What the Construction Lien Law Does
Chapter 713 Part I of the Florida Statutes allows those who improve real property to secure payment by recording a claim against the property itself rather than pursuing only the person who engaged them.
The consequence for an owner is set out in the warning the statute itself requires. Florida's construction lien law allows some unpaid contractors, subcontractors and material suppliers to file liens against your property even if you have made payment in full. Your failure to make sure that they are paid may result in a lien against your property and in your paying twice. To avoid that, you must obtain a written release from them every time you pay your contractor.
Why Would I Owe Money Twice?
The Notice to Owner
The mechanism that makes it visible, and the reason unopened mail after a fire is expensive.
A lienor not in direct contract with the owner must serve a Notice to Owner stating the lienor's name and address, a description of the real property and the nature of the services or materials being furnished. It must be served before commencing, or not later than 45 days after commencing, to furnish labour, services or materials, and in any event before the owner disburses final payment after the contractor has furnished the required affidavit.
What Should I Do When One Arrives?
The Notice of Commencement
The owner's own filing, and the statute goes to unusual lengths to make sure you know about it.
Under section 713.135, when a person applies for a building permit, the issuing authority must print on the face of each permit card, in no less than 14-point capitalised boldfaced type, a warning that the owner's failure to record a notice of commencement may result in their paying twice for improvements to the property, and that a notice of commencement must be recorded and posted on the site of the improvement before the first inspection.
A notice of termination is effective to terminate the notice of commencement at the later of 30 days after its recording or the date stated in it, provided it has been served on the contractor and on each lienor with a direct contract or who has served a Notice to Owner.
We publish no assessment of any particular lien, notice or document, and nothing here is legal advice. Chapter 713 is technical, the consequences are financial and immediate, and a Florida construction lawyer is the right reader for your specific paperwork.
The Second Body: Assignments of Benefits
An assignment of benefits transfers your contractual rights under the insurance policy to another party. Once made, the assignee gains authority to enforce the insurance contract, including taking action against the insurer.
House Bill 7065 took effect on 1 July 2019 as section 627.7152, regulating post-loss assignments, and created section 627.7153 setting standards for policies restricting the right to assign. Insurers offering restricted policies had to notify insureds at least annually of the assignability options available and attach that notice to the premium notice, and a restricted policy had to be offered at a lower cost than an equivalent unrestricted one.
And Then What Happened?
What the Ban Means for an Owner
Both better and worse than it is usually described, and worth being precise about.
Better: an assignment was generally permanent subject to limited exceptions, and it transferred control of the claim. An owner who disliked how a contractor was handling the scope of repairs had little recourse afterwards.
Worse: without a valid assignment the service contract is between you and the contractor. The insurer owes only what the policy covers, and any denial or underpayment leaves you responsible for the balance, with the contractor able to pursue liens and collections to recover it.
What About a Direction to Pay?
The Estimate Requirement
A smaller provision that is worth using. Section 489.147 of the Florida Statutes requires a detailed, itemised estimate before work is authorised.
After a fire that requirement is frequently honoured in the breach, because the work begins under pressure and the paperwork follows. An owner who insists on the itemised estimate first is both complying with the statute's expectation and creating the document that later makes releases and payments checkable.
Three Documents, Three Consequences
A work authorisation. Engages the contractor and creates your obligation to pay. It does not transfer your policy rights.
A direction to pay. Asks the insurer to remit to the contractor. It does not transfer your policy rights either, and it does not remove your liability for a shortfall.
An assignment of benefits. Transfers your rights under the policy. Unavailable on policies issued or renewed from 1 January 2023.
All three are routinely presented within the same hour after a fire, frequently on a phone, frequently by somebody being genuinely helpful. They are not interchangeable.
Your Options, Compared
Nobody has worked on the house. The simplest position available, and the one that gives the cleanest sale.
Work done and fully released. Written releases obtained at each payment, so the lien exposure is closed.
Work done, releases unknown. The common position, and one that a title search will resolve before any closing does.
A lien already recorded. Not fatal to a sale and it must be cleared, bonded or resolved for one to close.
Across Jacksonville and the Region
Records are held county by county. The older neighbourhoods west of downtown are covered under Riverside, Avondale and Murray Hill, the historic core under Springfield and the urban core, and the south-east under Arlington and the Southside. Further pages deal with the Northside and Oceanway, the Beaches communities and the Westside and the surrounding counties.
Those surrounding counties include Clay, St. Johns, Nassau and Baker, taking in Orange Park, Middleburg, Fleming Island, Green Cove Springs, Ponte Vedra, Fernandina Beach and Macclenny. Within Duval, the separately incorporated municipalities of Jacksonville Beach and Baldwin administer their own permitting, as do the other beach cities.
The full index is on our service area index.
Rules Questions
How Do I Find out If There Is a Lien?
The county clerk's official records are searchable and a title search will find anything recorded. It is worth doing before you take offers rather than during a closing.
Should I Stop Paying My Contractor?
Not on our say-so. What you should do is obtain written releases with each payment, which is exactly what the statutory warning tells you to do.
Is an Assignment I Signed in 2021 Still Valid?
That depends on the document and on the law in force when it was made. It is a question for a lawyer and worth answering before a sale rather than during one.
Primary Sources
- Chapter 713 Part I, Florida Statutes — the Construction Lien Law
- Sections 713.06, 713.13 and 713.135 — notices, recording and permit card warnings
- Section 627.7152 as amended by Senate Bill 2-A, signed 16 December 2022
- House Bill 7065 (2019) and section 627.7153 — restricted assignment policies
- Sections 489.147 and 627.70154, Florida Statutes