Imagine hiring a contractor to remodel your home. You pay the contractor in full, but later, a subcontractor or supplier claims they haven’t been paid. They file a legal claim—called a construction lien—against your property, meaning you could be held responsible for the unpaid debt, even though you already paid the contractor.
Imagine, on the other hand, that you own a plumbing firm hired by a contractor to install the plumbing in a new home. After you front the costs and complete the work, the contractor goes bankrupt and fails to pay your fee. Your best recourse for getting paid is to file a claim of lien against the property, which encumbers the property until your fee is paid by the owners or taken from the proceeds of the sale of the property.
In both cases, the construction lien protects contractors, subcontractors, and suppliers, but can be a source of potential liability for homeowners. To further clarify, you can watch as Board Certified Construction Law attorney Robert Doan gives an overview of construction liens in this video.
The Basics
A construction lien is a legal tool that allows contractors, subcontractors, and suppliers to ensure they get paid for their work. Under Florida law (Chapter 713, Florida Statutes), if these parties are not paid, they can file a lien against the property where the work was done. This lien can make it difficult to sell or refinance the property and, in extreme cases, could lead to foreclosure to satisfy the debt.
Florida law protects both property owners and construction professionals, but understanding how liens work is critical to avoiding costly mistakes. The specific steps required to file, enforce, or defend against a construction lien are complex and subject to strict timing and notice requirements. Therefore, for both homeowners and the contractors, subcontractors, and suppliers who work on their projects, retaining capable legal counsel, such as the attorneys in Cobb Cole’s Construction and Design practice, is essential.
How Do Construction Liens Work?
Scenario 1: How a Homeowner Can Get a Lien on Their Property
Sarah hires a contractor to build an addition to her home. She paid the contractor $50,000, assuming all costs were covered. Months later, she receives a notice from a roofing subcontractor claiming they were never paid. The subcontractor files a construction lien against Sarah’s home. Now, she risks having to pay the roofer again—or fight the lien in court.
Scenario 2: How a Contractor Can Use a Lien to Get Paid
Mark, a subcontractor, is hired by a general contractor to install flooring in a new commercial building. After completing the work, Mark was never paid. To recover his money, he filed a construction lien against the property. The owner, who wasn’t aware of the issue, now faces legal action and must resolve the lien before selling or refinancing.
In both cases, construction liens impact both property owners and contractors, making it essential to understand how to prevent or resolve them.
For legal guidance on construction liens, Cobb Cole’s Construction and Design team helps property owners and contractors manage these complex situations.
Protecting Yourself as a Homeowner
If you’re hiring a general contractor for a construction or renovation project, consider the following steps to help protect yourself:
1. Know Who’s Working on Your Property
Request a list of all subcontractors and suppliers who will be involved in the project. This helps you track who might have the right to file a lien if they aren’t paid.
2. Get a Lien Release with Every Payment
Each time you make a payment, ask for a Partial Release of Lien from subcontractors and suppliers. This document confirms they’ve been paid for the work completed up to that point. Before making the final payment, require a Final Release of Lien from everyone involved.
3. File a Notice of Commencement (NOC)
For projects over $2,500, Florida law requires a Notice of Commencement to be filed with the county before work begins. This document ensures transparency by listing who is responsible for payments.
4. Don’t Pay Until You Verify Payments Have Been Made
Before making payments during the project, request a release of lien through the date of payment for all subcontractors and suppliers from whom you have received a “Notice to Owner,” as defined in Florida Statutes Ch. 713.06. Before making your final payment, require a final release of lien from those same entities, and require the contractor to provide a Contractor’s Final Affidavit listing all unpaid subcontractors and suppliers (also defined in 713.06). If there are outstanding payments, make sure they are paid directly before you release the final payment.
Protecting Your Rights as a Contractor
If you’re a contractor or subcontractor, taking the right steps ensures you can file a lien if needed. Follow these best practices:
1. Serve a Notice to Owner (NTO)
If you’re a subcontractor, sub-subcontractor, or a materials supplier who doesn’t have a direct contract with the property owner, you must send a Notice to Owner (NTO) within 45 days of starting work to preserve your lien rights. It is best practice to send a Notice to Owner on every job because payment disputes may not arise until after 45 days, but the failure to timely serve a Notice to Owner is an absolute defense to lien rights.
2. Keep Detailed Records
Document every aspect of your work, including contracts, invoices, and payment agreements. If payment issues arise, clear documentation strengthens your case.
3. File a Claim of Lien on Time
If all or part of your fee goes unpaid, you must record a Claim of Lien in the official records of the county where the property is located within 90 days of your last day of work (punchlist and warranty work may not count). Missing this deadline will result in losing your right to enforce the lien.
4. Act Quickly to Enforce a Lien
Once a lien is filed, a contractor must file a lawsuit within one year to enforce the lien, or within 60 days of receipt of a statutory Notice of Contest of Lien. Otherwise, the claim of lien expires.
Can Construction Liens Affect Homestead Properties?
Yes. Although Florida law protects homestead properties from most creditors, construction liens are an exception. If a contractor or subcontractor properly perfects their lien rights, they can place a lien on a homestead property and potentially force its sale through the foreclosure process.
The only other entities that can take a homestead property are banks (for unpaid mortgages), the IRS (for tax debts), and local governments (for unpaid property taxes). This makes construction liens one of the few private claims that can threaten homestead ownership.
If you are facing a lien on your homestead, consult an attorney immediately. The skilled Construction and Design attorneys who work at Cobb Cole have extensive experience handling construction lien cases in Florida.
What to Do If a Lien Is Filed Against Your Property
If a lien is placed on your home or business property, an attorney will take these steps:
- Verify the Lien’s Validity – Ensure the lien meets Florida’s legal requirements and was filed on time.
- Negotiate a Resolution – Contact the lienholder to settle the debt, if possible.
- File a Contest of Lien – This option forces the lienholder to enforce the lien within 60 days instead of one year. Pros and cons must be weighed.
- Seek Legal Assistance – Construction liens can have serious consequences. An attorney can help resolve disputes, negotiate settlements, or challenge invalid liens. Proceeding without competent legal advice could have negative consequences.
The Importance of Legal Representation
Construction lien laws are complex, and mistakes can be costly. Whether you are a property owner facing a lien or a contractor needing to enforce one, getting professional legal advice is essential. The content of this blog is a general review and should not be relied on for dealing with a specific legal issue.
For more information, reach out to Cobb Cole to schedule a consultation.
