how to navigate construction leans2

Navigating Construction Liens

by: Ronnie Bitman, Managing Partner  |  September 8, 2020

Construction, and businesses supporting construction, were not generally affected by closure orders due to COVID-19. The construction industry is considered essential to the welfare of the state’s citizens, and continues to move forward. However, economic pressures brought on by the pandemic may cause first- and second-tier contractors to be less willing to wait for payment.

The protection of those providing labor and/or materials to improve a property is provided by The Florida Construction Lien Law, formerly known as the Mechanic’s Lien Law. This pertains to the appropriate payment for renovation or improvement work provided to a privately-owned property such as a home or commercial building. Federal, state, county and municipal properties are exempt from this law.

A construction lien can be recorded for non-payment from the owner to the contractor for completed work on the private property. Once filed, a construction lien foreclosure action can result in the forced sale of the property to pay the debt.

The law not only protects the contractor but the subcontractors, sub-subcontractors and material men, allowing them to seek payment directly from the property owner. However, even as the statute permits both a contractor and a subcontractor to maintain a construction lien for the same work, it also provides safeguards against a double recovery from the property owner.

Another consideration for contractors, subs and suppliers is the question of what exactly constitutes an improvement. While some work and supplies on a construction site obviously improve the property, such as building materials and actual construction, other work such as cleaning and maintenance may not be protected in a Florida court. For tenant improvements, the landlord may be exempt from liens if the lease executed between the landlord and tenant prohibits such liability.

While The Florida Construction Lien Law creates equity for tradesmen and material suppliers, the law is not easy to navigate and includes notifications, licensing and compliance requirements as well as several specific deadlines. These complications make appropriate legal counsel necessary for a successful action.

Bitman O’Brien & Morat has counselors with broad knowledge and experience who can assist you in navigating construction liens. Bitman O”Brien & Morat also has expertise in employment, contracts/corporation, personal bankruptcy, partnership disputes and small business issues. Please contact us at 407.815.3110 or visit bitman-law.com.