The
following is a copy of the "Now
You Know" brochure produced
by DBPR According
to Florida law, those who work on
your property or provide materials,
and are not paid-in full, have a
right to enforce their claim for
payment against your property. This
claim is known as a construction
lien.
If your contractor fails to pay subcontractors
or material suppliers or neglects
to make other legally required payments,
the people who are owed money may
look to your property for payment,
even if you have paid your contractor
in full.
This
means that if a lien is filed against
your property, it could be sold
against your will to pay for labor,
materials or other services which
your contractor may have failed
to pay.
This
document explains Florida Statute
713,
Part 1 ,
as it pertains to home construction
and remodeling, and provides tips
on how you can avoid construction
liens on your property.
Protecting
Yourself
If you hire a contractor and the
improvements cost more that $2,500
($5,000 for a/c replacement), you
should know the following:
- You
may be liable if you pay your
contractor and he then fails
to pay his suppliers or subcontractors.
There is a way to protect yourself:
A Release of Lien is a written
statement that removes your
property from the threat of
lien. Before you make any payment,
be sure you receive this waiver
from suppliers and subcontractors
covering the materials used
and the work performed.
- Request
from the contractor, via certified
or registered mail, a list of
all subcontractors and suppliers
who have a contract with the
contractor to provide services
or materials to your property.
If your contractor calls for
partial payments before the
work is completed, get a Partial
Release of Lien covering all
workers and materials used to
that point.
- Before
you make the last payment to
your contractor, obtain an affidavit
that specifies all unpaid parties
who performed labor, services
or provided materials to your
property. Make sure that your
contractor obtains releases
from these parties before you
make the final payment.
- Always
file a Notice of Commencement
before beginning a home construction
or remodeling project. The local
authority that issues building
permits is required to provide
this form. You must record the
form with the Clerk of the Circuit
Court. Also post a certified
copy at the job site. (In lieu
of a certified copy, you may
post an affidavit stating that
a Notice of Commencement has
been recorded. Attach a copy
of the unrecorded Notice of
Commencement to the affidavit.)
- In
addition, the building department
is prohibited from performing
the first inspection if the
Notice of Commencement is not
also filed with the building
department. You can also supply
a notarized statement that the
Notice has been filed, with
a copy attached.
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The
Notice of Commencement notes
the intent to begin improvements,
the location of the property,
description of the work and the
amount of bond (if any). It also
identifies the property owner,
contractor, surety, lender and
other pertinent information.
Failure to record a Notice of
Commencement or incorrect information
on the Notice could contribute
to you having to pay twice for
the same work or materials.
Whose
responsibility Is It To Get
These Releases?
You can Stipulate in the agreement with your subcontractor that he must provide
all releases of lien. If it is not a part of the contract,however, or you act
as your own contractor, YOU must get the releases.
If
you borrow money to pay for improvements
and the lender pays the contractor(s)
directly, instruct the lender
to get the releases before making
any payments. If your lender
then fails to follow the legal
requirements, the lending institution
may be responsible to you for
any loss.
What
Can Happen If I Don't Get Releases
Of Lien?
You will not be able to sell your property unless all outstanding liens are
paid. Sometimes a landowner can even be forced to sell his/her property to
satisfy a lien.
Who
Can Claim A Lien On My Property?
Contractors, labors, material suppliers, subcontractors and professionals such
as architects, landscape architect, interior designers, engineers or land surveyors
all have the right to file a claim of lien for work or materials. Always get
a release of lien from anyone who does work on your home.
Additional
Tips On Home Construction.
- Verify
that your contractor is properly
licensed. Information regarding
licensing can be found at DBPR for
state certified contractors
and at PCCLB for county licensed
contractors.
- If
you intend to get financing,
consult with your lender
or an attorney before recording
your Notice of Commencement.
- Insist
that the contractor/remodeler
secures a building permit
and adhere to all building
codes and ordinances.
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Information
All Construction Contracts
Should Contain.
- The
contractor's name, address,
telephone number and the
contractor's license number.
- A
precise description of work
and materials to be supplied.
The contract should specify
the grade of construction,
flooring and trim materials
to be used. Don't accept
the phrase "or equivalent:;
the contract should specify
appliance model and alternates
for models if not available.
- A
beginning date.
- A
completion date.
- A
complete list of companies
or individuals supplying
the contractor with labor
and materials. Be sure they
are insured so you are protected
against theft or damage to
their supplies or work.
- Financing
information and the payment
schedule.
- All
necessary building permits
or licenses.
- Agreement
regarding site clean-up and
debris disposal.
- All
warranty agreements.
- Ask
for explanations and clarifications
of legal terms or confusing
language. Be sure you understand
completely what you are signing: Remember,
promises are difficult to
enforce unless they are in
writing. Even for small jobs,
have a written contract spelling
out the details. Be wary
of anyone who says, "We
don't bother putting it in
writing
Some
contractors require a down payment
of 10-30 percent of the total and
an additional payment at the halfway
point in the project. Pay only when
the work is done to your satisfaction
and you have releases of lien as
described previously. If the completion
date is critical, like a swimming
pool planned for summertime use,
link payment to on-time performance.
Changes to a contract after construction
has begun can cost you. Specify
in the contract how changes are
to be handled and insist that all
change orders be in writing and
signed by both you and the contractor.
Cancellation
Of Contractors
Some home repair/improvement contracts
can be cancelled in writing (preferably
by certified mail) without penalty
or obligation by midnight of the
third business day after signing.
They include:
- Those
signed anywhere other than the
seller's normal place of business.
- Those
signed as a result of door-to-door
solicitation, except emergency
home repairs.
- Those
paid on an installment basis.
Other
contracts are binding as soon as
they are signed, so be sure before
you sign.
Things
You Should Know Before Starting
The most frequently cited complaints
concerning home remodeling, home
improvements and home repair
are
the cost overruns, missed deadlines
and inferior workmanship. Another
persistent problem is "fly-by-night" contractors
who take deposits or payments
before finishing or starting
work.
When
you need something done to your
home, choose a contractor carefully.
Be wary of door-to-door salespeople
and telephone solicitors promising "this-month-only" bargains.
Make sure your contractor is
properly
licensed and insured.
The
Construction Lien Law is complex
and cannot be covered completely
in this document. We recommend that
whenever a specific problem arises,
you consult an attorney.
Last Updated April 11, 2007
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