The lien that costs you: deadlines, amounts and fraudulent-lien exposure under Chapter 713

Issue

A construction lien is the strongest collection tool a Florida contractor has. It is also the one most often turned against the contractor who records it. A lien recorded after the deadline, recorded for more than is owed, or left on the record after the account is paid does not simply fail. It can hand the owner a fraudulent-lien claim, with the contractor paying the owner’s damages and attorney fees.

Overview/Rule

Chapter 713, Florida Statutes, sets the rules. The claim of lien must be recorded within 90 days after final furnishing of labor, services or materials (section 713.08). Final furnishing is the last date the lienor furnished labor, services or materials, and the statute states that it does not include the correction of deficiencies in the lienor’s own prior work (section 713.01). Warranty visits and punch-list corrections do not restart the clock, so it often starts earlier than the contractor believes. A subcontractor or supplier not in direct contract with the owner must also have served a notice to owner no later than 45 days after first furnishing (section 713.06). The statute makes the failure to serve it, or to serve it on time, a complete defense to the lien.

The amount matters as much as the date. A lien is fraudulent when the lienor willfully exaggerates the amount, willfully includes work not performed or materials not furnished, or compiles the claim with such willful and gross negligence as to amount to a willful exaggeration (section 713.31). The consequences run in one direction: the lien is unenforceable, the owner may recover actual and punitive damages plus attorney fees, and willfully recording a fraudulent lien carries criminal exposure. A lien recorded after the account was paid in full, and left in place after the owner demanded its release, is the clearest example.

Owners have fast tools to force the issue. A notice of contest of lien shortens the one-year enforcement window to 60 days (section 713.22). A show-cause complaint gives the lienor 20 days to file suit or the lien is canceled of record (section 713.21(4)). Under section 713.29, the prevailing party in a lien enforcement action recovers attorney fees, so a defective lien can cost the contractor the owner’s legal bill on top of the debt.

The principle: a lien is only as good as its date and its number. Both must be right before it is recorded, and the lien must come off the record promptly once the account is paid.

Future Outlook

Fraudulent-lien claims have become a routine counter-move by owners and their counsel, because fee-shifting makes them inexpensive to bring and costly to defend. Contractors who record liens in-house, from the office calendar and the last invoice, are the most exposed. The lien that is reconciled against the payment history, dated from the last substantive work and released on payment rarely becomes a dispute. The lien that is recorded in a hurry is the one that ends up in court with the contractor as the defendant.

Call to Action for Contractors

If you receive a notice of contest, a show-cause summons or a fraudulent-lien demand, the deadlines are short and the fee exposure runs both ways. Get counsel involved before the response is due.

HD Law Partners represents Florida contractors, subcontractors and suppliers in lien enforcement, lien defense and construction disputes from Tampa, Orlando, Sarasota and Fort Myers.

This summary is provided for informational purposes only and is not legal advice. Every matter is evaluated on its own facts.