property.

• The nature of the work being performed.

• The names and addresses of the owner, general contractor, and surety

  
  

You're probably thinking to yourself, "why would I want to help people place a valid lien on my property?” It is because the notice of commencement operates to hold every potential lienor to the strict timelines in the statute. Failure to record a notice of commencement or recording an inaccurate notice has become an exception that late lienors may use to redeem their late notices to the owner, which would otherwise wholly bar their lien claims. See Suchman v. Nat’l Hauling, Inc., 549 So. 2d 200 (Fla. 3d DCA 1989).

The Claim of Lien. A lienor who either has privity with the owner or who has preserved its lien rights by properly serving a Notice to Owner can record a Claim of Lien in the public records of the county where the property is located. The Claim of Lien must be recorded no later than 90 days from the date the lienor last furnished labor, services or materials to the project. The Claim of Lien must also be served on the owner and on any other proper parties to be served within 15 days of its recording. The law provides penalties for filing a false, fraudulent or exaggerated Claim of Lien. This will be one of the surest ways to defend against your lien, so make sure it is accurate and honest.

Filing Suit. As discussed above, you have one year to foreclose a construction lien. The one-year time period runs from the date on which the Claim of Lien was recorded. The law also provides a procedure, which allows an owner to record and serve a Notice of Contest of Lien. If a lienor is served with such a Notice, he or she then has only 60 days from the date of service of the notice within which to file suit. This is a procedure, which can be utilized by an owner who needs to clear the title to the property or wishes to force a lienor’s hand, particularly if the owner has reason to believe that the lien may be invalid. Florida law provides for prevailing party attorney’s fees in lien foreclosure actions.

Notice of Contest and Discharge of Lien. Owners can apply pressure on lienors to act on or surrender their claims by recording in the local clerk’s office a Notice of Contest of Lien in the form provided in the body of the statute (Fla. Stat. §713.22(2)). The notice of contest shortens the time for the lienor to institute its action to sixty (60) days, or else extinguishes the claim of lien automatically. Another powerful tool for owners is the filing of a Show Cause Complaint under Fla. Stat. §713.21(4). Under this subsection of the statute, an owner may go on the offensive and file a complaint against a lienor alleging that the lien is invalid for any number of reasons, upon which the clerk will issue a summons to the lienor to show cause within twenty (20) days why the lien should not be extinguished. If the lienor fails to respond, the court can order the cancellation of the lien.

The Takeaway: Florida’s Construction Lien Law is not simple. However, it can be a powerful defensive or offensive tool to those who know how to navigate it. Liens are both inherently difficult to preserve and enforce, while also operating as an encumbrance on the property and creating immense pressure on owners, lenders, or sureties to keep the property free and clear of any such clouds on title. 

We can help you prosecute your lien claims and perform related necessary due diligence. We advise owners, developers, and contractors on risk mitigation throughout the life of a project, including dispute resolution services.