There are 3 milestones and 3 deadlines of significance in the construction lien law.
Each of these is discussed in detail below:
Milestone 1 - Date of first supplying labor or materials
Deadline 1 - Service of Notice to Owner (within 45 days)
Milestone 2 - Date of last furnishing of labor or materials
Deadline 2 - Recording of Claim of Lien (within 90 days)
Milestone 3 - Date of Recording of Clarim of Lien
Deadline 3 - Enforcement of Claim of Lien (within 1 year)
First Supplying of Labor or Materials
The first date of supplying labor or materials is critical because it is from this date that the time frame within which the notice to owner must be served begins to run. This date is usually obvious. A material supplier's first date of delivery to a project would be the date that the materials first arrive on the project. A subcontractor's first supplying of labor or materials to a project would be the date that the subcontractor first went to the project and performed the work.
At least two Florida Appellate Court decisions have held that the first day of supplying labor and materials may be a date much earlier than contemplated. In the case of Oolite Industries, Inc. v. Millman Construction Company, 501 So 2d 655 (Fla. 3d DCA 1987), it was held that as to the supplier of specialty fabricated materials, the first date of supplying labor or materials and thus the date from which the time frame for service of a notice to owner would run, began on the date that fabrication of the specialty fabricated materials commenced despite the fact that delivery of the materials to the site might not take place for some time. In Essex Crane Rental Corp. of Alabama vs. Millman Construction Company, 516 So. 3d 1130 (Fla 3d DCA 1987), the first date of delivery of materials was said to commence when portions of a crane were delivered to a project even though the crane was not assembled and put into use until several months later. In both cases the lienor has used a later date as its first date of supplying labor and materials. Based on the Appellate Court decisions, both lienor's were considered to have served late notices to owner, and, therefore, had lost their lien rights.
Service of Notice to Owner
The notice to owner must generally be served within 45 days of the lienor first supplying labor or materials to the project. However, the notice must be served earlier than the time of owners disbursing final payment to the contractor in reliance upon a final contractor's affidavit.
Since the notice to owner being served too late is a fatal flaw to claiming a lien, it is wise to serve the notice as soon as the subcontract is signed or the purchase order is received. The notice to owner can be served on the owner before work is ever commenced.
The notice to owner need not be served by subdivision improver's, contractors dealing directly with the owner, design professionals or laborers. All other lienor's must serve the notice to owner. A subdivision improver may elect to serve a notice to owner or obtain better protection against the proper payments defense.
Service of the notice to owner is complete upon delivery. Mailing the notice to owner within the 45 day time frame is not sufficient. If a lienor deals with anyone other than the contractor, it must serve a copy of the notice to owner on everyone between its customer, and the owner within the same time frame.
If more than one person owns the real property, service of the notice to owner upon one of them is sufficient.
Last Furnishing of Labor or Materials
The date of last furnishing of labor or materials to a project is important to a lienor because it is from this date that the 90 day time frame for recording a claim of lien begins to run. In calculating the 90 day time frame, the last day of furnishing labor or materials is not included. (Site-Prep, Inc. v. Tal, 472 So 2d 776 (Fla 5th DCA 1985).
It has been said that the test to be applied in determining the date of last work requires to complete the contract as "whether the work was done in good faith, within a reasonable time, and pursuant to the terms of the contract and whether is was necessary for a finished job." Sentry Trust Company of Baltimore v. Allison Realty Co. 141 So 612 (Fla 1932). For example, an air conditioning subcontractor who is required to start up the equipment as an integral part of its contract may have several months go past before it is able to provide that service. Its lien rights, however, would extend from the date that the start up took place, as that was work "in pursuance of the terms of the contract and necessary for the finished job." (But note that if one waits more than 90 days to go back for start-up and then is told to cease work, lien rights will have expired.
Florida courts have found, however, that the performance of certain work will not be sufficient to extend the 90 day time frame during which a claim of lien must be recorded. In the case of Finney v. Barber Block Plant, Inc. 183 So 2d 698 (Fla 3d DCA 1966), an electrical subcontractor returned at nobody's request but his own to a project some six months after he had last performed work to install a $2.00 pipe on an exposed wire. The court ruled that the installation of the pipe was not the last date of work and that the last date for purposes of determining the 90 day time frame had transpired some six months earlier. It has also been ruled that warranty punchlist work cannot be considered to be the final furnishing of labor or materials for purposes of determining commencement of the 90 day statutory period within which a lienor must file a claim of lien. See Viking Builders, Inc. v. Felices, 391 So. 2d 302 (Fla 5th DCA 1980). In reaching its decision, the Viking Builders court looked at the particular work in question and found that the work was "too remote in time and too unsubstantial and too trivial in quantity to extend the time for filing." The substantial-trivial test has also been used by the Florida Supreme Court in Peoples Bank of Jacksonville v. Virginia Bridge & Iron Co., 94 Fla. 474, 113 So. 680 (1927) where a lienor had delivered 17 lbs. of steel subsequent to a primary delivery of 64,700 lbs. of steel and had attempted to claim that the later delivery extended the time. In that case the Supreme Court held that the furnishing of the 17 lbs. of steel was trivial in nature, as the lienor had already more than substantially completed its obligation under its agreement and was, therefore, insufficient to extend the time for filing a claim of lien.
The 90 day time frame may be shortened. A lienor who is served with an affidavit of abandonment must record its claim of lien, whether or not previously recorded, within 30 days of the notice of abandonment being recorded by the owner, in order to have a "best position" as to liens.
Recording of Claim of Lien
A claim of lien must be recorded no later than 90 days after a lienor's last supplying of labor or materials to a project. If the 90th day falls on a Saturday, Sunday or holiday, the lien may be recorded on the next business day.
The claim of lien is recorded in the county where the real property is located. Within 15 days of recording the claim of lien, a copy is to be served on the owner of the real property.
If necessary, the claim of lien may be amended at any time within the original 90 day time frame available for its recording. When a claim of lien is amended, it should clearly indicate on the amendment that it related to the original claim of lien as recorded. The amended claim of lien related back to the original claim of lien and, therefore, the one year time frame within which lawsuit must be recorded would run from the date of the original claim of lien being recorded.
Suit to Enforce Lien
An action to enforce a construction lien must be brought within one year of the recordation of the claim of lien. If an action to foreclose on the lien within that one year is not brought, the lien will automatically expire by law.
The one year time frame may be shortened by the recordation of a notice of contest of lien or through service of a summons to show cause why the lien should not be discharged. The recording of a satisfaction or release of lien will also effectively discharge the lien within the one year time frame.
When a notice of contest of lien is recorded by an owner, his agent or attorney, the time frame within which suit must be brought is decreased to 60 days from the date that the Clerk of the Court mails the notice to the lienor. When a summons to show cause is served, a lienor must, within 20 days, show cause why his lien should not be discharged. The easiest wayto show cause is by filing foreclosure counterclaim.
The life span of a claim of lien cannot be extended beyond on year time frame except through an action to enforce the lien. There is no provision available for the recording of renewal of a claim of lien.
Written by: Kathleen R. Bente, Esp. of Smoller, Lerman, Bente, and Whitebook
Distributed by: Builders Notice Corp.