Florida Construction Law

Contractors know how difficult it is to obtain and maintain a surety relationship.  Lien transfer bonds often require the posting of the full amount as collateral if you do not have an existing surety relationship.  In lieu of posting the bond, you can opt to post the dollar amount following with the clerk: The principal amount of the lien, plus interest at the legal rate for 3 years, plus $1,000 or 25% of the lien amount.  The clerk may also charge up to $20 (plus $10 per additional transfer).  Section 713.24, Fla. Stat. Trenton H. Cotney Florida Bar Certified Construction Lawyer Trent Cotney, P.A. 1211 N Franklin St Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

Ricardo O. Wolfe, II and H. Michelle Wolfe v. Culpepper Constructors, Inc., 37 Fla. L. Weekly D505a, Case No. 2D10-3670, filed February 29, 2012. Contractor sought foreclosure of construction lien for $91,261.65, which was reduced to an award of only $9,074.06 after offsets for owners’ counterclaim for defective workmanship, after contractor had rejected a joint settlement offer of $25,000 made by owners pursuant to section 768.79, Florida Statutes (2006), and Fla. R. Civ. P. 1.442(c)(3). After citing concerns and observations by other courts that this statute and rule have not seemed to have their desired affect of reducing litigation, the court held that the trial court’s denial of fees to the owners was error, and reversed and remanded on this issue. (from RPPTL Subcommittee). Trenton H. Cotney Florida Bar Certified Construction Lawyer Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

The fact that a contractor has lien rights does not waive the right to arbitration.  Lien claims are normally stayed pending resolution of the matters that are arbitrated. Genstar Southern Development Corp. v. Troup Bros., Inc. , 396 So.2d 211 (Fla. 3d DCA 1981).   Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

Although you cannot lien public property, if a government owner leases property to a private tenant, you can lien the leasehold interest of the tenant. Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

MHB Construction Services v. RM-NA HB Waterway Shoppes, LLC , Case No. 4D10-3053 and 4D11-363, filed November 23, 2011: Affirmed trial court’s holding that contractor was NOT entitled to foreclose a construction lien against landlord’s interest where landlord had complied with s. 713.10(2) by recording a “blanket” lien prohibition notice, even thought lease expressly provided that tenant would make improvements and be reimbursed by landlord for 10% of those costs. In this case, even though landlord had signed the Notice of Commencement, the tenant was reflected as the owner of the leasehold interest. (from RRPTL Construction Committee). Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

A lien is valid for one year, unless a lienor files a lawsuit to enforce the lien prior to the expiration of the year. An owner has a right to file a Notice of Contest of Lien during the one-year period. Upon the filing of a Notice of Contest of Lien, a lienor must file a lawsuit to enforce the lien within 60 days.  Failure of the lienor to timely file a lawsuit renders the lien invalid.  (from dbpr). Trenton H. Cotney Florida Bar Certified in Construction Law www.trentcotney.com

Construction liens apply to private property only and cannot encumber government-owned property.  Section 713.01, Florida Statutes. Trenton H. Cotney Florida Bar Certified in Construction Law www.trentcotney.com

"Actual notice that a materialman is providing materials to a project, therefore, is insufficient to satisfy the notice requirements of Section 713.23(1)(c) . A subcontractor is not excused from the notice requirement of Section 713.23(1)( c) even where the owner, surety or contractor did not fully adhere to the requirements of chapter 713, Florida Statutes. See Prof'l Plastering & Stucco, 940 So.2d at 448 (“[E]ven if the Subcontractor is correct that the Owner, the Surety, and the Contractor did not fully adhere to the requirements of chapter 713, the Subcontractor [is] not excused from complying with the requirements of Section 713.23  that it provide notice ....” (quoting Bridgeport, Inc. v. Tampa Roofing Co., 903 So.2d 306, 309 (Fla. 2d DCA 2005) )." Stock Building Supply of Florida, Inc. v.  Soares Da Costa Construction Services, LLC , 2011 WL 2694522 (Fla. 4th DCA October 5, 2011). Trenton H. Cotney Board Certified in Construction Law Tren...

The fraudulent lien statute is contained in Section 713.31, Florida Statutes and discusses the penalties for recording a fraudulent lien.   Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

The failure to timely serve a Notice to Owner when required is a complete defense to a lien claim.  Gulfside Properties Corp. v. Chapman Corp ., 737 So.2d 604 (Fla. 1st DCA 1999). Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

A contractor is entitled to a final judgment of foreclosure on it lien claim even if the arbitration award was silent as to the contractor’s right to foreclose the lien.  Because the arbitrator found that the lien was proper and perfected, the contractor could obtain a final judgment of foreclosure.  Royal Palm Collection, Inc. v. Lewis , 36 So.3d 168 (Fla. 4th DCA 2010). Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

In Sam Rodgers Properties, Inc. v. Chmura , 2011 WL 1565446 (Fla. 2d DCA 2011), a home builder sued the purchaser for breach of contract and lien foreclosure.  The Court issued several useful holdings.  First, the fact that there was no meeting of the minds with regard to extra work performed does not invalidate the original executed contract.  Second, additional work performed by the home builder to secure the property which included finishing the roof system acted to extend the “last day of work” for purposes of calculating the 90 days to record the claim of lien.  Third, the home builder could not include amounts spent on insurance or property taxes for the constructed property in its claim of lien.  However, the inclusion of those amounts did not render the lien invalid. Finally, the Court held that the filing of an erroneous amended claim of lien did not render the initial claim of lien unenforceable. Trenton H. Cotney Board Certified in Constr...

Residential cleaning, maintenance and concierge services are not lienable under Florida construction lien law.  Parc Central Aventura East Condominium v. Victoria Group Services, Inc., 54 So.3d 532 (Fla. 3d DCA 2011). Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

The Court in Southern Pan Services Co. v. S.B. Ballard Construction Co ., 2009 WL 1885113 (M.D. Fla. 2009) held that the use of the "advice of counsel" defense to fraudulent liens does not act to globally waive the attorney-client privilege.  However, the Court noted that when advice of counsel is used as a formal defense, attorney-client privileged would be waived with regard to communications pertaining to the preparation of the claim of lien. Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

Section 713.21(4), Florida Statutes provides:   "By an order of the circuit court of the county where the property is located, as provided in this subsection. Upon filing a complaint therefor by any interested party the clerk shall issue a summons to the lienor to show cause within 20 days why his or her lien should not be enforced by action or vacated and canceled of record. Upon failure of the lienor to show cause why his or her lien should not be enforced or the lienor's failure to commence such action before the return date of the summons the court shall forthwith order cancellation of the lien." This statute allows owners to accelerate the lien process and seek the discharge of claims of lien. Trenton H. Cotney Florida Bar Certified in Construction Law Glenn Rasmussen Fogarty & Hooker, P.A. 100 S. Ashley Dr., Suite 1300 Tampa, FL 33602 (813) 229-3333 http://www.glennrasmussen.com

In Spectrum Interiors, Inc. v. Exterior Walls, Inc., 2009 WL 347745 (Fla. 5th DCA 2009), the Court held that the language contained in an executed waiver and lien release limited a sub-subcontractors damages.  The Court held that the sub-sub waived damages for payments received in response to executed lien waivers and could not seek damages prior to the executed lien releases. Potential lienors should carefully review all lien waiver documents prior to execution to insure that they are not waiving claims for potential extras, unexecuted change orders or other compensation. Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

In Palm Developments, Inc. v. Ridgdill & Sons, Inc ., 2009 WL 513027 (M.D. Fla. 2009), the Court held that an owner could pursue an action under Section 713.31, Florida Statutes for a fraudulent lien even if the lien had been released.  Damages under a fraudlent lien theory may include punitive damages. Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

LaSalle Bank National Association v. Blackton , Case NO. 5D10-499 (Fla. 5th DCA 2011) held that where a notice of commencement was recorded before a mortgage was recorded, the notice of termination of the notice of commencement was recorded on same day as the mortgage was recorded, and a construction lien was recorded thereafter, the earlier recorded mortgage had priority over the construction lien.  The trial court erred in finding that a notice of termination was not effective to terminate the notice of commencement, and that the construction lien related back to the filing of the notice of commencement.  The trial court erroneously concluded that a notice of termination having both the owner and contractor as the same entity cannot be effective.  It was not necessary to attach a contractor's final payment affidavit to the notice of termination where the owner averred in the notice of termination that all lienors had been fully paid.   Trenton H. Cotney B...

The Construction Industry Licensing Board gave notice of the issuance of an Order regarding the Petition for Declaratory Statement for Anthony C. Apfelbeck, filed on December 6, 2010. The Notice of Petition for Declaratory Statement was published in Vol. 36, No. 52, of the December 30, 2010, Florida Administrative Weekly. The Board considered the Petition at a duly-noticed public meeting held on January 14, 2011. The Board’s Order, filed on February 18, 2011, denies the Petition for Declaratory Statement of Section 713.135, Florida Statutes (notice of commencement and applicabililty of lien). Petitioner is substantially affected as required by Section 120.565, Florida Statutes. The Board does not have jurisdiction to interpret Section 713.135, Florida Statutes. Therefore, the Board denies the Petition for Declaratory Statement. Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-327...

On April 1, 2011, I will be presenting a 1.5 hour seminar on construction lien law for the Florida Refrigeration & Air Conditioning Contractors Association (FRACCA).  The seminar is part of the 2011 Education Conference held at the Rosen Centre in Orlando, Florida. Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com