PREPARING CONSTRUCTION CLAIMS OF LIEN
Florida’s construction lien law, Chapter 713, Part 1, Florida Statutes, provides for the filing of a Claim of Lien as a payment safeguard for those providing labor, services and materials to improve real property. The questions today are: (1) who may file a claim of lien; (2) what information must be included in the claim of lien; and (3) who is authorized to prepare and execute a construction claim of lien for filing?
Who may file a Claim of Lien?
For contractors and material suppliers, the lien law provides protection for collecting payment for labor, services or materials provided to improve real property. For owners, protection from having to pay twice for the same labor, services or materials.
A “person” (individual, corporation or other recognized business entity) providing labor, services and materials who has complied with the construction lien law’s prerequisites outlined in the Florida lien law, may record a Claim of Lien against the improved property as security for payment.
Section 713.08, Fla. Stat., outlines the information that must be included in a claim of lien
(a) The name of the lienor and the address where notices or process under this part may be served on the lienor.
(b) The name of the person with whom the lienor contracted or by whom she or he was employed.
(c) The labor, services, or materials furnished and the contract price or value thereof. Materials specially fabricated at a place other than the site of the improvement for incorporation in the improvement but not so incorporated and the contract price or value thereof shall be separately stated in the claim of lien.
(d) A description of the real property sufficient for identification.
(e) The name of the owner.
(f) The time when the first and the last item of labor or service or materials was furnished.
(g) The amount unpaid the lienor for such labor or services or materials and for unpaid finance charges due under the lienor’s contract.
(h) If the lien is claimed by a person not in privity with the owner, the date and method of service of the notice to owner. If the lien is claimed by a person not in privity with the contractor or subcontractor, the date and method of service of the copy of the notice on the contractor or subcontractor.
Section 713.08(2), Fla. Stat. provides that “[T]he a claim of lien may be prepared by the lienor or the lienor’s employee or attorney and shall be signed and sworn to or affirmed by the lienor or the lienor’s agent acquainted with the facts stated therein.”
Why is the preparation of the lien limited to the lienor or lienor’s employee or attorney?
Claims of lien are normally recorded after construction reaches substantial completion. Pursuant to Florida Statutes Section 713.08, a Claim of Lien shall state the following information:
- The project owner’s identification.
- Legal description of the improved property.
- Description of the labor, services or materials provided.
- Whether the work was provided through a direct contract with the owner or through a subcontract. If via a subcontract, the identity of the subcontractor.
- The total value of the work provided.
- The amount that remains unpaid
- The first date and the last date that labor, services and materials were provided.
Who is authorized to draft and sign a construction claim of lien? “The claim of lien may be prepared by the lienor or the lienor’s employee or attorney and shall be signed and sworn to or affirmed by the lienor or the lienor’s agent acquainted with the facts contained therein.” Fla. Stat. §713.08(2).
The Florida Supreme Court provided an advisory opinion regarding activities of Community Association Managers (CAMS) which are permitted and which constitute the unlicensed practice of law. The Florida Bar regarding Advisory Opinion-Activities of Community Association Managers, 177 So. 3d 941(Fla. 2015). The Florida Supreme Court advised that the drafting of a claim of lien and satisfaction of claim of lien by CAMS constitutes the unauthorized practice of law. Id. at 946. The Court’s rationale is that the “[D]rafting document, even if form documents, which require a legal description of the property or which determine or establish legal right are also the practice of law.” By application, a third-party of a lienor, other than an attorney, may not draft or execute a claim of lien. Additionally, the person who executes the claim of lien must be “acquainted with the facts” contained in the Claim of Lien. To be safe, it should be limited to employees who are directly involved in the billing and collection process.