A construction lien is a legal instrument used to ensure that contractors are paid for their services. Construction liens, also known as a mechanic’s lien, safeguards workers by preventing real property from being sold or refinanced without just compensation to those that contributed to it. When filing a construction lien with a local county recorder’s office, certain key details must be provided. These include the claimant’s identity, property information, work performed, dates of work, and amount owed. Lastly, the property owner must be notified about the lien, often via certified registered mail. More information on construction liens, generally, can be found by reviewing Florida Statute 713.06.
If a construction lien is filed against your property, it is essential to work with a qualified attorney who can assist in preventing involuntary sales due to outstanding debts and maintaining clean title for future property transactions.
6 Ways to Deal with a Construction Lien in Florida:
- Pay the lienor for a satisfaction of lien.
The resolution can sometimes carry more value than the fight. Being “right” isn’t always the most cost effective. While the most simple, this option is often out of reach for many due to insufficient funds.
- Transfer the lien to a bond.
A bond is a debt obligation that accrues periodic interest until the bond reaches maturity. Transferring the lien to a bond doesn’t resolve the lien, it just transfers the collateral from the real property to the bond. While this allows for a clean title and easier transactions, a bond isn’t always the most practical due to the need for advanced payment to the court.
- Record a Notice of Contest of Lien.
A Notice of Contest of Lien shortens the limitations period to foreclose the lien from 1 year to 60 days. This approach is recommended because it is quick and cost effective. In many cases, if a lien holder forecloses within 60 days, it is likely that they would have eventually foreclosed. This solution accelerates the process.
- Get a judgment from a court declaring the lien invalid.
According to Fla. Stat. § 713.31, a lien is fraudulent or inaccurate if it is misrepresented or overstated. An inaccurate lien is invalid and therefore likely unenforceable. However, this solution requires filing a lawsuit which may prove costly, burdensome, and time consuming.
- File a statutory 20-day order to show cause complaint.
This procedure requires the lienor to foreclose within 20 days from the service of the summons to preserve their lien rights. However, recent case law suggests limitations when the lienor fails to serve notice to the owner, making this approach less straightforward. When pursuing the 20-day order to show cause complaint, in an attempt to discharge a lien, it is recommended to refrain from alleging the lien was not properly perfected. Instead, a more successful route may be to think of other successful paths such as the Notice of Contest of Lien. This option would prove beneficial if the objective is to shorten the lienor’s limitations period to foreclose on the lien. A Notice of Contest of Lien can be more affordable and provide for a quicker process while providing similar results.
- Prove that the lien was filed past the statutory time period.
According to Florida’s Construction Lien Law, contractors have up to 90 days, since the last day that their work was performed, to file a lien. If a lien is filed outside of this time frame, the lien is potentially invalid. If viable, this can be an easy and straightforward strategy to prove that a lien is void.
Important Next Steps:
Navigating construction liens is crucial in Florida’s rapidly growing real estate industry. A clear title is a prerequisite for selling land in Florida and a lien may delay or cancel profitable transactions. Don’t let a lien delay you, allow one of our experienced attorneys to assist you in navigating which of these approaches is most suitable for your property needs.
