Construction Liens: 3 Protective Steps Every Homeowner Must Follow

Whether you’re a homeowner about to start construction or a title agent working to close a sale or refinance, you’re probably not maximizing your protection under Florida construction lien law.  Florida Statute Chapter 713 sets out easy steps to ensure you’ve maximized your protection under the law.

Step 1: File a Notice of Commencement

Florida law states that a Notice of Commencement form should be filed whenever construction is going to exceed $2,500.  This form puts all potential lienors on notice that construction is being performed and it protects the homeowner against paying for construction twice; once to the general contractor and another time to subcontractors who have not provided notice. Homeowners who do not file a Notice of Commencement are not guaranteed protection from this.

Step 2:  Keep Track of Notices to Owner

What’s a Notice to Owner you ask?  If a Notice of Commencement was properly recorded, all subcontractors who the homeowner is not in direct contract must serve a Notice to Owner form on the homeowner or risk losing the ability to file a valid lien.  Now that the homeowner is on notice/aware the subcontractor is performing work or providing materials, the subcontractor is able to file a valid lien against the property if they’re not paid. 

Step 3:  Work Off of the Contractor’s Final Payment Affidavit

Before construction is about to end, the homeowner should request a “Contractor’s Final Payment Affidavit” from their general contractor.  This form will set out how much the contractor is owed and more importantly, how much is owed to any subcontractors who have given Notice to Owner or are within 45 days of commencing their work.  As long as these two groups of people are paid, no other parties can file a valid lien against the homeowner.  A sophisticated homeowner will work with their contractor to ensure all subcontractors listed on this Affidavit are paid (obtaining Lien Waivers from them) – prior to paying the contractor their final amount due.

Most homeowners would follow these steps if they knew about them.  Instead, they’re left relying on their lender and contractor to hopefully follow the rules.  The above 3 steps were just a general overview of Florida construction lien law and how, if understood, can protect a homeowner.  Look to our comprehensive eBook for forms to complete, details and answers to frequently asked questions.

Construction Liens: Protect Yourself!

This is a must-have resource for any homeowner considering having construction or improvements done to their house. Florida law will protect the homeowner, but only if specific steps are followed. Also a great resource for title agents working through existing lien issues.

Specifically detailing:

  • Notice of Commencement
  • Notice to Owner
  • Lien Waivers
  • Contractor Final Payment Affidavit
  • Notice of Termination
  • Frequently Asked Questions
  • All forms provided in WORD
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