The construction industry in Florida is one of the busiest in the nation, with over 212,000 single-family homes built in 2022, according to the U.S. Census. The industry operates under a specific set of rules and regulations, especially when it comes to financial transactions and securing payments. One important aspect of this is the construction lien process.
A construction lien, often known as a mechanic’s lien, is a claim made against a property by a contractor or subcontractor who has not received payment for work done or materials supplied. In Florida, the process of filing a construction lien involves several key steps. These steps ensure that all parties involved in the construction process have a fair opportunity to receive payment for their work.
Step 1: Serve the Notice to Owner
The process begins with serving the Notice to Owner. Contractors and subcontractors must send this notice to the property owner within 45 days of starting work or delivering materials. This notice serves as a formal declaration of participation in the project and the intention to file a lien if necessary. It is an important step as failing to send the NTO can result in the loss of lien rights.
Step 2: File the Lien
If payment is not received, the next step is to file the lien. This must occur within 90 days of the last day of providing labor, services, or materials. The lien must include a detailed description of the work performed or materials supplied, the amount due, and the property’s legal description. It is important to file this document with the appropriate county recorder’s office.
Step 3: Enforce the Lien
After filing the lien, the claimant must enforce it within one year. This enforcement involves filing a lawsuit to foreclose on the lien. If the claimant does not take legal action within this timeframe, the lien expires and becomes unenforceable.
It is important for contractors, subcontractors, and material suppliers to understand and follow this process carefully. Timely and accurate action at each step ensures the protection of their financial interests. By adhering to the outlined steps, industry professionals can effectively manage their payment rights and mitigate the risks of unpaid work.