The Basics Of Lien Foreclosure
One powerful tool that Florida law allows you to use to help make sure you get paid on your construction projects, is the ability to lien property. This is not just the ability to lien, as many creditors have, but includes the power to actually foreclose on property if construction projects are not paid for on time (at at all).
Notice of Commencement
One of the most important steps to liening, and foreclosing on property, happens before there is even a problem in the first place—before the project has even started. It is the notice of commencement, filed in the public records. This notice will help give your lien priority over other lienors.
This notice of commencement date allows any lien you file later on to “relate back” to when the commencement was filed. This can ensure that your lien has priority over other liens that may have been filed against the property, between the time you start the project to the time you are forced to foreclose your lien.
Not in Contractual Privity?
There are many actors on a construction project that aren’t in contractual privity with the property owners, but who are also working on the construction project. If there is no contract between the owner and the construction company or subcontractor, the subcontractor must provide a “notice to owner,” in order to maintain lien rights.
Filing the Lien
If a problem arises—and that problem usually involves nonpayment for the work provided—all of the above steps entitle the owner to file a claim of lien. The claim can be filed anytime, but no later than 90 days after work was done on the construction project. Once filed, the lien must be served on the owner within 15 days.
Filing a Foreclosure of Lien
Once the lien has been filed, another important time period starts: The time to actually start your foreclosure action. The law says that you have only one year from the date of filing the lien, to file your action to enforce that lien. Otherwise, the lien will be unenforceable (although you still would have a right to sue for damages, you just wouldn’t have a valid lien to enforce).
That one year deadline does have a catch though: If the owner contests the lien, and files a Notice of Contest of the lien, then the lienor only has 60 days to file the lawsuit. This is a way for owners to force the hand of lienors and construction companies. This is commonly used when owners feel that liens are false or unenforceable—it allows owners to clear up their title quickly.
Who Can Lien?
Anyone who supplies construction services, can obtain a lien, assuming they follow the proper procedure. Engineers, designers, anybody who supplies materials, and laborers are included and can file liens.
Our Fort Lauderdale construction attorneys at Sweeney Law P.A. at 954 440-3993 can help your business get paid if there is a problem on your construction job.