Does Your Contract Need a Lien Law Disclosure?
Lien laws are extremely complex and changes to these laws occur frequently so it’s important to stay abreast of the changes since they can change as often as every year. Whenever you’re researching lien laws, it’s important to understand that there are different types of liens and different types of lien law in different states. In this article, we’ll discuss an important lien law disclosure that should be included in a contract.
Residential Construction Contracts
It’s important to note that the lien law disclosure only applies to the construction or repairing of a residential dwelling with up to four units. The contract must also be greater than $2500. These stipulations are governed by Florida Statute 713.015 which also states that the disclosure must be on the front of your contract or on a separate page and be at least 12-point, capitalized, and boldfaced type.
The Purpose of the Disclosure
It is the contractor’s best interest to include this disclosure because it ensures that property owners will understand the repercussions of failing to pay for services or supplies rendered. In addition to that, it gives an owner the right to obtain a lien waiver from everyone the owner pays as an assurance that no lien will be attached to the owner’s property since payment has been made to all appropriate parties. The disclosure is not required if the owner is a licensed general contractor. Presently, there are no penalties for failing to include the disclosure; however, we strongly advise contractors to include it to preserve their lien rights.
As Sarasota construction attorneys, we know that contract language is extremely important. Your priority should be to ensure your language is clear and leaves no room for loopholes. We suggest you familiarize yourself with Florida Statute, Chapter 713 and draft your the disclosure based on the wording under the chapter. This way, you will cover all bases.
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.