Securing payment for work provided in the construction industry can at times be a job on its own. With concerns about late or unreliable payment or the potential of payment missing altogether, options that provide you, a stakeholder in a construction project, with security, such as a mechanics lien, are invaluable.
Filing a mechanics lien is one of the most reliable and cost-effective options to obtain timely and accurate payment, but between state-specific regulations and complicated forms, it can be a daunting and time-consuming process.
At CRM Lien Services, we specialize in ensuring that you get paid quickly and reliably. We can prepare and file mechanics liens for you, taking into account Florida state-specific rules and regulations.
In this article, we provide a guide on Mechanics Liens in Florida, and we answer all the commonly asked questions about how Mechanics Liens work in Florida.
What is a Mechanics Lien?
A Mechanics Lien, also known as a Construction Lien, is a guarantee of payment for builders, contractors, construction firms, or any other stakeholders involved in a construction or property improvement project. In situations where a party involved in the process is concerned about non-payment for materials or services or is struggling to secure payment, the Mechanics Lien is used to provide the unpaid party a security interest in the property they have worked on. Mechanics liens only attach to real property, such as land, houses, or other buildings, and they are attached to the title of the property. When a Mechanics Lien is perfected – a suit of foreclosure is opened and this could result in a foreclosure of the property. In this case, the unpaid balance that is owed to the claimant will be covered by the sale of the property itself.
How does a Mechanics Lien work in Florida?
Mechanics Lien Florida: In Florida, mechanics liens can be filed by direct contractors, subcontractors, material suppliers, equipment lessors, and laborers, so long as they are performing work for the “permanent benefit” of real property. Additionally, professionals who are deemed to be involved in the improvement of real property, such as architects, engineers, and surveyors, can also file mechanics liens. The act of filing is known as registering or recording a claim of lien. Claims of lien are recorded in public records offices so that any relevant parties or individuals can see the pending claim.
If you are a contractor working on a house without a written contract, Florida law does not prevent you from filing a mechanics lien. The law recognizes any arrangements, including oral, express, or implied contracts. In other words, so long as an agreement between you and the property owner exists and is valid, there is no specific form that it needs to take.
There are a few deadlines and limitations that attach to this type of lien, depending on your status.
If you are a general or prime contractor, with a direct contract with the property owner, you are not required to provide any preliminary notice before filing a mechanics lien. You may however be asked by the owner to provide a list of all subcontractors and suppliers you have hired, which you would have 10 days to do from the requested day.
Once you have decided to file a lien in Florida you must do so within 90 days of the last substantial work you performed, referred to as “furnishing labor or materials” to the project. Once you file a lien, you have 15 days to serve a copy of it to the property owner. Finally, the lien will be valid for 1 year from the filing date, during which time it must be paid or enforced in court. This timeline can be shortened to 60 days by the property owner if they file a “Notice of Contest”; the 60 days will run from the date of the notice. Alternatively, if you are served with a notice to show cause, which acts as a way to contest your lien claim, you must enforce the lien in court within 20 days of the notice.
If you are a subcontractor or supplier on a construction project and you do not have a direct relationship with the owner, you must begin by providing a preliminary notice known as a Notice to Owner, which we explain below. This must be served through certified mail either within 45 days of providing the first labor or materials, within 45 days of work starting on making specialty materials or before the owner’s final payment to the general/prime contractor under the contract. The relevant date will be whichever is soonest.
If you are a sub-sub-contractor, your deadlines are within 45 days of first commencing work or furnishing materials, or before final payment to you by the subcontractor who has hired you, whichever is soonest. Following this, you will be subject to the 90 days mechanics lien filing deadline and the 1-year enforcement deadline, in the same way, a prime contractor is.
Additionally, Florida law is strict when it comes to licensing, in that if the work performed requires a license, then you must be a licensed contractor to file the mechanics lien.
It is important to be knowledgeable on the statutory requirements of lien law in Florida, or to partner with a service like CRM, who are equipped and experienced in Florida’s Lien Law. As a quick reference, you can check out our 50 State Guide which will provide you the exact steps required to protect yourself under lien law based on the type of work you are doing and your role on the project. We also recommend reading the Florida State Statutes on Lien Law, especially if you are doing many different types of construction projects such as private, public, or residential jobs.
With our assistance at CRM Lien Services, you don’t have to worry about all the nitty-gritty details of Florida lien law. You can simply provide a few pieces of basic information regarding the job you are working on, and we take care of everything else to make sure your lien rights are secured so you can get paid. Additionally, you won’t need to involve an attorney unless or until the lien must be enforced in court, which makes our services much more affordable than what a construction attorney would charge. To submit your order for a Mechanics Lien in Florida, please fill out our Mechanics Lien request form here.
What is a Notice to Owner in Florida?
Notice to Owner Florida: The Notice to Owner (NTO), also referred to as a preliminary notice or a notice of right to lien, is a document that, in Florida, needs to be sent out to a property owner by sub-contractors and sub-sub-contractors.
It requires a significant amount of information, including the owner’s name and address, a description of the materials and services, a property description, and the name and address of the hiring party or business. On top of this, the notice must include certain standard explanations and warnings required in law, which can take up several paragraphs, and are intended to ensure the owner is aware of their rights and how to protect against a lien.
If the NTO is not sent within the required deadline as covered above, you will lose the right to file a mechanics lien.
On top of support with filing a Mechanics Lien, we also handle preliminary notices and Notice to Owner at CRM. We make the process of securing lien rights simple and straightforward. All you have to do is order a Notice to Owner (AKA Preliminary Notice) on our website and provide a few pieces of information regarding the project you are working on, and then we will do all the work to research, verify, prepare and serve the notice on your behalf.
What happens when a Claim of Lien expires in Florida?
As mentioned above, mechanics liens are only valid for a maximum of 1 year, and if you still have an unpaid balance after 1 year, you must perfect the lien before it expires. Certain notices or responses from the owner or other parties to the project may shorten the deadline for enforcing the lien, which is something to keep in mind.
If a year has passed and the lien has not been amended, perfected, or released, then the lien claim will expire and you will no longer be able to enforce it in court to recover the sum attached to it.
Not all mechanics liens result in taking a property owner to court, as often the act of filing will result in prompt payment. It is also possible to set up the claim in a way that ensures that final payment is exchanged for a discharge of the claim of lien, meaning it is released from the property title after payment. This is the best course of action as not removing a claim of lien after the property owner has paid could lead to you incurring extra costs.
How do I file a Mechanics Lien in Florida?
There is no particular approved mechanics lien template that is required by the Florida State Statutes that must be used when filing a claim of lien, but there is a strict list of information that needs to feature on the submitted document. If anything is missing from the lien, or there are any mistakes concerning the information, the claim runs the risk of being disregarded.
Some of the information that must feature includes:
• A clear description of the real property
• A clear description of the services or materials provided
• The first and last day of furnishing labor or materials
• The payment due that remains outstanding
• The total value of the contract
• Preliminary notice dates
In addition, there are legal warnings that should be included at the end of the document.
Finally, the mechanics lien must be notarized to be valid and must be recorded with the county recorder’s office, in the county where the job is located. Individual counties in Florida also have distinct formatting requirements.
In terms of how much it costs to file a mechanics lien independently in Florida, the particular charges vary depending on the county and depending on the amount of supporting documentation and volume of your paperwork. Prices can start at $10 for the first filed page and an additional $8.50 for each extra page. This includes all attachments and any cover sheets.
If you choose to work with us, we will ensure that all formatting and filling requirements are taken care of and that your Mechanics Lien is valid and acceptable with the county recorders office.
Get in touch
At CRM, we have been serving customers all across the country with required reference documentation for claims of lien since 1986. We have a wealth of expertise, are licensed and insured, and our team is made up of highly knowledgeable document processors.
If you’re looking for a straightforward process for filing a mechanics lien give us a call or shoot us an email. We would love to work with you and help you lower your risk and get paid fast!
