Liens are critical to contractors. Without them contractors could lose an important tool to collect monies owed. But it would be a mistake to assume that your lien rights can’t be modified once your lien is filed. There are at least three ways your lien rights may be shortened.
The owner terminates the notice of commencement
Owners may do this for several reasons. The two most common involve the replacement of the contractor or the re-financing of the project. When an owner terminates the notice of commencement, and you receive a notice pursuant to Florida Statutes Chapter 713, you only have 30 days (not 90 days) from the day of termination to record your lien on the property. If you don’t record your lien during those 30 days, then your lien right for any amount outstanding for the work done before the owner terminates the notice of commencement will expire, and you will no longer have those lien rights.
Here is a pro tip for you if you get the termination of a notice of commencement. Know that you need to be paid any amount that is outstanding including your retainage before the 30-day period expires so that you don’t lien. You should send a new notice to owner for the period of time once you recommence the work so there is no doubt whatsoever that you have lien rights not only for the old work but for the new work as well.
As you know, the rule is that you have one year from the recording date of the claim of lien to file your lawsuit to foreclose on that lien. That period is shortened down from one year to a substantially shorter period when you receive a notice of contest of lien. Notice of contest of lien is a document that you receive via certified mail and it reduces the time you have to file a lawsuit down to 60 days. Upon the filing of a notice of contest of lien, a lienor must file a lawsuit to foreclose on the lien within 60 days. Don’t do so and your lien will expire.
20-days summons to show cause
Another way that your lien rights may be shortened is through a 20-days summons to show cause. This shortens the time you have to take action down to 20 days – even less time for you to engage a lawyer and file a lawsuit to foreclose. If you do not timely foreclose on your lien by the expiration of the 20th day, your lien right will no longer exit.
If you receive any of these documents, be sure to act and act quickly, obtaining the advice of your construction expert.