Dealing with Claim of Lien Errors

A lien can often be prepared quickly, maybe too quickly. After all, it is just a simple form which you fill out and file, right? Not really. Any one of the following errors could invalidate your lien, causing you to lose this all important ability to protect your right to be paid.

Double check each lien before it is filed. It may sound easy enough, but some of the lien law’s requirements may not be so clear. For example, where is the right county to record your lien – is it where the property is located or where the lienor’s business is located? The lien is going to encumber the property improved by your work so it is always filed where the property is located. Filing on time also seems pretty straightforward; however, knowing the correct time-frames applicable to a particular lien can make all the difference. Your calculation should be based on calendar not business days. Many contractors make this next mistake, exaggerating the amount of their lien. Rounding out the amount or putting in an estimated cost to complete versus the correct contract balance – neither would be correct. And finally does your lien actually cover lienable items – work which improved the property and is considered lienable under the applicable statute?

You’ve filed a lien because you’re concerned about getting paid. The last thing you want is a document that won’t stand up to the scrutiny of a construction expert or a judge. You want that lien to be right.

Mistake in a Claim of Lien, What Could Happen?

A lienor should not intend to rely on the equity of a court to overlook an error in a Claim of Lien or Notice to Owner.  This would be a gamble with dire consequences.  Similarly, an owner should not expect that a technical oversight on the part of a lienor will necessarily result in an invalid lien. This is especially true if the owner was aware of the error early on and chose to do nothing about it.

All in all, a lienor would be smart to catch and correct any errors, no matter how minor, before filing that Florida claim of lien.

What happens if you filed your claim of lien with a typo, misprint or other insignificant mistake? Not much, not if you have substantially complied with the Notice to Owner and Claim of Lien requirements as to content and time. As any Florida construction lawyer will tell you, minor errors or omissions should not prevent the enforcement of a Claim of Lien against a person who has not been adversely affected by such omission or error. Complying with all the technical statutory components for filing a claim, while desirable, is neither required nor should it form the basis for denial of the enforcement of an otherwise valid lien. But a lienor must still be careful. All this could quickly change if some prejudice is shown to the owner or another affected party.

Here are 6 quick ways to lose your claim of lien:

1. Not serving a Notice to Owner on any owner with whom you don’t have a direct contract.
2. Not filing a separate lien for each direct contract.
3. Failing to file suit to enforce your lien within 60 days of receiving a Notice of Contest of Lien.
4. Misapplication of a partial payment of materials.
5. Not furnishing a Statement of Account within 30 days of demand.
6. Refusing to provide a list of subcontractors and suppliers who have a contract to furnish material or services.

Don’t make these mistakes. Know the law by downloading the #1 guide to Florida’s construction lien law, Sink or Swim: Navigating Florida’s Lien Law. You’ll learn when and how to record a construction lien that can be enforced.

Caution: That Lien Can Be Wiped Out!

Owners are always eager to cancel any recorded liens. What a lot of contractors don’t know is that there are actually legal ways in which a lien can be extinguished.

Notice of Contest of Lien

One way to accomplish this is to serve a Notice of Contest of Lien. Specifically, the lien upon whom such notice is served shall be extinguished automatically unless the lienor institutes a suit to enforce his or her lien within 60 days. The clerk shall mail a copy of the Notice of Contest to the lien claimant at the address shown in the Claim of Lien. Service shall be deemed complete upon mailing. The Notice of Contest acts by operation of law to automatically discharge a lien on 60th day without any intervention of the court.

Filing Suit to Show Cause

A more drastic method for shortening the limitation period associated with a Claim of Lien is to file a complaint against the lienor demanding that the lienor show cause why the lien in question should not be vacated. Upon the failure of the lienor to show cause why the lien should be enforced or the lienor’s failure to commence such action before the return date of the summons, the court shall immediately order cancellation of the lien. A lienor’s motion for extension of time to respond to the property owner’s motion for discharge of lien does not constitute “good cause” as required by the mechanic’s lien statute for tolling of the statutory 20-day period. Strict compliance with statutory provisions is required in order to protect a lien. The court has no discretion to extend the 20-day period, even if the lienor requests additional time to obtain counsel.

All pretty harsh results – lienors should not assume that their liens will remain in place for a year when confronted by either a Notice of Contest of Lien or a suit to show cause why a lien should be enforced. Ignoring these filings would be a big mistake.