Richard Whalen-Mortgage Broker NMLS #318922

Direct: (561) 371-3394

rwhalen@palmbeachmortgagegroup.com www.palmbeachmortgagegroup.com

If a contractor performs work on my property, how can I be certain that all subcontractors and suppliers have been paid?

Generally, Florida law provides that a contractor, subcontractor or material supplier (“lienor(s)”) who provides labor, work, or materials for the improvement of real property have a lien on that property for the value of the materials, labor, or work provided. Florida Statutes Chapter 713 controls the process for perfecting a lien. The statutes are strictly construed and all preconditions to recording a lien (i.e., notice to owner) must be met in order to perfect a lien.

Some contractors, subcontractors, and material suppliers lien the property they are working on as a matter of course (by recording a claim of lien in the public records in the county the property is located ). In the event that the lienor is paid in full, the lienor must “release” or “satisfy” the claim of lien by recording a satisfaction of claim of lien in the public records.

Sometimes, lienors do not record a claim of lien in the public records, but, they have a right to record a lien in the future (Florida law requires that a claim of lien be recorded at any time during the progress of the work or thereafter but not later than 90 days after the final furnishing of the labor or services or materials by the lienor).

The amount a lienor can claim is limited to the value of the services provided minus any amounts already paid. Often, partial payments are made to the contractor during the course of work being performed, thus reducing the value of the lien that a lienor would be entitled to. In order to document the reduction, an owner can (and should) require the contractor to furnish a “waiver and release of lien upon progress payment.” This waiver acts as a receipt which acknowledges payment and expressly releases the lienor’s right to claim a lien for work performed through a certain date.

Similarly, upon making final payment, an owner should obtain a “waiver and release of lien” from the contractor. This waiver acts as a receipt which acknowledges payment and expressly releases the lienor’s right to claim a lien for all work performed.

Additionally, when final payment is due, the contractor must provide a final payment affidavit stating that all lienors who have timely served a notice to owner have been paid in full (or if the fact be otherwise, showing the name of each such lienor who has not been paid in full and the amount due or to become due each for labor, services, or materials furnished).

Navigating liens, waivers, releases, and satisfactions can sometimes be tricky. If you come across a problematic lien, consult a real estate attorney that is familiar with Florida’s Construction Lien Law for advice on solving the lien and to determine your rights and obligations under the statutes. Andrew Pineiro, Esq., Pineiro Byrd PLLC, 4600 Military Trail, Suite 212, Jupiter, Florida 33458, apineiro@pblawfla.com.

Florida 33458, apineiro@pblawfla.com,  http://jupiterrealestatelawyers.com

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