Florida Lien Law – What Does Your Contract Say About Who Pays Subcontractors?
Florida’s lien law is made up of several parts, each of which governs liens in different types of businesses or industries. The first part of the lien law – which covers construction liens – covers construction liens, an important subject for anyone involved in a construction project, whether a contractor, subcontractor, or property owner.
Mandatory Provision for Direct Contracts – Lien Law Section 713.015
Among the important provisions of Florida’s Lien Law is Section 713.015. Under this provision of the law, certain contracts between some property owners and contractors must not just contain, but also emphasize, specific information about the formation and payment of construction liens.
Section 713.015 provides that certain information must be included in certain construction contracts. Generally, the necessary information includes the property owner’s acknowledgement that:
- contractors who are not paid in full may enforce their claims against the owner’s property by means of a construction lien
- subcontractors, sub-subcontractors, material suppliers, and others who are not paid in full may also enforce their claims against the owner’s property. (This is true even if the owner has already paid the contractor, in full).
- Since the owner’s property can potentially be sold to pay these liens, the owner should require, in the contract, that the contractor will not be paid before written proof that liens have been released has been provided.
Section 713.015 provides the exact language that contracts that it pertains to must include. This language must appear in the contract in bold face, in at least 12-point font, and with all upper-case lettering.
Who is Affected by Lien Law Section 713.015?
Section 713.015 applies to direct contracts between owners and contractors for improvements to single or multiple family dwellings (up to and including four units) that involve more than $2,500.
The following definitions apply in this context:
- A direct contract is a contract between the property owner and another person.
- An owner is someone with an interest in real property who enters into a contract to improve the property. A homeowner is a property owner, as is a landlord. A condominium association is also a property owner, to the extent of improvements made to common areas or property of the association. Under Section 713.01 of Florida’s Lien Law, political subdivisions, agencies, departments of the state, municipalities, or other governmental entities are not owners.
- A contractor is someone who enters into a contract with an owner for improving the property, or someone who takes over from a contractor to finish work remaining under the contract. Contractors may include architects, landscape architects, and engineers.
- Contractors do not include either materialmen or laborers.
- Materialmen are people who furnish materials needed for the improvement project.
- Laborers are people who perform work, including labor or services, on the property. Under Florida Lien Law, laborers generally include all those who work on a project, other than architects, landscape architects, engineers, surveyors, mappers, etc.
Want to Know More About Construction Liens in Florida?
Importantly, Section 713.015 of Florida’s lien law also requires that contracts state, in at least 12 point font, in bold, that Florida’s lien law is complicated and that consulting with an attorney is recommended. The Fort Lauderdale construction lawyers at Sweeney Law focus on this and other areas of construction law. If you would like to learn more about the intricacies of Florida’s lien law, or have particular questions about any contract or claim that involves a construction lien, contact Sweeney Law.