Are You Protecting Your Lien Rights?

By Lauren White, RCS Reporter.

Understand the common mistakes contractors make regarding lien rights and how to avoid them.

Construction lien laws protect contractors and their right to payment.  However, mistakes can be made that revoke a contractor’s lien rights. These mistakes are easily preventable with the guidance of an experienced attorney

Cotney Construction Law shares the five most commonly made mistakes regarding lien rights:

The first mistake is not serving notice to the owner.  For contractors who are not in privity with the owner, a Notice to Owner must be served within 45 days of the start of the project.  “Not serving the Notice to Owner within the given time period and to the appropriate parties alone can put a contractor’s lien rights at risk,” Cotney Construction Law explains.

Contractors claiming the wrong amount is the second mistake that puts lien rights in jeopardy.  “In Florida, claiming the wrong amount on a construction lien is considered to be filing a fraudulent lien, which is a 3rd degree felony,” Cotney Construction Law shares.  A contractor may be liable for damages such as attorney fees and court costs if they were found filing a fraudulent lien. 

Failing to submit a Sworn Statement of Account to the property owner is the third mistake.  According to Cotney Construction Law, this document “sets forth the labor and materials furnished along with the amounts due and owing.”  The statement must be delivered within 30 days of the written request, otherwise, the lienor could lose their lien rights. 

The fourth common mistake contractors make is missing deadlines.  Cotney Construction Law explains, “Contractors who wish to foreclose on their construction liens must file suit within one year of the date the Claim of Lien was filed.”  This is true in most cases, however, an owner can file a complaint for an order to show cause, or a notice of contest of lien and shorten the one-year time period.  

Once the complaint for an order to show cause is filed by the owner, a summons is issued by the clerk of court to the contractor.  The contractor must show cause within 20 days, and must also justify why the lien shouldn’t be enforced. “If the owner files a notice of contest of lien, the contractor must file suit to enforce the lien within 60 days of notification,” Cotney Construction Law clarifies.

The final mistake is not being properly licensed.  Cotney Construction Law explains, “The State of Florida has established that contractors, subcontractors, material suppliers, equipment rental companies, laborers and professionals have lien rights.”  However, if a construction professional isn’t licensed properly, they are unable to file a lien in Florida. One way for contractors to protect their lien rights is to ensure they are properly licensed, because contractors don’t have lien rights if they are not licensed. 

Consult an experienced construction attorney like Cotney Construction Law for more information on lien rights and the mistakes to avoid so you can ensure your lien rights are safe.  

Read the original article. 

Disclaimer: The information contained in this article is for general educational information only.  This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.