The success of just about every construction project depends on the strength of its underlying contracts. Contracts give assurance to prime contractors and subcontractors that they will be compensated for services rendered. In Florida, these construction professionals have another legal tool at their disposal to encourage project and property owners to disburse payments. This is called a mechanic’s lien, and it effectively functions as a cloud on title that follows the property until it is lifted. A mortgage is another type of lien.
Time Limits for Filing Mechanic’s Liens
Prime contractors that have directly contracted with property owners have 90 days from the last furnishing of labor or supplies in a project to file a lien. Subcontractors and suppliers must file a preliminary Notice to Owner (NTO) within 45 days of providing materials (including specialty materials) or labor. If the prime contractor will receive the final payment from the property owner before either of those deadlines, then the NTO should be filed before receipt of that final payment. Because subcontractors and suppliers have the preliminary notice requirement, they often file the NTO as soon as they begin work.
So, a Mechanic’s Lien Has Been Filed on Your Property. What Now?
Contractors and suppliers file mechanic’s liens to, ultimately, get paid. If you want to sell or refinance the property, you must take care of the lien before the transaction is complete. Even if you plan on being the only user of the liened property, the most effective way to make a valid mechanic’s lien go away is to simply pay up. If you decide to pay, the claimant is required to file a discharge.
Once a mechanic’s lien has been filed in Florida, the claimant has one year to bring a foreclosure lawsuit against the property owner. If the claimant is successful, the property will be sold at auction. A portion of the proceeds will go toward discharging the claimant’s lien. Some claimants fail to bring a foreclosure lawsuit within the time limit after filing a mechanic’s lien, which voids the lien.
If you, as the property owner, wish to fight a mechanic’s lien, you could serve a Notice of Contest of Lien on the claimant. This reduces the one-year period for bringing a foreclosure lawsuit to 60 days from the date of the filing of the Contest of Lien; in some cases, it can lower the period to just 20 days. This will force the claimant’s hand (much) sooner rather than later. Instead of serving a lien contest, you might be successful in voiding the lien if you can show the claimant did not satisfy all legal requirements when he or she originally filed the lien.
Contact an Experienced Real Estate Firm
Mechanic’s liens can be useful tools for honest contractors, subcontractors, and suppliers to get paid for services rendered. However, there is such a thing as a frivolous mechanic’s lien. Frivolous or not, a mechanic’s lien on your property can severely limit your options for selling or otherwise capitalizing on it. It’s important to contact a quality Florida law practice if your property has been slapped with a mechanic’s lien. Salas Law Firm would be happy to discuss your legal needs and options today; call us at (954) 420-6406 to set up an initial consultation.