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According to Florida law, those who work on your property or provide
materials, and are not paid-in-full, have 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 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.
This means if a lien is filed against your property, it could be
sold against your will to pay for labor, materials or other services
which your contractor may have failed to pay.
This document explains Florida Statute 713, Part 1, as it pertains
to home construction and remodeling, and provides tips on how you
can avoid construction liens on your property.
Protecting Yourself
If you hire a contractor and the improvements cost more than $2,500,
you should know the following:
·
You
may be liable if you pay your contractor and he then fails to pay
his suppliers or contractors. There is a way to protect yourself: A
Release of Lien is a written statement that removes your property
from the threat of lien. Before you make any payment, be sure you
receive this waiver from suppliers and subcontractors covering the
materials used and work performed.
·
Request from the contractor, via certified or registered mail, a
list of all subcontractors and suppliers who have a contract with
the contractor to provide services or materials to your property.
·
If
your contract calls for partial payments before the work is
completed, get a Partial Release of Lien covering all workers and
materials used to that point.
·
Before you make the last payment to your contractor, obtain an
affidavit that specifies all unpaid parties who performed labor,
services or provided materials to your property. Make sure that your
contractor obtains releases from these parties before you make the
final payment.
·
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. You must record
the form with the Clerk of the Circuit Court in the county where the
property being improved is located. Also post a certified copy at
the job site. (In lieu of a certified copy, you may post an
affidavit stating that a Notice of Commencement has been recorded.
Attach a copy of the Notice of Commencement to the affidavit.)
·
In
addition, the building department is prohibited from performing the
first inspection if the Notice of Commencement is not also filed
with the building department. You can also supply a notarized
statement that the Notice has been filed, with a copy attached.
The Notice of
Commencement notes the intent to begin improvements, the location of
the property, description of the work and the amount of bond (if
any). It also identifies the property owner, contractor, surety,
lender and other pertinent information. Failure to record a Notice
of Commencement or incorrect information on the Notice could
contribute to your having to pay twice for the same work or
materials.
Notice To Owner
Prior to filing a lien, a lienor
must serve the owner a Notice to Owner. The Notice to Owner must
state the lienor's
name and address, a description of the real property and the nature
of the services or materials being furnished. The Notice to Owner
must be served before commencing, or within 45 days of commencing,
to furnish the services or materials. A lien cannot be enforced
unless the lienor has served the Notice to Owner as described above.
Whose Responsibility Is
It To Get These Releases?
You can stipulate in the agreement with your contractor that he must
provide all releases of lien. If it is not a part of the contract,
however, or you act as your own contractor, YOU must get the
releases. If you borrow money to pay for the improvements and the
lender pays the contractor(s) directly, instruct the lender to get
releases before making any payments. If your lender then fails to
follow the legal requirements, the lending institution may be
responsible to you for any loss.
What Can Happen If I Don't
Get Releases Of Lien?
You will not be able to sell your property unless all outstanding
liens are paid. Sometimes a landowner can even be forced to sell his
property to satisfy a lien.
Who Can Claim A Lien On
My Property?
Contractors, laborers, material suppliers, subcontractors and
professionals such as architects, landscape architects, 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 does work on your home.
Contesting A Lien
A lien is valid for one year, unless
a lienor files a lawsuit to enforce the lien prior to the expiration
of the year. An owner has the right to file a Contest of Lien during
the one-year period. Upon the filing of a Contest of Lien, a lienor
must file a lawsuit to enforce the lien within 60 days. Failure of
the lienor to file the lawsuit renders the lien invalid.
Additional Tips On Home
Construction:
·
Verify that your contractor is properly licensed. Information
regarding licensing can be found below.
·
If
you intend to get financing, consult with your lender or an attorney
before recording your Notice of Commencement.
·
Insist that the contractor/remodeler secures a building permit and
adheres to all building codes and ordinances.
Information All
Construction Contracts Should Contain:
·
The
contractor's name, address, telephone number and contractor's
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 models
not available.
·
A
beginning date and completion date.
·
A
complete list of companies or individuals supplying the contractor
with labor or materials. Be 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:
Remember,
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 says, "We don't need to bother putting it in
writing."
Some contractors require a down payment of 10-30 percent of the
total and an additional payment at the halfway point. Pay only when
the work is done to your satisfaction and you have releases of lien
as described above. 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.
Cancellation Of Contracts
Some home repair/improvement contracts can be canceled in writing
(preferably by certified mail) without penalty or obligation by
midnight of the third business day after signing. They include:
·
Those
signed anywhere other than the seller's normal place of business.
·
Those
signed as a result of door-to-door solicitation, except emergency
home repairs.
·
Those
paid on an installment basis.
Other contracts are
binding as soon as they are signed, so be sure before you sign.
Things You Should Know
Before Starting
The most frequently cited complaints concerning home remodeling,
home improvements and home repair are cost overruns, missed
deadlines and inferior workmanship. Another persistent problem is
"fly-by-night" contractors who take deposits or payments before
finishing or starting work.
When you need something done to your home, choose a contractor
carefully. Be wary of door-to-door salespeople and telephone
solicitors promising "this-month-only" bargains. Make sure your
contractor is properly licensed and insured.
THE CONSTRUCTION LIEN LAW IS
COMPLEX AND CANNOT BE COVERED COMPLETELY IN THIS DOCUMENT. WE
RECOMMEND THAT WHENEVER A SPECIFIC PROBLEM ARISES, YOU CONSULT AN
ATTORNEY.
To register a complaint
(or learn if complaints have been filed against a prospective
contractor), contact the Florida Department of Business and
Professional Regulation's
Customer Contact Center at:
850.487.1395 or 800-342-7940. License verification is available 24/7
through the Customer Contact Center.
Or write to:
Florida Department of Business and Professional Regulation
1940 North Monroe Street
Tallahassee, Florida 32399-1027
Or visit online at:
www.MyFloridaLicense.com Search for a License, Permit or
Registration.
And by e-mail at CallCenter@dbpr.state.fl.us.
If you have problems with a contractor, try resolving your disputes
first with the company that sold you the service. If you are not
satisfied, try contacting the Hillsborough County Consumer
Protection Agency at 813-903-3430. You may also contact your local
building department or the Better Business Bureau. |
