Florida’s lien law (Chapter 713 of the Florida Statutes) was enacted to protect owners of real property by putting limits on their liability to lienors. The law also prevents unjust enrichment of owners at the expense of lienors. If you own property upon which you are making improvements, you can be liable to those who make improvements to the property or who furnish materials for the improvements. The lien law provides a way to limit your exposure to this liability by making “proper” payments during the course of the improvements. The proper payments defense limits an owner’s liability for liens to the price of the contract between the owner and the general contractor. In practice, this defense means that if the owner fulfills its obligations under the construction lien law, its liability for liens will not exceed the contract price.
As a property owner, one way to protect yourself from liens is to make sure all potential lienors have been paid to the extent that you have paid your contractor. This is accomplished by obtaining a release of lien from all persons who served notices to owner (November blog). Another is to secure releases of lien from the contractor. Also, before making partial payments, you should obtain a contractor’s affidavit indicating that potential lienors have been paid. Be aware that, if you pay a lienor who served you with a notice to owner without obtaining a release from that lienor, such payment is not a proper payment as to that lienor. You must obtain a release from all persons or parties who served a notice to owner!
Prior to making the final payment to your contractor, you should obtain a contractor’s affidavit (F.S. 713.06(3)(d)), which states that all potential lienors have been paid (or which lists those who are unpaid). If you make a final payment without the benefit of a contractor’s final affidavit, there is a serious risk that you will have to pay subcontractors or material suppliers who were not, in fact, paid by the contractor.
Another consideration is that you should not make any payments to the contractor after the expiration of a notice of commencement (usually 1 year from the date the notice is recorded)(F.S. 713.13). Any payments made to the contractor after the notice of commencement has expired are not “proper” for the purpose of claiming the proper payments defense.
Any payment that is not made in compliance with these three steps is not a “proper payment”, and will not reduce the owner’s exposure for liens. Merely claiming that you made all payments you thought were due is not enough. You should obtain the necessary releases and contractor affidavits as you make payments through the course of a construction project so that you will have the proper documentation to claim a proper payments defense if necessary. As an owner, it is important to make sure that the payments you are making on the project are made “properly” in order to reap the benefit of the proper payment defense.
Florida's Lien Law is complicated and it contains many requirements and nuances that must be followed. If you are interested in retaining my services relating to Florida's Lien Law in Jupiter, Palm Beach Gardens or throughout Florida, please feel free to contact me at (561) 602-4447 or liz@elizabethmontgomerylaw.com or visit my website at www.elizabethmontgomerylaw.com or www.jupitercollectionsattorney.com.
As a property owner, one way to protect yourself from liens is to make sure all potential lienors have been paid to the extent that you have paid your contractor. This is accomplished by obtaining a release of lien from all persons who served notices to owner (November blog). Another is to secure releases of lien from the contractor. Also, before making partial payments, you should obtain a contractor’s affidavit indicating that potential lienors have been paid. Be aware that, if you pay a lienor who served you with a notice to owner without obtaining a release from that lienor, such payment is not a proper payment as to that lienor. You must obtain a release from all persons or parties who served a notice to owner!
Prior to making the final payment to your contractor, you should obtain a contractor’s affidavit (F.S. 713.06(3)(d)), which states that all potential lienors have been paid (or which lists those who are unpaid). If you make a final payment without the benefit of a contractor’s final affidavit, there is a serious risk that you will have to pay subcontractors or material suppliers who were not, in fact, paid by the contractor.
Another consideration is that you should not make any payments to the contractor after the expiration of a notice of commencement (usually 1 year from the date the notice is recorded)(F.S. 713.13). Any payments made to the contractor after the notice of commencement has expired are not “proper” for the purpose of claiming the proper payments defense.
Any payment that is not made in compliance with these three steps is not a “proper payment”, and will not reduce the owner’s exposure for liens. Merely claiming that you made all payments you thought were due is not enough. You should obtain the necessary releases and contractor affidavits as you make payments through the course of a construction project so that you will have the proper documentation to claim a proper payments defense if necessary. As an owner, it is important to make sure that the payments you are making on the project are made “properly” in order to reap the benefit of the proper payment defense.
Florida's Lien Law is complicated and it contains many requirements and nuances that must be followed. If you are interested in retaining my services relating to Florida's Lien Law in Jupiter, Palm Beach Gardens or throughout Florida, please feel free to contact me at (561) 602-4447 or liz@elizabethmontgomerylaw.com or visit my website at www.elizabethmontgomerylaw.com or www.jupitercollectionsattorney.com.
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