October 2018 - Wyman Legal Solutions

Why should you talk to a construction attorney before signing a lien release?

Subcontractors and material suppliers know that when it’s time to get paid on a job, they’re going to be asked to sign a lien release in exchange for receiving their payment. So, as their construction litigation lawyer, I always ask them about the lien release they signed. Often I’ll hear, “it’s the standard form,” or, “I signed the one the contractor gave me,” or, “I don’t know, I just wanted my check.” Thinking that all lien releases are the same is the surest way to accidentally sign away your lien rights without getting paid.

All too often subcontractors either do not read, or sometimes do not understand, the lien releases they are signing in exchange for progress payments on a project. A common mistake we see as a construction law firm is subcontractors signing a release that contains language releasing lien rights for work performed through the date the lien release is signed. The problem is that very often the payment being made is only for work done during a specific period of time that ended days or weeks before the payment is actually made. By signing that release under those circumstances, the subcontractor has just released his lien rights for the work done between the date he requested payment and the date he signed the release.

If there is any delay between your request for payment and the date you are signing the release, you must make sure that what you are signing is consistent with the payment that is actually being made. Do not just rely on the title of the document or the honesty or good intentions of the parties you are dealing with. If the lien release does not accurately reflect the work being released and the payment being received, then you or your construction lawyer need to insist that changes are made so that the release accurately reflects the payments taking place and the work being released.

It is always the best practice to indicate exactly the last date of your services being satisfied by that payment or to note any exceptions to your release. Don’t be afraid to make handwritten changes to the lien release you are being asked to sign if it seems like it is too broad. Florida Statutes contain a statutory form of lien release in Florida Statute §713.20. However, the parties to a project are free to negotiate different forms of lien releases when they are negotiating their contracts. So the time to be thinking about the lien release form is BEFORE you sign your contract.

Any document you sign releasing any of your lien rights will be strictly interpreted. Don’t sign a lien release that is not accurate. Once a lien release is signed and exchanged for a payment, there is no “un-ringing the bell”. So if you are not 100% sure what you are signing, make sure to seek the advice of a South Florida construction lawyer, like me Andrew Wyman, before you put your signature on any lien release.

To learn more about your rights, visit my website today. And if you still have questions, feel free to contact me anytime.

What is a Notice to Owner and why do you need one?

Here is an unfortunate, yet all-too-familiar call I receive as a construction attorney. A subcontractor calls me concerned about getting paid on a project where he has already performed his work. Now, the general contractor who hired him is telling him that he has to accept less money than what was agreed to. The subcontractor is furious and wants to record a lien on the property immediately. My first question to the subcontractor is, “did you serve a Notice to Owner?”  When the answer to that question is “no,” the subcontractor has just learned a hard lesson: If you do not have a direct contract with the Owner, then you cannot wait until the end of your project to protect your lien rights, even with an experienced construction law firm on your side.

The #1 mistake we see subcontractors and material suppliers make is failing to timely serve a Notice to Owner on all proper parties. Failing to timely serve the Notice to Owner is a complete defense to enforcement of your lien rights. By the time you realize that you want or need to protect your lien rights, it can be too late to record the Notice to Owner, and your claim of lien will never be enforceable.

The Notice to Owner must be served no later than 45 days from first furnishing labor, services, or materials at the site. If you are a material supplier, then the Notice to Owner must be served 45 days from your first delivery of materials to the site or, for specially fabricated materials, 45 days from the date you begin manufacturing them. The Notice to Owner must be served on the Owner and every person along the line between your customer and the owner. That means that if you have a direct contract with a subcontractor, then you must serve the Notice to Owner on the General Contractor and the Owner.

So, what’s the solution? Subcontractors and material suppliers, or their construction lawyer, should serve the Notice to Owner on every project as soon as they begin work (you can even serve the Notice to Owner before you start your work). Specific circumstances can shorten this time frame even further, or require additional notices, so be sure to consult with an experienced Florida construction law attorney. The statutory Notice to Owner form can be found in Florida Statute §713.06. And when serving the Notice to Owner, be certain to use the methods identified in Florida Statute §713.18.

Florida’s Construction Lien Law is technical and confusing. Failing to timely serve the Notice to Owner on the proper parties is just one of the many mistakes that can completely destroy a subcontractor’s or material supplier’s lien rights. You do great work. Make sure you know how to protect your right to get paid for it. To properly protect your lien rights, be sure to consult with an experienced South Florida construction lien attorney like me, Andrew Wyman. I understand construction law and am always here to help.

Contact me today.






What can you include in your Claim of Lien?

“Greed is good.” While that famous line uttered in the movie Wall Streetmight apply to corporate raiders like Gordon Gecko, it does not apply to lienors under Florida’s Construction Lien Law. Emotional, unpaid subcontractors come to my construction law firm wanting to exact revenge on the people who haven’t paid them by trying to include any and every charge they can think of in their Claim of Lien: interest, attorneys’ fees, cost of filing the Claim of Lien, overhead, lost profits, and so on.

But that is not permitted under Florida’s Construction Lien Law. You can only record a Claim of Lien for the work you have actually performed or for the materials you have furnished to the project. You cannot include amounts for unperformed work, even if you were wrongfully terminated from the project. You can add unpaid finance charges, but you cannot include any other administrative costs or attorneys’ fees in your Claim of Lien. You also cannot include lost profits or overhead or costs related to the preparation of the lien. Including impermissible charges in your Claim of Lien not only invalidates your lien, but it can subject you to liability for recording a fraudulent Claim of Lien.

Florida Statute §713.08 identifies the important and required information that you or your construction lien attorney must also include in your Claim of Lien aside from the value of your work performed and amounts unpaid. Generally, this includes the legal description of the property, the first and last dates that you furnished labor, services or materials to the project, the identity of the owner and the description of the work you performed, the date you served your Notice to Owner and certain statutory warnings. An experienced construction lien lawyer can help guide you through the process of gathering this information.

Florida’s construction lien law is very technical, and the slightest mistake can destroy your lien rights. Be sure to consult with a South Florida construction litigation lawyer who understands the lien law and who can provide you with the resources you need to always protect your lien rights.

If you have questions about Claim of Liens, contact me today to learn more.

How a construction lien attorney can help you file your Claim of Lien

As is true for most things in life, “timing is everything”. This is especially true under Florida’s Construction Lien Law.  As a construction law firm, a common mistake we see made by subcontractors, material suppliers, and even contractors who have a direct contract with the Owner, is failing to timely file their Claim of Lien. Making that mistake is fatal to your lien rights – end of story. By speaking with a construction attorney, you can avoid this mistake.

Some subcontractors think that their Notice to Owner serves as their Claim of Lien. It does not. The Notice to Owner is merely the first step a subcontractor or material supplier takes to preserve their right to record a Claim of Lien. But the Claim of Lien is its own, separate document that must also be completed properly and recorded timely to be enforceable.

Under Florida Statute §713.08, the Claim of Lien may be recorded at any time during the progress of the work or thereafter, but not later than 90-days after the final furnishing of the labor or services or materials by the lienor. This does not include punch list work. This timeframe cannot be extended by a written agreement or even with the written consent of the Owner. And take note; that to be effective the Claim of Lien must timely be recorded in the clerk’s office of the county where the property is situated. Service of the Claim of Lien on the Owner does not by itself preserve your lien rights.

What happens if the contractor or subcontractor who hired you is terminated from the project? How does that affect your timeframe for filing the Claim of Lien? In that case, the lien must be recorded within 90 days of the contractor being terminated, even if that date is sooner than or earlier than 90 days from your last work. During this situation, it may be wise to consult with a construction dispute lawyer.

For those who are not familiar with it, Florida’s Construction Lien Law is filled with traps. The lien laws are very technical and any misstep in the preparation or recording of a Claim of Lien can absolutely destroy your lien rights. Consult with a South Florida construction attorney, like me, Andrew Wyman, to obtain the tools and advice you need to make sure you properly and timely preserve your lien rights.

Do you need a construction litigation lawyer to help enforce your Claim of Lien?

If I’ve seen it once, I’ve seen it 100 times. Subcontractors, material suppliers, and even contractors who have recorded liens, wait too long to file suit to enforce their liens, neglect to contact a construction dispute lawyer, and lose their lien rights forever. They will record their Claim of Lien, and then sit back and do nothing, hoping that the Claim of Lien by itself will force the Owner to eventually make a payment. That is a strategy that is destined to fail.

As an experienced construction law firm, once we record a Claim of Lien for a subcontractor or material supplier client, we advise our client not to wait too long before trying to enforce their lien by the filing of a lawsuit. However, subcontractors will often delay or hold off in filing a lawsuit to enforce their lien because they are in discussions with the contractor or the owner about getting paid and because there are legal fees involved in filing that lawsuit that the client is usually looking to avoid. But you need to understand that no amount of negotiations can revive your lost lien rights if you wait too long to file that construction lawsuit.

Florida law requires that a commercial construction lawsuit to foreclose a claim of lien must be filed within one year from the date it is recorded. If you or your construction lien lawyer do not file suit to enforce that lien within that one-year period of time, your lien automatically expires and is no longer a lien on the property. At that point, it becomes unenforceable. Owners, especially savvy Owners, will try to take advantage of an unrepresented lienor and drag out payment discussions until this one-year period expires.

We have also seen subcontractors enter into agreements where they agree to hold off on enforcing their Claim of Lien in exchange for a written agreement by the Owner consenting to extend the one-year deadline; however, there is absolutely no authority whatsoever that those agreements are enforceable. Likewise, re-recording a Claim of Lien does not extend your time to file suit to foreclose the lien. That one-year deadline must be treated as if it was written in stone.

So what do you do? Even after recording your Claim of Lien, do not ease off of the Owner in your efforts to get paid. Keep applying constant pressure. Do not wait too long before initiating the Claim of Lien foreclosure process. Under no circumstance should you let your Claim of Lien sit for even close to one year before filing a lawsuit to enforce it. Claims of lien cannot be extended beyond one year without the filing of a construction lien foreclosure lawsuit.

A knowledgeable South Florida construction lien attorney, like Andrew Wyman, can protect your lien rights, help you understand Florida Construction law, and also provide assistance so you get paid and keep your business cash flow positive. Consult a Florida construction law attorney early and often to make sure you do not make a mistake that costs you money.