7.2 Florida Lien Law Inside Contracting

7.2 Florida Lien Law Inside Contracting

B&F Area B item 9 lists lien laws next to contract scope because draws, extras, and final payment only work if the qualifier knows who can encumber the owner's property. Chapter 13 of this guide is the dedicated Construction Lien Law chapter. This section is lien law inside contracting: which notices your HVAC contract administration must generate, which clocks start when a sub or supply house furnishes, and why a public school job is a bond claim rather than a lien.

Who is in privity, and who needs a Notice to Owner

Privity means a direct contract with the owner. The direct contractor — the HVAC company that signed with the owner — claims under F.S. 713.05 and generally does not serve a Notice to Owner (NTO). Lienors not in privity (subcontractors, sub-subcontractors, and materialmen who contracted with someone other than the owner) claim under F.S. 713.06. Except for laborers, they must serve an NTO on the owner before commencing, or not later than 45 days after commencing, to furnish labor, services, or materials. A sub-subcontractor or a materialman to a subcontractor must also serve a copy on the contractor. Failure to serve the NTO, or to serve it on time, is a complete defense to the lien. Substantial compliance can save a defective form; it cannot save a late one. Laborers are excepted from the NTO prerequisite because they personally perform labor on site and do not furnish materials or the labor of others.

The NTO is not a lien. It is a warning that lets the owner make proper payments. Once the owner has an NTO, progress payments must account for that lienor; paying the HVAC contractor in full while ignoring a timely NTO from the copper house is how an owner pays twice. Direct contracts greater than $2,500 on one- to four-family dwellings must contain the F.S. 713.015 statutory warning in at least 12-point, capitalized, boldfaced type. Improvements whose direct contract price is $2,500 or less are exempt from most of Part I except F.S. 713.05. Unlicensed contractors, subcontractors, and sub-subcontractors have no lien under F.S. 713.02(7) (and F.S. 489.128 still blocks the contractor from enforcing the contract).

Notice of Commencement is a contract-start document

F.S. 713.13 requires the owner (or the owner's authorized agent) to record a Notice of Commencement (NOC) and post a certified copy or a notarized statement that it has been filed, before actually commencing the improvement — and the statutory form warns that it must be recorded and posted before the first inspection. If the work does not actually start within 90 days after recording, the NOC is void. Unless a longer period is stated, the NOC is effective 1 year after recording; payments the owner makes after expiration are improper payments. The NOC names the owner, contractor, lender, and any designated notice recipient. It is not itself a lien. Construction liens under F.S. 713.05 and 713.06 attach and take priority as of the NOC recording (or, if none was filed, as of the Claim of Lien). That is why lenders insist on a recorded NOC before disbursing construction funds.

Perfecting the Claim of Lien

Every lienor, including those in privity, perfects by recording a Claim of Lien that states the lienor, the person contracted with, a description of the labor or materials, a property description, the owner, first and last furnishing dates, and the unpaid amount. Record not later than 90 days after the final furnishing of labor, services, or materials (F.S. 713.08(5)). Final furnishing is the last date the lienor actually furnished. F.S. 713.01(12) says that date is not measured by a certificate of occupancy or a certificate of final completion, and it does not include correction of deficiencies in previously performed work. A punch-list damper adjustment on day 100 does not restart a 90-day clock that already expired. Serve a copy on the owner before recording or within 15 days after recording (F.S. 713.08(4)); failure makes the claim voidable to the extent prejudicial to someone entitled to rely on service.

A contractor in privity who wants to sue must give the owner a contractor's final payment affidavit under F.S. 713.06(3)(d) listing unpaid lienors who timely served NTOs, and must deliver that affidavit at least 5 days before instituting an action, even if the job was terminated short of completion and even if no lower-tier lienors exist. The owner should hold final payment until that affidavit arrives. Priority among lienors sharing one direct contract is: laborers first, then all persons other than the contractor, then the contractor (F.S. 713.06(4)).

Enforcement clocks the owner can shorten

A recorded Claim of Lien does not collect itself. F.S. 713.22 : the lien does not continue longer than 1 year after recording unless an action to enforce is commenced (and a lis pendens is needed to bind later purchasers). The owner can shorten that year. A recorded Notice of Contest of Lien limits the lienor to 60 days after service to file suit, or the lien is extinguished automatically. Independently, any interested party can have the clerk issue a summons to show cause; the lienor has 20 days after service to show cause why the lien should not be enforced or vacated (F.S. 713.21(4)). Miss either shortened clock and the lien is gone. F.S. 713.20 statutory waiver and release forms are how draws actually close these rights; a progress-payment waiver does not release retainage or later work if the statutory form is used.

Public jobs: bond, not dirt

F.S. 713.01 defines owner to exclude the state, a county, a municipality, and other governmental entities, and real property excludes publicly owned property. You cannot lien a school board chiller plant. The substitute is a payment and performance bond under F.S. 255.05. The contractor must execute and record the bond before commencing, and give the public entity a certified copy; the public entity may not pay the contractor until that copy is provided. No bond is required when the work is done for the state and the contract is $100,000 or less; counties, cities, and other public authorities may exempt contracts of $200,000 or less. Claimants not in privity with the contractor serve a written notice to the contractor before commencing or within 45 days after commencing, then a sworn notice of nonpayment not earlier than 45 days after first furnishing and not later than 90 days after final furnishing, and generally sue within 1 year. Those 255.05 clocks are bond administration, not a back-door lien on the courthouse.

Worked example. An HVAC supply house first delivers copper to a private Naples residence on March 1 and last delivers on May 1. It is not in privity with the owner. The NTO is due not later than 45 days after March 1 (April 15). The Claim of Lien is due not later than 90 days after May 1 (July 30). Punch-list warranty work in August does not move July 30. Serve the owner by the recording date or within 15 days after. If the same deliveries were to a county clinic, there is no Claim of Lien against the county; the supply house uses 255.05 notices against the recorded payment bond.

Florida HVAC scenario. You are the Class A prime on a $180,000 condominium condenser replacement. Your sheet-metal sub started April 2 and never served an NTO. On July 20 — more than 45 days later — the sub records a Claim of Lien for unpaid duct. The owner raises the complete defense in F.S. 713.06(2)(a). Your administration failure was not catching the missing NTO at the first pay application. Going forward you require a copy of every NTO with the first sub draw, you collect statutory 713.20 waivers through the date of each draw, and you do not sign a contractor's final payment affidavit that omits a lienor who actually served notice. That is managing the contract, not practicing law after the lien hits the official records.