A homeowner can protect their investment
According to Florida law, those who work on a property or provide materials, and are not paid-in-full, have a right to enforce their claim for payment against the property owner. This claim is known as a construction lien. If a contractor fails to pay subcontractors or material suppliers or neglects to make other legally required payments, the people who are owed money may look to the property owner for payment, even if they have paid the contractor in full. This means if a lien is filed against the property, it could be sold against the will of the owner to pay for labor, materials or other services, which the contractor may have failed to pay. This page explains Florida Statute 713, Part 1, as it pertains to home construction and remodeling, and provides tips on how a property owner can avoid construction liens on their property.
Tips for homeowners
When hiring a contractor and the improvements cost more than $2,500, a homeowner should know the following:
- The homeowner may be liable if they pay the contractor and he then fails to pay his suppliers or contractors. There is a way to protect homeowner: A Release of Lien is a written statement that removes the homeowner property from the threat of lien. Before making any payment, the homeowner should be sure to receive this waiver from suppliers and subcontractors covering the materials used and work performed.
- Request from the contractor, via certified or registered mail, a list of all subcontractors and suppliers who have a contract with the contractor to provide services or materials to the property.
- If the 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 making the last payment to a contractor, obtain an affidavit that specifies all unpaid parties who performed labor, services or provided materials to the property. Make sure that the contractor obtains releases from these parties before making 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. The homeowner must record the form with the Clerk of the Circuit Court in the county where the property being improved is located. Also, post a certified copy at the job site. (In lieu of a certified copy, the homeowner may post an affidavit stating that a Notice of Commencement has been recorded. Attach a copy of the Notice of Commencement to the affidavit.)
- In addition, the building department is prohibited from performing the first inspection if the Notice of Commencement is not also filed with the building department. A homeowner can also supply a notarized statement that the Notice has been filed, with a copy attached.