Chapter on Construction Liens

Introduction

• Important chapter for exams, especially on lien law.
• Expect numerous exam questions on construction liens.

Construction Lien Basics

• A construction lien is a claim against real property to secure a debt incurred for property improvement.
• Two Basic Elements of a Lien:
  • A debt created by a contract for property improvement.
  • Documentation as public notice of the claim (Claim of Lien).

Page 98-99: Construction Lien Elements

• Debt Creation: Contract to improve property.
• Compliance with Statutes: Recording the lien document as public notice.

Contractor Licensing

• Without a required license, contracts are void, and no lien exists.

Special Rules for Residential Construction

• Contracts for single-family or up to four-unit dwellings must include specific language in bold type.

Property Owned by Married Persons

• If a contract is signed by one married individual, lien rights may still exist.

Small Contract Exemptions

• Contracts under $2500 only grant lien rights to contractors.
• HVAC system repairs under $7500 do not require a notice of commencement.

Notice of Commencement (Page 912)

• Purpose: Source of project information and sets time for lien effective period.
• Must be recorded in public records before work begins, not sooner than 90 days before.

Lien Recording and Payment Priorities (Page 918)

• If funds are insufficient, lien priorities are laborers first, then others.
• Definition of "Lienor" includes contractors, subcontractors, laborers, suppliers.

Notice to Owner (Page 920)

• Non-privity claimants must serve notice to the owner to maintain lien rights.
• Purpose: Ensures payment participation and releases for payment.

Page 923: Serving Notice to Owner

• Actual delivery methods include certified or registered mail, posting at the job site.

Lien Releases (Page 928)

• Required on most jobs; types include releases through specific dates or sums.

Claim of Lien (Page 928)

• Document recorded as public notice of lien claim must contain specific information.
• Must be recorded within 90 days of last work or contractor termination.

Lien Duration and Contest (Page 931)

• Claim of lien lasts one year unless contested or enforced.

Retaking Materials (Page 941)

• Materials can only be retaken if not installed and involve providing full sales credit.

Fraudulent Liens (Page 941)

• Filing a fraudulent lien is a felony of the third degree.

Lien Transfer Bonds (Page 944)

• Important for exams; involves transferring lien claims to bonds.

Payment Bonds

• Payment bonds act as financial guarantees, not insurance.
• Involve contractors, subcontractors, and sureties.

Types of Bonds

• Common law and federal public works payment bonds, including the Miller Act.

Florida Statutes on Liens (Pages 972-986)

• Covers detailed rules such as notice, duration, and penalties for fraudulent claims.

Conclusion

• Chapter contains significant information on construction liens crucial for exams.
• Reading the entire chapter is essential despite highlights, as all content is testable.

Final Advice

• Understand everything covered, as exams hold all content accountable.
• For questions or clarification, seek help or engage with the content thoroughly.