In Florida’s bustling construction industry, contractor liens pose a significant challenge for condo builders. These legal claims arise when contractors, subcontractors or suppliers claim they are unpaid for their work or materials. Under Florida’s Construction Lien Law, those claimed to be unpaid have the right to enforce their claim against the property.
Bonding off the claim of lien
To tackle this issue, condo builders can employ several strategies. The first strategy is bonding off the claim of lien. This involves depositing money into the Court Registry or obtaining a surety bond equal to the lien amount, plus interest and costs. This action transfers the lien from the property to the bond.
Notice of Contest of Lien
The next strategy is Notice of Contest of Lien. Recording this notice reduces the time the lienor has to file suit from 1 year to 60 days. Failure to do so extinguishes the Claim of Lien.
Written Release of Lien
Yet another strategy is a Written Release of Lien. Builders can include a clause in contracts prohibiting the filing of a construction lien against their property before final payments, but this cannot be waivers as Florida law prohibits the waivers of liens.
Requiring Releases of Lien
Owners can demand general contractors to provide partial and final releases of lien, preventing liens due to non-payment. However, this must be done through statutory requirements and with a separate payment.
Conclusion
While contractor liens present challenges, proactive measures and understanding legal provisions can mitigate them. Understanding this prior to construction can help mitigate issues during and post construction.
