Florida’s Construction Lien Law, F.S. 713.001 et seq., was recently amended and includes important changes effective October 1, 2023, about which contractors should know. The following is a brief summary of the changes for contractors working on projects in Florida.
1. Definitions were expanded and added to F.S. 713.01, as follows:
- “Contractor” was expanded, and now means “a person other than a materialman or laborer who enters into a contract with the owner of real property for improving it or who takes over from a contractor as so defined the entire remaining work under such contract. The term ‘contractor’ includes an architect, landscape architect, or engineer who improves real property pursuant to a design-build contract authorized by s. 489.103(16). The term also includes a licensed general contractor or building contractor, as those terms are defined in s. 489.105(3)(a) and (b), respectively, who provides construction management services, which include scheduling and coordinating preconstruction and construction phases for the construction project, or who provides program management services, which include schedule control, cost control, and coordinating the provision or procurement of planning, design, and construction for the construction project.” F.S. 713.01(8)
- “Finance Charge” is a new definition, and means “a contractually specified additional amount to be paid by the obligor on any balance that remains unpaid by the due date set forth in the credit agreement or other contract.” F.S. 713.01(13)
2. The way deadlines are computed in F.S. 713.011 was clarified to address holidays and emergency closure of clerk’s offices:
“(1) In computing any time period under this part, if the last day of the time period is a Saturday, Sunday, or holiday specified in s. 110.117(1), or any day observed as a holiday by the clerk’s office or designated as a holiday by the chief judge of the circuit, the time period is extended to the end of the next business day.
(2) If the clerk’s office is closed in response to an emergency for 1 or more days so that a person may not present a document for recording or an action for filing in person to the clerk’s staff, the time period for recording a document or filing an action with the clerk’s office under this part is tolled. When the clerk’s office reopens, the time period is extended by the number of days the clerk’s office was closed.”
3. The effective date of termination now depends on whether contractors are in privity with the owner. The provisions related to Notices of Termination per F.S. 713.132(5) were changed to make the distinction between contractors who have a direct contract with the owners and those who do not, as follows:
“A notice of termination must be served before recording on each lienor who has a direct contract with the owner and on each lienor who has timely and properly served a notice to owner in accordance with this part before the recording of the notice of termination. A notice of termination must be recorded in the official records of the county in which the improvement is located. If properly served before recording in accordance with this subsection, the notice of termination terminates the period of effectiveness of the notice of commencement 30 days after the notice of termination is recorded in the official records or a later date stated in the notice of termination as the date on which the notice of commencement is terminated. However, if a lienor who began work under the notice of commencement before its termination lacks a direct contract with the owner and timely serves his or her notice to owner after the notice of termination has been recorded, the owner must serve a copy of the notice of termination upon such lienor, and the termination of the notice of commencement as to that lienor is effective 30 days after service of the notice of termination.”
4. The ways lien claims are served have also been expanded per F.S. 713.18(1), as more fully explained as follows:
(a) By hand delivery to the person to be served; if a partnership, to one of the partners; if a corporation, to an officer or director; if a limited liability company, to a member or manager; or to an employee or agent authorized by the partnership, corporation, or limited liability company to receive service of such document.
(b) By common carrier delivery service or by registered, Global Express Guaranteed, or certified mail to the person to be served, with postage or shipping paid by the sender and with evidence of delivery, which may be in an electronic format.
(c) By posting on the site of the improvement if service as provided by paragraph (a) or paragraph (b) cannot be accomplished.
F.S. 713.18(2) clarifies that service of a notice to owner or a preliminary notice to contractor per 713.18(1) is effective as of the date of mailing and the requirements for service are satisfied if all of the following requirements have been met:
“(a) The notice is mailed by registered, Global Express Guaranteed, or certified mail, with postage prepaid, to the person to be served and addressed as prescribed in subsection (3).
(b) The notice is mailed within 40 days after the date the lienor first furnishes labor, services, or materials.
(c)1. The person who served the notice maintains a mail log that shows the registered or certified mail number issued by the United States Postal Service, the name and address of the person served, and the date stamp of the United States Postal Service confirming the date of mailing; or
2. The person who served the notice maintains tracking records approved or generated by the United States Postal Service containing the postal tracking number and verification of the date of receipt by the United States Postal Service.”
5. The amount of a bond executed as surety for a lien claimed under the Florida Construction Lien Law was also revised, in F.S. 713.24(1)(b), and must now be “an amount equal to the amount demanded in such claim of lien, plus interest thereon at the legal rate for 3 years, plus $5,000 or 25 percent of the amount demanded in the claim of lien, whichever is greater, to apply on any attorney fees and court costs that may be taxed in any proceeding to enforce said lien.”
6. The statute was also amended to address attorneys’ fees that may be owed, as set forth in F.S. 713.29:
“In any action brought to enforce a lien, including a lien that has been transferred to security, or to enforce a claim against a bond under this part, the prevailing party is entitled to recover a reasonable fee for the services of her or his attorney for trial and appeal or for arbitration, in an amount to be determined by the court, which fee must be taxed as part of the prevailing party’s costs, as allowed in equitable actions.”
This is intended as an overview to important changes to the Florida Construction Lien Law. However, lien and bond issues can be complicated and are fact-specific.
