Florida’s Construction Lien laws are a complex web of requirements to establish and maintain a lien on property to secure payment for work you’ve done. Successfully check all the boxes, and you have a powerful tool to ensure you are paid. But make a misstep early in the process—or fail to keep up with the requirements—and your lien can vanish! Recently, an electrician lost its lien for failing to follow through on the lien law requirements through the end.
In Managment & Consulting, Inc. v. Tech Electric, Inc., a general contractor hired an electrician to perform work on a project. Ultimately the electrician was terminated from the project and filed a lien against the property. In response the general contractor filed suit to discharge the lien under 713.21, Florida Statutes.
Section 713.21, Florida Statutes, requires that once a lienor is served with the complaint, the lienor must file suit to foreclose its lien within 20 days or demonstrate good cause why the lien foreclosure suit should not be filed within that time period. The requirements for showing good cause are very strict and limited. The purpose of the statute is to require a lienor to take quick action to foreclose its lien to more quickly resolve the encumbrance on the property owner’s property.
Turning back to the case at hand, in response to the lawsuit, the electrician did not file a suit to foreclose its lien. Instead, it filed a sworn response to the order to show cause explaining why the lien was valid. Ultimately, the electrician did not file its lawsuit to foreclose its lien until 47 days after the deadline to do so under 713.21, Florida Statutes.
The court found that this was not sufficient compliance with the statute and required the electrician’s lien to be discharged. Specifically, the court reasoned that 713.21, Florida Statutes, requires a lienor to do one of two things: (1) foreclose its lien, or (2) show good cause why the lien should not yet be foreclosed. The electrician’s filing explaining why the lien was valid did not explain why the lien foreclosure should be delayed, and accordingly did not meet the requirements of 713.21, Florida Statutes.
The key takeaway from this case should be that Florida’s construction lien law requirements are detailed, specific, and continue long after the notice to owner is sent or the lien is filed. It is critical that contractors and subcontractors pay close attention to lien law requirements and deadlines and that they work with attorneys or other professionals who are similarly familiar with their requirements.