5 Ways to Lose Your Lien Rights
While Construction Lien laws are in place to better protect contractors and their right to payment, there are 5 commonly made mistakes that can revoke a contractor’s lien rights.
As construction attorneys in Sarasota, we have observed cases where contractors have made these costly mistakes that could have easily been prevented with the guidance of an experienced attorney.
Not Serving Notice to Owner
It is especially important for contractors who are not in privity with the owner to serve a Notice to Owner within 45 days of commencement of the project. Not serving the Notice to Owner within the given time period and to the appropriate parties alone can put a contractor’s lien rights at risk.
Claiming the Wrong Amount
In Florida, claiming the wrong amount on a construction lien is considered to be filing a fraudulent lien, which is a 3rd degree felony. Contractors who are found to have filed a fraudulent lien may be liable for damages including attorneys fees and court costs.
Failure to Submit Sworn Statement of Account
If the property owner requests a Sworn Statement of Account, which is a document that sets forth the labor and materials furnished along with the amounts due and owing and the contractor fails to deliver the statement within 30 days of the written request, the lienor may be in jeopardy of losing their lien rights.
Contractors who wish to foreclose on their construction liens must file suit within one year of the date the Claim of Lien was filed. While this rule holds true in most cases, an owner may shorten the 1-year time period by filing a complaint for an order to show cause or a notice of contest of lien. A construction attorney in Sarasota can help ensure that you meet all essential deadlines.
After the owner files a complaint for an order to show cause, the clerk of court will issue a summons to the contractor to show cause within 20 days. This summons will require the contractor to justify why the lien should not be enforced. If the owner files a notice of contest of lien, the contractor must file suit to enforce the lien within 60 days of notification.
The State of Florida has established that contractors, subcontractors, material suppliers, equipment rental companies, laborers and professionals have lien rights. With that being said, if a construction professional is not properly licensed, they are forbidden from filing a lien in the State of Florida. It is important for contractors to meet the necessary license requirements in order to protect their lien rights. If you are a unlicensed contractor, we urge you to contact a Sarasota construction attorney from Cotney Construction Law as soon as possible. If you are not properly licensed, you have no lien rights.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.