In construction, the risk of facing an unjustified lien from a subcontractor can be concerning. These liens can create both financial and reputational challenges. Fortunately, there are steps contractors can take to reduce this risk and protect their interests.
Understanding Construction Liens in Florida
A construction lien, also known as a mechanic’s lien, is a legal claim against a property for unpaid work or materials. Subcontractors have the right to file these liens if they’re not paid, even if the general contractor fulfilled their obligations. This can arise from disputes between subcontractors and property owners due to payment miscommunication.
Steps to Prevent Unjustified Liens
While complications that lead to construction liens do arise on occasion, there are strategies contractors can follow to reduce the likelihood of running into them.
- Use Proper Contracts: Clearly written contracts are a must. Ensure that all agreements with subcontractors include detailed payment schedules, scopes of work, and lien waivers.
- Monitor Payments: Keep track of all payments made to subcontractors. This includes maintaining detailed records and receipts of each transaction.
- Require Lien Releases: Before issuing final payment to a subcontractor, request a lien release. A lien release is a document that confirms a subcontractor has been paid in full and waives their right to file a lien.
- Communicate With Property Owners: Communication with property owners ensures that everyone is in agreement. It also helps in addressing concerns early on, which reduces the odds of disputes escalating to the point of lien filings.
Preventing Construction Liens
Protecting yourself from unjustified liens requires proactive management of contracts and payments. By taking the right steps with all parties involved, it becomes easier to ensure smoother project operations.