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Construction Lien Law Can Result In Condominium Associations Paying Twice For the Same Work

476196983(2)Question: Our condominium association is going to re-roof all of the condominium buildings this winter. In my home state, there was a “mechanics lien law” which applied to repairs of this nature. Does Florida have a “mechanics lien law”? B.H. (via e-mail)
 
Answer: Yes. Florida’s Mechanics Lien Law was renamed the “Construction Lien Law” about 25 years ago and is found at Chapter 713, Florida Statutes. If your association undertakes an improvement to real property (such as re-roofing), and the contract price is more than $2,500.00, then the association must comply with the Florida Construction Lien Law.

The first step in doing so is recording a Notice of Commencement in the public records in the county where the condominium is located, before the work starts, and posting a certified copy on the job site. Individuals or companies that supply labor or material for the project who are not in “privity” (direct contract) with the association will often serve “Notices to Owner” upon the association during the course of the work. This is the first step for a supplier of labor or material in perfecting their lien rights under Chapter 713.

If the association receives a Notice to Owner, then it must ensure that every time it pays the general contractor, it receives a proper lien release from anyone who served a Notice to Owner. The association should also receive a lien release from the general contractor each time it pays the general contractor.

Before making final payment to the general contractor, the association must receive a final lien release from any person or entity who served a Notice to Owner, a final lien release from the general contractor and a final contractor’s affidavit from the general contractor.

The Florida Construction Lien Law is very technical in nature and it is best that the association seek advice from counsel about how it works. If the association does not comply with the law, it may end up paying double for the same work, first to the contractor, and once again to the subcontractor or material supplier who the prime contractor did not pay. The law is clearly intended to favor the suppliers of labors and materials, and not the owner of the property.

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1 Comment
  • Carl Brown
    November 24, 2014

    Mr. Adams:
    This is a Very Important Topic, thanks for publishing. Many states seem to have similar law protection for sub-contractors, including California where most of my work is. The process is critical and deadlines are important. We have a 20 day time limit for subs to file their notices. I highly recommend a consultant/project manager for such major projects. These professionals can process the paperwork to avoid liens and conflicts; and you will get apples-to-apples bids to choose from. Check the RCI directory for local roof consultant professionals, and verify they are not financially connected to any roofing manufacturer or contractor. Visit http://www.rci-online.org for the directory. Don;t depend on contractors or manufacturer inspections or self-quality control. Carl Brown, RCI, RRO