Ask Andy: Construction Liens
Question (asked by a fellow attorney “Rob”): Hi Andy. I have a client with a small dispute with a contractor. The contractor recorded a lien but it is improper because it was definitely recorded more than 90 days after work was completed, and the pricing on the lien is heavily inflated (could be fraudulent). Best path is to just file a Notice of Contest of Lien, right? Then put the ball in the contractor’s court? Thanks in advance for any thoughts you can share.
Answer: Rob, your client has 4 choices. Three of them require your client to either spend money and/or be prepared to litigate.
First choice: Do nothing and see if the contractor files a suit within the one year time frame. If contractor fails to file suit timely then lien goes away automatically. This costs your client nothing but keeps a lien on their property for at least a year and potentially longer if suit is filed. Contractor would have to serve your client with a Contractor’s Final Affidavit at least 5 days before filing suit.
Second: Record the Notice of Contest of Lien. Contractor would then have 60 days to get that suit filed. This of course invites a lawsuit so they’d need to be ready to pay for and engage in litigation. If the suit is not filed within the 60 days then the lien is extinguished automatically. Contractor would have to serve your client with a Contractor’s Final Affidavit at least 5 days before filing suit.
Third: Your client can file a lawsuit under Fla. Stat. §713.21(4). This lawsuit requires the contractor to show cause why the lien should not either be enforced or vacated and cancelled of record. Basically the contractor would have to countersue your client to enforce the lien within 20 days of service of this lawsuit on them. Their failure to do so eliminates their lien. Contractor would have to serve your client with a Contractor’s Final Affidavit at least 5 days before filing suit. This is the most aggressive position to take and requires your client to also fund litigation. But it also requires the contractor to hire an attorney and pay for litigation as well.
Fourth: Post a lien transfer bond with the court to transfer the lien from the property to the bond. This gets the lien off the property but requires your client to come out of pocket with potentially a lot more money than they’ll want to. But if there is no compelling reason to remove the lien from the property then this is not a great idea.
A lot of contractors file a lien and intend to do nothing about it, especially if they don’t seem to know exactly what they are doing (and especially if it looks like the lien was not professionally prepared). In those instances the 3rd method is the most effective way to get the lien off the property most quickly.
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