An equitable lien is a remedial tool used to prevent inequity of one party as against another. It may be used as a means of enforcing, against a piece of property, a party's obligation which has resulted in a benefit to that property. The obligation may arise through an agreement relating to the property which contemplates the use of the property as security for an agreement or where circumstances are such that consideration of rights and justice require that the property serve as security for the obligation. The imposition of an equitable lien upon specific property is particularly appropriate where a creditor has lost its security in that property in reliance upon a false representation of one who later claims a superior interest in the property.
Here's an example of how this situation might arise. A property owner contracts with a general contractor to make certain improvements on the property owner's property. After the general contractor begins performance on the contract, the property owner contracts to sell the property to a third party. The third party is informed of the existence of the contract between the property owner and the general contractor and of the general contractor's intent to file a construction lien against the property prior to the third party taking title to the property. The third party convinces the general contractor not to file its construction lien with assurances that the general contractor will be paid. The general contractor does not file its construction lien within the time frame outlined in Chapter 713, Florida Statues, losing its lien rights. The third party does not pay the general contractor.
Based on this scenario, the courts may impose an equitable lien against the property in favor of the general contractor to prevent the third party from being unjustly enriched. The doctrine of unjust enrichment is a recognition that a person is accountable to another on the ground that if the former were not required to do so, he would unjustly benefit, or the other would unjustly suffer loss. Golden v. Woodward, 2009 WL 1782314 (Fla. 1st DCA 2009).
An action to enforce an equitable lien must be brought within one year from the furnishing of labor, materials or services. F.S. 95.11(5).
If you are interested in retaining my services relating to claiming or defending an equitable lien (or any other matter) in Jupiter, Palm Beach Gardens or throughout Florida, please feel free to contact me at (561) 602-4447 or [email protected] or visit my website at www.elizabethmontgomerylaw.com.
Here's an example of how this situation might arise. A property owner contracts with a general contractor to make certain improvements on the property owner's property. After the general contractor begins performance on the contract, the property owner contracts to sell the property to a third party. The third party is informed of the existence of the contract between the property owner and the general contractor and of the general contractor's intent to file a construction lien against the property prior to the third party taking title to the property. The third party convinces the general contractor not to file its construction lien with assurances that the general contractor will be paid. The general contractor does not file its construction lien within the time frame outlined in Chapter 713, Florida Statues, losing its lien rights. The third party does not pay the general contractor.
Based on this scenario, the courts may impose an equitable lien against the property in favor of the general contractor to prevent the third party from being unjustly enriched. The doctrine of unjust enrichment is a recognition that a person is accountable to another on the ground that if the former were not required to do so, he would unjustly benefit, or the other would unjustly suffer loss. Golden v. Woodward, 2009 WL 1782314 (Fla. 1st DCA 2009).
An action to enforce an equitable lien must be brought within one year from the furnishing of labor, materials or services. F.S. 95.11(5).
If you are interested in retaining my services relating to claiming or defending an equitable lien (or any other matter) in Jupiter, Palm Beach Gardens or throughout Florida, please feel free to contact me at (561) 602-4447 or [email protected] or visit my website at www.elizabethmontgomerylaw.com.
RSS Feed