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What you should
know about Florida's Construction Lien Law
Source:
Florida Department of Agriculture and Consumer Services
Things You Should Know Before Starting
The most frequently cited complaints concerning home
remodeling, home improvements and home repair are cost
overruns, missed deadlines and inferior workmanship.
Another persistent problem is "fly-by-night" contractors
who take deposits or payments before finishing or
starting work.
When you need something done to your home, choose a
contractor carefully. Be wary of door-to-door
salespeople and telephone solicitors promising
"this-month-only" bargains. Make sure your contractor is
properly licensed and insured.
The Construction Lien Law is complex and cannot be
covered completely in this information. We recommend
that whenever a specific problem arises, you should
consult an attorney.
To register a complaint or to learn if complaints have
been filed against a prospective contractor, call:
Florida Department of Agriculture and Consumer Services
1-800-HELP FLA
Florida Department of Professional Regulation
1-800-342-7940
Local Better Business Bureau:
http://www.bbbwestflorida.org
To check on a contractor’s license:
Florida Department of Professional Regulation
1-800-342-7940
Hernando County Contractor Licensing
352-754-4109
Florida law allows people who work on your property or
provide construction materials and are not paid to
enforce their claim for payment against your property.
This claim is known as a construction lien.
That sounds fair - most people expect to pay for work
done by others. Not one wants to pay twice, though. Or
worse yet, lose their home! That’s a very real
possibility, however, if you aren’t familiar with
Florida Statute 713, also known as the "Construction
Lien Law".
The statute states that "the right, title, and interest
of the person who has contracted for the improvement may
be subject to attachment under the Construction Lien
Law". This means that your property may be sold against
your will in a court proceeding if a lien is filed on
your property as a result of an unpaid bill for labor,
materials or other services performed in connection with
the improvement of your property.
This document explains State Statute 713 as it pertains
to home construction and remodeling, and provides tips
on how you can avoid construction liens on your
property.
Protecting Yourself
If you hire a contractor and the improvements cost more
than $2,500, you should know the following:
You may be liable if you pay your contractor and he then
fails to pay his suppliers and subcontractors.
There is a way to protect yourself: a "Release of Lien"
is a written statement which removes your property from
the threat of lien. Before you make any payment, be sure
you receive this waiver covering the materials used and
work performed.
If your contract calls for partial payments before the
work is completed, get a "Partial Release of Lien"
covering all workers and materials used to that point.
Before you make the last payment to your contractor,
obtain an affidavit that specifies all unpaid parties
who performed labor, services or provided materials to
your property. Make sure that your contractor obtains
releases from these parties before you make the final
payment.
Always file a Notice of Commencement before beginning a
home construction or remodeling project. The local
authority that issues building permits is required to
provide this form. You must record the form with the
Clerk of the Circuit Court of the county where the
property being improved is located. Also post a
certified copy at the job site. (In lieu of a certified
copy, you may post an affidavit stating a Notice of
Commencement has been recorded. Attach a copy of the
Notice of Commencement to the affidavit.)
The Notice of Commencement notes the intent to begin
improvements, the location of the property, description
of the work and the amount of bond (if any). It also
identifies the property owner, contractor, surety,
lender and other pertinent information. Failure to
record a Notice of Commencement or incorrect information
on the Notice could contribute to having to pay twice
for the same work or materials. It could also prevent
the property from passing code inspection.
Whose responsibility is it to get these releases ?
You can stipulate in the agreement with your contractor
that he must provide all releases of lien. If it is not
a part of the contract, however, or you act as your own
contractor. YOU must get the releases.
If you borrow money to pay for the improvements and the
lender pays the contractor(s) directly, instruct the
lender to get releases before making any payments. If
your lender then fails to follow the legal requirements,
it may be responsible to you for any loss.
NEVER MAKE A PAYMENT WITHOUT RECEIVING A RELEASE!
What can happen if you don't get releases of lien?
You will not be able to sell your property unless all
outstanding liens are paid. Sometimes a landowner can
even be forced to sell his property to satisfy a lien.
Who can claim a lien on my property?
Contractors, laborers, material suppliers,
subcontractors and professionals such as architects,
landscape architects, interior designers, engineers or
land surveyors all have a right to file a claim of lien
for work or materials. Always get a release of lien from
anyone on this list who does work on your home.
Additional tips on home construction:
If you intend to get financing, consult with your lender
or an attorney before recording your Notice of
Commencement.
Insist that the contractor/remodeler secures a building
permit and adheres to all building codes and ordinances
Information all construction contracts should contain:
The contractor’s name, address, telephone number and
contractor’s license number.
A precise description of work and materials to be
supplied. The contract should specify the grade of
construction, flooring and trim materials to be used.
Don’t accept the phrase "or equivalent"; the contract
should specify appliance models and alternates for
models not available.
A completion date.
A complete list of companies or individuals supplying
the contractor with labor or materials. Be sure they are
insured so you are protected against theft or damage to
their supplies or work.
Financing information and the payment schedule.
All necessary building permits or licenses.
Agreement regarding site clean-up and debris disposal.
All warranty agreements.
Ask for explanations and clarifications of legal terms
or confusing language. Be sure you understand completely
what you are signing before you sign, AND REMEMBER,
promises are difficult to enforce unless they are in
writing. Even in small jobs, have a written contract
spelling out the details. Be wary of anyone who says,
"We don’t need to bother putting it in writing."
Some contractors require a down payment of 20-30% of the
total and an additional payment at the halfway point.
Pay only when the work is done to your satisfaction and
you have releases of lien as described earlier in this
pamphlet. If the completion date is critical, like a
swimming pool planned for summertime use, link payment
to on-time performance. Changes to a contract after
construction has begun can cost you. Specify in the
contract how changes are to be handled.
Cancellation of Contracts
Some home repair/improvement contracts can be canceled
in writing (preferable by certified mail), without
penalty or obligation by midnight of the third business
day after signing. They include:
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Those signed anywhere other than the seller’s normal
place of business.
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Those signed as a result of door-to-door solicitation
except emergency home repairs.
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Those paid on an installment basis.
Other contracts are binding as soon as they are signed,
so be sure before you sign.
FLORIDA’S CONSTRUCTION LIEN LAW - NOW YOU KNOW
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