Posts Tagged ‘Florida’

How To File A Mechanic’s Lien in Florida

On February 1, 2012        

How To File A Mechanic’s Lien in Florida

If you have not been paid for labor, services or materials furnished on a construction project in Florida, you may be able to collect the money you are owed by filing a mechanic’s lien (also referred to as a construction lien).  You can file a mechanic’s lien claim on your own, or call upon an attorney or mechanic’s lien service to help you navigate the paperwork and process.

Step 1: Determine If You Are Qualified To File A Mechanic’s Lien

Not everyone is entitled to file a mechanic’s lien. The services, materials or labor you furnish to a construction project must qualify for protection under Florida’s lien laws.  The term “Lienor” is defined by F.S. § 713.01(17) as follows:

(a) A contractor
(b) A subcontractor
(c) A sub-subcontractor
(d) A laborer
(e) A materialman who contracts with the owner, a contractor, a subcontractor or a sub-subcontractor; or
(f) A professional liener under § 713.03 (architect, landscape architect, interior designer, engineer, surveyor, mapper)

Noticeably absent from this list is the material supplier to a party who is not the owner, a contractor, a sub or a sub-sub.  Therefore, suppliers to other suppliers and suppliers to anyone who is a sub-sub-subcontractor (or below) is not protected.

Step 2: Confirm You Preserved Your Mechanic’s Lien Rights

In Florida, most construction participants must deliver some type of notice to preserve their rights to file a mechanic’s lien.

Those who did not contract with the property owner must deliver a “Notice to Owner” within 45 days of first furnishing labor or materials to the project.  The only exception to this “Notice to Owner” requirement is for pure laborers (who never need to deliver a preliminary notice).

Those who did contract with the owner must record a Notice of Commencement before the start of construction.

If you furnished this notice, you’re in luck, and you’ve preserved your right to file a mechanic’s lien. If you haven’t furnished the requisite notice, you may not have lien rights.

Step 3: Produce The Mechanics Lien Document With Required Content

Now it’s time to produce the mechanic’s lien form. Florida has strict requirements about what your mechanic’s lien must contain (see F.S. § 713.08) Here are a few:

  • Identification of the party who hired you
  • Description of the labor, materials or services furnished to the project
  • The contract price or value of all services furnished
  • Legal Property Description
  • Identification of the Property Owner
  • Date services first and last furnished
  • Amount due and unpaid to you

The statute itself proscribes a form to use to file a Florida mechanic’s lien. Download the form for free here: Free Florida Mechanic’s Lien Form.

The most difficult part of completing this form is to insure you have the proper legal property description for the property being liened.

Step 4: Timely Record The Florida Mechanic’s Lien with the Proper Recording Office

The next step is to timely record your Florida mechanic’s lien.  Florida requires all parties to record their mechanic’s lien within 90 days after last furnishing services, labor or materials to the project. The courts will not accept any excuses for tardy recording.  If you record your mechanic’s lien late, the mechanic’s lien will be rendered void.

The Florida mechanic’s lien – statutorily referred to as a “Claim of Lien” – must be recorded in the county property records where the construction project itself is situated. Each county in Florida maintains its property records by the Clerk of Court for the Florida county, however, some counties delegate that property recording duty to a separate “County Recorder” office.  You want to be very careful here, and make certain that you record the mechanic’s lien instrument where it must be recorded.

Step 5: Send Notice That Mechanic’s Lien Was Recorded

Florida requires all mechanic’s lien claimants to serve a copy of the mechanic’s lien on the property owner “before recording or within 15 days after recording.”  This is a very important requirement in Florida, as §713.08(4)(c) provides that the failure to do this “shall render the claim of lien voidable to the extent that the failure or delay is shown to have been prejudicial to any person entitled to rely on the service.”

So, while the mechanics lien won’t be invalid per se, there is a significant risk that it could be nullified.  Moral: Get the mechanics lien served on the proeprty owner as soon as possible.

The mechanic’s lien must be served on the property owner pursuant to F.S. § 713.18, which provides for service by any of the following methods:

(a) By actual delivery to the person to be served; if a partnership, to one of the partners; if a corporation, to an officer, director, managing agent, or business agent; or, if a limited liability company, to a member or manager.

(b) By sending the same by registered or certified mail, with postage prepaid, or by overnight or second-day delivery with evidence of delivery, which may be in an electronic format.

(c) If the method specified in paragraph (a) or paragraph (b) cannot be accomplished, by posting on the premises.

Step 6:  Enforce Your Florida Mechanic’s Lien

Mechanic liens in Florida (or elsewhere) do not remain effective and encumbering against a property forever (See: Does A Mechanic’s Lien Cloud Title Forever?).

In Florida, mechanic liens must be enforced within 1 year from the date the lien is originally recorded. Be careful about this requirement, however, as this time period can be significantly shortened.

If a property owner serves a “Notice of Contest of Lien” document, the mechanic’s lien enforcement deadline is shortened to just 60 days.  If a property owner (or any other interested party) files a summons and complaint to show cause on the lien, the foreclosure deadline is shortened to just 20 days.

To learn more about lien foreclosure, read this tag: Foreclosures.

Posted in:     Mechanic Liens  /  Tags: , , , , ,   /   Leave a comment

Scenario: Can Landscapers File A Mechanics Lien?

On January 13, 2012        

Scenario: Can Landscapers File A Mechanics Lien?

I’m frequently approached by landscaping companies to advise them on the extent of their mechanics lien rights. These companies usually have a mix of business. Sometimes, they’re doing full landscaping projects, re-landscaping a particular property.  Other times, they are doing landscape maintenance in some form.  I’ve even been approached in the past by lawn mowing services, who are interested in filing a lien against properties where they’ve mowed the lawn (without payment) for a period of weeks or months.

So, do landscaping companies have lien rights?  The answer (of course) is sometimes.

To help discuss this issue, there is a Florida case from 1986 that discusses this exact circumstance.  While this is a Florida case, the same principle applies pretty consistently across the nation, although there are exceptions in certain states where landscapers are given much greater and much less latitude as is given in Florida.

The case is Legault v. Suncoast Lawn Services, Inc., where the Fourth District Court of Appeal in Florida explained as follows:

Section 713.01(8), Florida Statutes, requires that an improvement, in order to support a mechanic’s lien, must result in a permanent benefit to the land or other real property…Although planting for landscaping purposes may be considered a permanent improvement, maintenance landscaping services do not bestow a permanent benefit upon the land, and do not entitle the laborer to a mechanic’s lien.

Therefore, a landscaping company “planting for landscaping purposes” is considered contribution of a permanent improvement. However, simple landscaping maintenance services (like lawn mowing) does not qualify.

As usual, the trouble is sorting out all the gray area between what is “planting for landscaping purposes” and maintenance.

This is very similiar to scenarios we posted about in the past.  Actually, you can find a very common theme in all of these scenarios:  When you perform maintenance work or work that does not create a permanent attachment to the property, you don’t have lien rights. If you do create a permanent attachment, you do have lien rights.  With certain exceptions, that’s the golden rule.  Here are the other two similar scenarios:

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Special Mechanic Lien Rules for Specially Fabricated Materials

On January 11, 2012        

Time and time again on this blog, I’ve said that if there is one lien law rule consistent from state to state, it’s that in order to qualify for a mechanics lien claim, the materials or labor you furnish must actually be incorporated into the jobsite’s property (click here to see mentions of “incorporation” on blog).

Sometimes, however, there’s an exception that applies to certain parties who manufacture or supply specially fabricated materials. According to these exceptions, a mechanics lien can be filed for materials created, but not ever incorporated into the property, under certain conditions.  This post discusses what specially fabricated materials are, which states have the exception, and under what circumstances the exception applies.

Specially Fabricated Materials Defined

What exactly is a “specially fabricated material?”  Generally speaking, most states who define this term as “materials not generally suited for or readily adaptable to use” in a structure. As you can see, however, this leaves a lot of room for interpretation.

Specially Fabricated Materials are defined as materials not generally suited for or readily adaptable to use.
As a result, you can think about building materials as being part of a spectrum, with some materials absolutely, positively being specially fabricated for a specific project, and others obviously being your run-of-the-mill standard building material that is not specially fabricated. Then, in the middle, there is some gray area.

Most courts will apply a simple test to decide whether a material is specially fabricated, weighing these two factors:  (1) Were the materials specially ordered and specially fabricated for that specific project?; and (2) Can the produced materials be easily used in another structure?

Survey of State Laws Giving Specially Fabricated Materials Special Treatment

There are a handful of states that specifically discuss specially fabricated materials in their mechanic lien laws. These states typically allow a materialman to file a mechanics lien if they produce the materials, and after production, the materials are not incorporated into the property because the order is cancelled or interfered with by the property owner or general contractor.  Some of these states require a special “specially fabricated materials” notice be sent at the time an order is placed.

Here is a survey of the states with special rules on the books about specially fabricated materials.

Florida

In Florida, there isn’t a statute that excuses specially fabricated materials from the state’s general requirement that materials must be incorporated into the property to qualify for mechanic liens. However, the courts ahve carved out an equity exception to the general rules for specially fabricated materials, providing they are lienable even if they never arrive at the job site, so long as the materials were manufactured to order and the non-incorporation is the fault (either direct, or by direction) of the property owner.

The jurisprudence was established in Lehigh Structural Steel Co. v. Joseph Langner, Inc. by the 1949 Florida Supreme Court, when the court explained as follows:

We are cognizant of the rule that the Mechanics’ Lien Law should be construed so as to afford to mechanics and laborers the greatest protection compatible with justice and equity…And we have previously noted and approved the rule, followed in many jurisdictions, that the real property to be improved is subject to a lien for materials specially fabricated for such improvement under a contract directly with the owner of the realty when such materials are not used or delivered by the act or direction of the owner. There are strong equitable reasons for holding the owner’s property subject to a materialman’s lien in such cases.

Hawaii

Hawaii presents an interesting case, as the statutes do not clearly provide that a party may file a mechanics lien for specially fabricated materials not actually incorporated into the property’s improvement. However, the statutes do mention specially fabricated materials, and therefore, it can be reasonably interpreted to allow a lien in the event these materials are created and never used.

Nevertheless, the statute is not clear on this point, and there doesn’t appear to be any case law interpreting the same.  Here is what the statute says, within H.R.S. 507-41:

“Furnishing of materials” includes supplying of: materials incorporated in the improvement or substantially consumed in construction operations or specially fabricated for incorporation in the improvement; building materials used during construction but not remaining in the improvement, diminished by the salvage value of the materials…

Massachusetts

Massachusetts ALM GL ch. 149, § 29 has a special requirement for those supplying specially fabricated materials, and while the statute doesn’t clearly indicate a mechanics lien could be placed even if the materials were not incorporated into the property, this statute infers the same.

The statute requires that those providing specially fabricated materials must deliver a notice to the property owner within 20 days of when the order for materials is placed. Presumably, if the materials are produced and never incorporated, lien rights would still exist, as the need for the notice doesn’t apply once the specially fabricated materials are built and incorporated. Lawrence Plate and Window Glass Co. v. Varrasso Bros., Inc. At that point, the materialmen is treated like an ordinary material supplier without the notice requirement.

Therefore, the notice requirement is only there to preserve mechanic lien rights in the circumstance that the materials are never installed.

Montana

Montana has a statute dedicated to material suppliers and setting forth the specific circumstances when a materialman has mechanic lien rights, and this statute specifically addresses specially fabricated materials. Mont. Code Anno., § 71-3-524 provides:

(1) A lien for furnishing materials arises only if:
(a) (i) the materials are supplied with the intent that they be used in the course of construction of or incorporated into the improvement in connection with which the lien arises; and
(ii) the intent described in subsection (1)(a)(i) may be shown by a contract of sale, by a delivery order, by delivery to the site by the lien claimant or at the lien claimant’s direction, or by other evidence; and

(b) the materials are:
(ii) specifically fabricated for incorporation into the improvement and not readily resalable in the ordinary course of the fabricator’s business, even though the materials are not actually incorporated into the improvement;

Therefore, the supplier of specially fabricated materials may file a lien if the materials are never incorporated, but only under certain circumstances.  These circumstances in Montana, while statutorily provided, are really similar to the requirements elsewhere that are created by case law.

Nebraska

The rule in Nebraska is very similar to the rule in Montana, as both states specifically address specially fabricated materials in their statutes.  Again, the statutory rule in Nebraska (like Montana) is very similar to the standard created by case law in other states.

Quoting from the Nebraska statute, to file a mechanics lien for non-incorporated specially fabricated materials, the following is required: “Specially fabricated for incorporation in the improvements and not readily resalable in the ordinary course of the fabricator’s business even though not actually incorporated in the improvement.” Neb. Rev. Stat. § 52-134(1)(a)

North Dakota

Similar to the situation in Nebraska and Montana, North Dakota statutes build-in a reference to specifically fabricated materials, suggesting that lien rights exist in the state for material specifically fabricated for a project, but never actually incorporated therein.  The statute in North Dakota specifically provides as follows, in its definition of materials that materials include “custom or specially fabricated materials for incorporation in the improvement.”

Unlike the statutes in Nebraska and Montana, there is no specifying that the specially fabricated materials are worthy of a lien absent incorporation. However, since the statute specifically mentions specially fabricated materials and defines them as materials “for incorporation in the improvement,” it makes one wonder if there is an inference here that they are qualified for lien rights absent physical incorporation.

Tennessee

Tennessee Code Ann. §66-11-101(4)(A)(iii) includes in its definition of “furnish materials,” to “specially fabricate materials for incorporation in the improvement and, if not delivered to the site of the improvement, are not readily resalable by the lienor.”  This definition, like the definitions in some of the others states listed herein, make it evident that there are lien rights if specially fabricated materials are ordered, but not physically incorporated into the building.

Texas

The Texas Property Code provides a specific exception for specially fabricated materials to the general requirement that to file a lien, a supplier’s materials must be used in or delivered to the construction project. Section 53.0231(b) provides – quite clearly – that “A person who specially fabricates material has a lien even if the material is not delivered.”

Such clarity is surprising for a state whose lien laws are among the most complex in the nation.  Ah, but that is not all, of course.  To protect this right to lien for non-incorporated specially fabricated materials, the supplier must send a “Notice of Specially Fabricated Items” to the property owner.

All Other States

In this survey of specially fabricated mechanic lien laws, I’ve focused on those states that have statutes or cases mentioning these types of materials, and even further, allowing liens for the same. Just because a state doesn’t have a statute or a case addressing specially fabricated materials, however, doesn’t mean lien rights for these materials don’t exist.

As you can see in the case referenced under the above Florida discussion, providing lien rights to specially fabricated material suppliers is an equity exception to the state’s general incorporation rule. Every state who has an incorporation rule may, if the circumstances warrant, provide for such an equity exception.

Of course, there are some states who forbid such liens.  There are probably some other states that specifically allow these liens who have been overlooked in this post.  (Readers?  Lawyers?) However, this is a good survey of specific laws addressing this issue, and if you’re in a state not mentioned, you can probably apply the same equity principles to find a mechanics lien right.

Posted in:     The Legal Corner  /  Tags: , , , , , , , , , , , , ,   /   4 Comments

Free Florida Mechanic Lien, Bond Claim and Notice To Owner Forms

On January 5, 2012        

Here are a few Florida forms that are helpful to anyone furnishing materials, labor or services to construction projects in those states, as well as a description of each. All forms are provided subject to Zlien’s terms of use.  These forms relate only to private projects in the state of Florida.

Free Florida Mechanics Lien Forms For Download

Notice to Owner / Notice to Contractor
Download Florida Notice to Owner and Contractor

All parties who do not contract directly with the property owner in Florida must deliver a preliminary notice within 45 days of first furnishing materials and/or labor to the project. When there isn’t a payment bond posted to the project, the notice is styled a “Notice to Owner.”  When a bond is posted, however, the notice is styled a “Notice to Contractor.”

The Notice to Contractor is always delivered to the general contractor.  The Notice to Owner, however, must be provided to the property owner and everyone “above the contracting chain” from you.  Since potential lien claimants may not know whether a bond has been placed, or the specifics about who is issuing the bond, Florida law allows you to request identification of the bond from the property owner or prime contractor.

Further, you can send a combined “Notice to Contractor / Notice to Owner” preliminary notice, which will protect both your lien rights and bond claim rights.  The free form provided here is such a combined Notice to Contractor / Notice to Owner.  It also contains a formal written request for identification of the bond.

Claim of Lien
Download Florida Claim of Lien

When unpaid on a construction project in Florida, parties may file a mechanics lien against the real property, gaining a real security interest in the property itself equal to the value of the services, labor and/or materials furnished to the project.  Mechanic liens in Florida must be filed within 90 days of last furnishing labor and/or materials to a construction project.  More specific information about Florida’s mechanic lien laws can be found in the post on this blog: 5 Things To Know About Florida’s Mechanics Lien Law.

This particular form should be filled in, signed and notarized, and then filed with the Clerk of Court for the county where the project is located. While usually filing with the Clerk of Court is sufficient, some counties have a separate County Recorder department.  If this is the case, the lien should be filed in with the recorder and not the clerk.

Notice of Non-Payment
Download Florida Notice of Non-Payment

When a bond has been issued for the project, lien claimants are entitled to file a claim against the bond, and not the real property itself.  This claim must be delivered to the prime contractor and the surety company by certified mail, with return receipt requested.  It must be delivered within 90 days of last furnishing labor and/or materials to the construction project.  The “Notice of NonPayment,” while creating a formal notice upon the claim under the Florida Construction Lien Law, does not require recording with the clerk or recorder.

Notice of Contest
Download Florida Notice of Contest

If your property is liened, and you don’t want to wait for an entire year to see whether the lienor intends to file a lien foreclosure action, in Florida you can serve a “Notice of Contest” upon the lienor.  Service of this notice shortens the lien effective period from one year to just 60 days, meaning the lienor will be required to file the lawsuit to foreclose the lien within the following 60 days or the mechanics lien will be rendered void.

This document must be signed and notarized, and served on the lienor by certified mail with return receipt requested.

Discharge of Lien
Download Florida Discharge of Lien

After receiving payment on a mechanics lien, or for other reasons, you’ll be required to discharge your mechanics lien from public records.  The lien discharge documentation should be filed in the same recorder or clerks’ office where the mechanics lien itself was recorded.  The document must be signed and notarized, and must actually reference details about the recorded lien within it.

The Value of Zlien’s Services

While forms are important and Zlien prides itself on having the most complete and accurate set forms, there is more to filing a mechanics lien or properly sending a  notice to owner than just filling out the form and sending it on its way.  We provide these forms to our readers free of charge, but that’s because we understand that the true value of Zlien’s service is more than just providing our clients with forms.

First, forms are fluid.  The forms we provide above are simple generic forms for Florida mechanic liens. However, depending on your role in the project and the work you’re performing, these lien forms may exclude certain fields, or may change slightly in one way or another.  Plus, you have to make a decision about which form is the right form for you to use. When you use the Lien Wizard, all of these nuances and variables are taken into consideration.

Second, there are a lot of steps in putting these documents together and getting them filed or delivered.  A service like Zlien that handles all of the logistics has a value that cannot be understated.  Take a look at this blog post for a more detailed explanation: Why You Shouldn’t Use Do-It-Yourself Mechanic Lien and Notice Forms.

Posted in:     Mechanic Liens, Preliminary Notices  /  Tags: , , , , , , , , , ,   /   Leave a comment

Five Things To Know About Florida’s Mechanic Lien Laws

On January 4, 2012        

One of the most popular posts on this blog has been an article I wrote in December 2009 titled: 5 Things To Know About The Miller Act. It’s been a long time since we discussed mechanic lien law in Florida, and so I’m inspired to write a top five post about Florida’s mechanic lien laws.

Parties looking to file a mechanics lien in Florida must comply with the statutes housed in Title 40, Chapter 713, Part I of the Florida Statutes, titled the “Construction Lien Law.”  Here are the top five things you should know about these laws to preserve, perfect and enforce your mechanics lien rights.

1) Preliminary Notice is Required

If you don’t deliver a preliminary notice at the start of furnishing labor or materials, you will likely lose your mechanics lien rights in Florida. All parties who did not contract directly with the property owner must serve a Notice to Owner within 45 days of furnishing labor and/or materials to the construction project. There are only two small exceptions to this requirement, as the requirement does not exist for pure individual laborers or for professionals (i.e. architects, engineers, etc.).

The preliminary notice must contain all the information required by the statute (including a statutory WARNING statement), and must be sent to certain parties.  Specifically, make sure you send the preliminary notice to those listed in any filed Notice of Commencement, and:

  • If hired by the general contractor, send the notice to the property owner;
  • If hired by a subcontractor, send the notice to the property owner and the general contractor; or
  • If hired by a sub-subcontractor, send the notice to the property owner, the general contractor and the subcontractor.

2) You Must File A Florida Mechanics Lien Within 90 Days From Last Doing Work (Warranty Work Not Included)

In some states, the lien deadline starts to count from the end of the entire construction project.  Not so in Florida.  Claimants in Florida must record their mechanics lien within 90 days from last furnishing labor, services or materials to a construction project.  The 90 day period starts to count when the substantive portion of your work is completed, and you cannot include the correction of deficiencies in work or warranty work when determining this date.  If you are an equipment rental company, the last date of furnishing is the last date the equipment was actually on site and available to the parties for use.

When recording your mechanics lien, be careful where you are recording.  While most counties maintain county property records with the Clerk of Court for the Florida county, there are some exceptional counties where the property records function is delegated to an designated “County Recorder.”

3)  Know Who Does and Does Not Qualify For Lien Rights

Generally speaking, contractors, subcontractors, material suppliers, equipment rental companies, laborers and professionals have lien rights in Florida.  Florida does not require that you have a written contract to file a mechanics lien, so contracts can be oral, written, express or implied. However, the following do not have any rights to file a Florida mechanics lien:

  • Sub-sub-subcontractors (those hired by sub-subs)
  • Suppliers to suppliers
  • suppliers to sub-sub-subcontractors
  • Anyone who is required to be licensed in Florida, but who is not (read more about unlicensed contractor lien rights here)
  • Maintenance workers (work / materials provided must permanently improve the property)

4)  Do Not Exaggerate Your Lien Claim

This one really applies nationwide, and not just in Florida.  However, it’s particularly important in Florida, because filing a mechanics lien considered “fraudulent” is a 3rd degree felony.  The tough part is distinguishing between a “mistake” or something subject to a “good faith argument” versus an actual willful or negligent exaggeration.

Florida does not allow lien claimants to include amounts within the mechanics lien for unapproved change orders, claims and lost profits on unperformed work, and other similar legally theoretical claims for damage payments. Similarly, lien claimants should not add costs or lien fees, interest or attorney fees to their Florida mechanics lien.

While all of these amounts may be recoverable in litigation, they cannot be added to lien itself, as the mechanics lien law in Florida only allows lienors to encumber the property for the value of its actual permanent improvement to the property.  This is a typical rule all across the country, as we discussed previously in this post:  What Costs Can I Include In A Mechanics Lien?

5) Know The Foreclosure Deadline…And All Exceptions

In Florida, as elsewhere, mechanic liens are only effective for a defined period of time.  Once that time period is up, the lien expires as a matter of law unless you file a lawsuit to foreclose upon the property and the lien.  The general rule in Florida is that the lien foreclosure action is due within 1 year from the lien’s recording.

However, the 1 year foreclosure period can be shortened to as little as 60 or 20 days. It’s important to know these two exceptions:

  • Foreclosure period is reduce to 60 days if the property owner serves a Notice of Contest of Lien (F.S. 713.22(2)).
  • Foreclosure period reduced to 20 days if the owner or interested party files a lawsuit complaint and summons with a rule to show cause on the mechanics lien (F.S. 713.21(4)).
Posted in:     Mechanic Liens, Preliminary Notices  /  Tags: , , ,   /   1 Comment
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