Based on the law of the state of Florida, those who work in a property or offer materials, and are not fully paid, have the right to claim payment against the property. This is known as a construction lien. So, if the holder of a Florida contractors license fails to pay his or her suppliers for materials or subcontractors, the individuals who are owed money could look to the property as payment.
What this indicates is that if a lien is filed against a property, the property can be sold against the will of the owner in order to compensate for the materials, labor, or other related services that the holder of a contractor’s license in Florida failed to pay.
Here is more information on avoiding construction liens on property when hiring a FL contract license holder and having improvements of greater than $2,500.
Is There a Way to Protect Myself If the Holder of a Florida Contractors License is Paid in Full but Fails to Pay Contractors or Suppliers?
Yes! First of all, create a written statement that takes away your property from lien threats. This is called a Release of Lien. Prior to making any payment to a licensed contractor, make sure you get this waiver from your subcontractors and suppliers, encompassing the work done and the materials used on the property.
Ask the general contractor license holder, to share the list of suppliers and contractors they have further sub-contracted for material and other related services for the property. Ask them to send you the details through registered mail.
If the contract includes partial payments prior to work completion, you can get a Partial Release of Lien. This covers all the materials and workers used up to that point.
Prior to making the last payment to the contractor’s license holder, request an affidavit from the holder of the general contract license in Florida that indicates all the unpaid parties who gave their services, labor, or materials to the property. Double check that the holder of the Florida contractors license gives the final releases to these parties prior to making the last payment.
Why is It Also Important to File a Notice of Commencement Prior to Starting a Construction or Remodeling Project?
The Notice of Commencement includes the intent to start improvements, property location, work description, and bond amount (if any). It also indicates the property owner, the contractor, lender, surety, and other relevant information. Filing this document is very important because if you failed to record a Notice of Commencement or even submit incorrect data on the Notice, you may have to pay double for the same amount of materials or work.
The Lien Law is Very Complicated
The lien law is very complicated and cannot be comprehensively discussed in this one article. To be able to follow the law to the letter and know how to file the Notice of Commencement correctly (to avoid any unwanted payouts), connect with us at Contractors Reporting Services in Tampa, Florida. Let our professionals take over these overly detailed matters and ultimately lead you to the right way.