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.