How to Release a Lien in Florida - A Simple Guide

What is a Lien Release?

In Florida, a lien release is a legal document that signifies the satisfaction and removal of a lien on a property or asset. A lien is a claim placed on a property by a creditor or a party with a legal interest in the property to secure a debt or obligation.

Implications of a Lien Release

Understanding the implications of a lien release requires careful examination of each release form you sign. The language and provisions within the release dictate its effects. In Florida, the standard statutory release form found in Chapter 713 of the Florida Statutes primarily releases lien rights up to the present date, with the effective date determined by the through date.

It's important to recognize that a lien release can also release other rights beyond lien claims. These may include rights related to change orders, delays, extended time, and general conditions. A thorough review of the construction documents is necessary to understand the rights you might be relinquishing by signing a lien release.

Why are Lien Releases Important?

Lien releases are crucial as they act as safeguards in legal proceedings. They serve as a protective measure against various potential claims. For example, if you file a construction lien and a lawsuit to foreclose on that lien, claiming payment owed until the end of the previous month, prior releases for partial payments can affect future claims if their through dates extend beyond the accepted amount. Therefore, careful assessment of releases is essential to avoid unintentionally waiving more rights than intended.

Components of a Lien Release in Florida

A typical lien release in Florida includes the following information:

1. Identification: The document should identify the parties involved, including the creditor or lienholder and the property owner.

2. Description: It should provide a clear description of the property or asset on which the lien was placed.

3. Lien Details: The release should specify the type of lien (e.g., mortgage, mechanic's, or judgment lien) along with any relevant recording information.

4. Debt Satisfaction: The document should state that the debt or obligation secured by the lien has been fully paid, satisfied, or otherwise resolved.

5. Signatures: Both the creditor or lienholder and the property owner (or their authorized representatives) must sign the document.

6. Notarization: In some cases, notarization is required to validate the signatures.

Once executed and recorded with the appropriate county or state office, the lien release becomes an official record, indicating that the lien has been removed and the property is no longer encumbered. This allows the property owner to have a clear title and engage in transactions involving the property.

How to Release a Lien?

1. Step 1 - Get Paid: Ensure that the debt or obligation secured by the lien has been fully satisfied and payment has been received. Evidence of payment, such as receipts or bank statements, is crucial.

2. Step 2 - Prepare the Lien Release Document: Draft a document that complies with Florida's legal requirements, including details such as the property description, lien recording information, and the amount of the debt.

3. Step 3 - Include Necessary Language: The document should clearly state that the lien is being released and discharged, and that the debt has been fully satisfied.

4. Step 4 - Obtain Signatures: Both the lienor and the property owner (or their authorized representative) must sign the lien release document.

5. Step 5 - Notarize the Lien Release: Florida law requires notarization. Arrange for a notary public to witness the signing and affix their seal.

6. Step 6 - File the Lien Release: Submit the lien release to the county recorder's office where the initial lien was recorded.

7. Step 7 - Serve the Lien Release: Provide copies of the filed release to all interested parties, including the property owner, general contractor, and any other relevant parties.

8. Step 8 - Retain Proof of Filing and Service: Keep copies of the filed lien release and proof of service for your records to protect against future disputes.

Different Perspectives on Releases

• For General Contractors: Obtain comprehensive and broad releases from subcontractors to protect against future claims related to delays, change orders, and lien rights. This reduces the risk of additional compensation claims.

• For Subcontractors: Secure broad releases from sub-subcontractors to ensure consistent protection and mitigate potential liability.

What is Satisfaction of Lien?

A Satisfaction of Lien is a legal document that confirms that a lien, which has previously been filed against a property, has been fully resolved and that the debt or obligation secured by the lien has been paid in full. This document serves as formal acknowledgment from the lienholder that the lien is no longer valid and should be removed from public records.

Key Aspects

• Purpose: To officially document that the lien has been satisfied and to clear the property’s title of any encumbrance related to that lien.

• Application: Filed with the county recorder’s office where the original lien was recorded, ensuring that the lien’s removal is officially recorded.

• Components: Typically includes the identification of the parties involved, a description of the property, the original lien details, a statement that the lien has been satisfied, and signatures from the lienholder.

By recording a Satisfaction of Lien, property owners can obtain a clear title, which is essential for selling, refinancing, or transferring the property.

Many people often confuse a lien release with a lien waiver due to their similar functions in the construction and property management sectors. Both documents pertain to the handling of liens, but they serve distinct purposes and are used at different stages of the payment and lien resolution process. To clarify these distinctions further, let’s now delve into the details of lien waivers to ensure a clear understanding of their role and implications.

What is a Lien Waiver?

A lien waiver is a legal document used in the construction industry to relinquish the right to file a mechanic's lien against a property. Mechanic's liens are claims contractors, subcontractors, or suppliers can place on a property if they are not paid for their work or materials. Lien waivers protect property owners and general contractors by ensuring that all parties are safeguarded from potential liens.

Types of Lien Waivers

1. Partial Lien Waiver Upon Progress Payment

• Purpose: Releases lien rights for the specific amount paid during construction.

• Application: Issued upon receiving partial payment for work or materials.

• Effect: Releases lien rights for the amount paid but retains rights for the remaining balance.

2. Partial Lien Waiver Upon Final Payment

• Purpose: Releases lien rights for the entire project upon final payment.

• Application: Issued upon project completion and final payment.

• Effect: Provides a comprehensive release of lien rights.

3. Unconditional Lien Waiver Upon Progress Payment

• Purpose: Effective even before the payment is received.

• Application: Used to streamline the payment process, offering assurance that lien rights are waived.

• Effect: Takes immediate effect upon execution.

4. Unconditional Lien Waiver Upon Final Payment

• Purpose: Effective upon final payment, regardless of clearance.

• Application: Expedites the final payment process, ensuring immediate release of lien rights.

• Effect: Releases lien rights without waiting for payment clearance.

Comparison of Lien Waivers vs Lien Releases vs Satisfaction of Lien

FAQs

Can I release a lien if the payment is partially made?
Yes, you can issue a partial lien release for the amount paid. However, the full lien must be released once the total amount is paid.  

What happens if I release a lien but still have unpaid invoices?
‍If a lien is released, it typically indicates that payment obligations are satisfied. If there are still unpaid invoices, you may need to file a new lien or take other legal action. 

How long does it take to process a lien release?
‍The processing time varies by jurisdiction. It’s advisable to follow up with the local recorder’s office to ensure the release is properly filed and recorded.  

Do I need a lawyer to release a lien?
‍While not always required, consulting a lawyer can help ensure that the lien release is properly drafted and complies with local laws.  4

Can a lien be released if the property owner and lienholder cannot agree on the payment amount?
If the property owner and lienholder cannot agree on the payment amount, the lien cannot be voluntarily released in full. In such cases, the dispute may lead to negotiation, mediation, or ultimately litigation. The lienholder would need to pursue enforcement of the lien through a lawsuit (foreclosure), or the property owner might dispute the validity of the lien in court. A partial release might be possible for an agreed-upon portion, but the remainder of the lien would remain in dispute.

What if I paid the general contractor, but a subcontractor still filed a lien?
This is a common and critical issue in Florida construction law. Even if you've paid your general contractor in full, a subcontractor or supplier who hasn't been paid by the general contractor can still file a lien on your property if they followed the proper notice procedures (like serving a "Notice to Owner").

To protect yourself:

• Notice of Commencement: File a Notice of Commencement before work begins on your property. This is crucial for proper payment procedures.

• Lien Waivers/Releases: Obtain lien waivers from the general contractor, subcontractors, and suppliers for each payment made. For progress payments, secure Partial Lien Waivers. For final payment, obtain Final Lien Waivers from all parties. The general contractor should provide a Contractor's Final Affidavit before final payment, listing all unpaid parties.

• Verify Payments: You can request information from your contractor about who they are paying.

• If a lien is filed, consult an attorney immediately. You might have to pay the subcontractor to clear the lien and then pursue legal action against the general contractor for the double payment.

Are there any common reasons a lien release might be rejected by the county recorder's office?
Yes, county recorder's offices have specific requirements for recording documents, and a lien release can be rejected for various reasons, including:

• Missing or Incorrect Information: Failure to include all required details such as the property description, original lien recording information (book and page number), or full names of parties.

• Improper Formatting: Issues with margin sizes, font size, paper size (often 8.5" x 11" or 8.5" x 14"), or legibility.

• Missing or Invalid Notarization: Florida law generally requires notarization, so an absent or improperly completed notary seal/signature will lead to rejection.

• Incorrect Fees: Not paying the correct recording fee.

• Unclear Signatures: Signatures that are illegible or don't match previously recorded documents (though this is less common for rejection and more for potential future disputes).

• Sending to the Wrong County: Filing the release in a different county than where the original lien was recorded.

How can I verify that a lien has been successfully released and removed from public records?  
To verify a lien release:

1. Contact the County Recorder's Office: After filing, you can call or visit the Clerk of the Circuit Court (who acts as the county recorder) in the county where the lien was originally recorded.

2. Online Search: Most Florida county clerks offer online public record search portals. You can typically search by property owner name, instrument number, or property address. Look for the recorded "Lien Release" or "Satisfaction of Lien" document associated with the original lien.

3. Request a Certified Copy: For official proof, you can request a certified copy of the recorded lien release from the clerk's office.

4. Title Company: If you are involved in a real estate transaction, your title company will perform a title search and can confirm the lien's removal.

Can a lien be released if the debt is settled for less than the full amount?
Yes, a Mechanics lien can be released if the debt is settled for less than the full amount. This is often referred to as a "partial satisfaction" or "settlement agreement." In this scenario, the lienholder would execute a lien release explicitly stating that the lien is satisfied and released for the agreed-upon, lesser amount. It's crucial to have a clear written agreement detailing the settlement and ensuring the lien release reflects this agreement.

What if the property is being sold with an active lien?
Selling a property with an active lien is generally possible, but the lien usually needs to be addressed before or at closing.

• Payment at Closing: The most common scenario is that the lien amount is paid directly from the sale proceeds at the closing. The lienholder provides a satisfaction or release of lien at closing, which is then recorded, clearing the title for the new owner.

• Negotiation: The seller may negotiate with the lienholder to reduce the amount owed to facilitate the sale.

• Escrow: In some cases, funds equal to the lien amount might be held in escrow until the lien is formally released.

• A title company involved in the sale will typically identify all active liens and require their resolution as a condition of providing clear title insurance.

Can an expired lien still cause problems, and do I need to release it?
Yes, even an expired lien can cause problems. While a construction lien in Florida generally expires one year after it is recorded if no lawsuit to enforce it is filed, it doesn't automatically disappear from the public records.

• Cloud on Title: An expired but unreleased lien still appears on title searches and can create a "cloud on title," making it difficult to sell, refinance, or transfer the property.

• Proof of Expiration: Even though it's technically expired, you might still need to provide legal proof of its expiration (e.g., a statement or affidavit) to satisfy potential buyers, lenders, or title companies.

• Best Practice: The best practice is always to obtain and record a formal lien release or satisfaction of lien once the underlying debt is resolved, regardless of whether the statutory enforcement period has passed. This provides clear, undeniable proof that the lien is no longer valid.

When should I consider hiring an attorney for a lien release?
While simple lien releases might be straightforward, you should consider hiring an attorney in the following situations:

• Disputes: If there's any disagreement over the amount owed, the quality of work, or the validity of the lien.

• Complex Projects: Large commercial projects or residential projects with multiple parties and complex payment structures.

• Uncooperative Lienholder: If the lienholder refuses to provide a release after payment, or is difficult to locate.

• Unusual Lien Types: For liens other than standard construction liens (e.g., judgment liens, IRS liens).

• Selling/Refinancing with an Active Lien: To ensure a smooth closing and clear title.

• Concerns about Waivers: To understand the full implications of any lien waiver or release you are asked to sign.

• Threat of Foreclosure: If the lienholder has initiated or threatened a lawsuit to foreclose on the lien.

Are there services that can help me prepare and file a lien release?
Yes, there are several types of services that can help:

• Legal Firms: Law firms specializing in construction law or real estate can prepare and file lien releases, offering legal advice and handling any complexities.

• Lien Service Companies: Companies like Sunray Construction Solutions (as mentioned in your original text) specialize in lien-related documentation, including preparing and filing lien releases, notices to owner, and claims of lien. They are often cost-effective for straightforward situations.

• Title Companies: While primarily involved in real estate transactions, title companies often assist in obtaining and recording lien releases as part of their closing services.

What are the potential consequences of an improperly filed or unfiled lien release for the lienholder?
For the lienholder, consequences can include:

• Liability to Property Owner: If a lienholder fails to timely release a lien after receiving full payment, they can be liable to the property owner for damages, including attorney's fees and costs incurred by the owner to get the lien removed. Florida Statute 713.21 generally requires a lien to be released within 20 days of a written demand for its satisfaction.

• Damage to Reputation: Repeated failures to release liens can harm the lienholder's business reputation.

• Inability to Secure Future Work: Property owners or general contractors may be hesitant to work with a lienholder who has a history of not properly releasing liens.

What are the potential consequences for a property owner if a lien is not released after payment?
For the property owner, consequences can be severe:

• Cloud on Title: The unreleased lien remains on the property's public record, creating a "cloud on title." This means the ownership of the property is not clear and undisputed.

• Inability to Sell or Refinance: Lenders and buyers typically require a clear title. An unreleased lien will prevent or significantly delay the sale or refinancing of the property.

• Legal Action: The property owner may have to take legal action (e.g., a lawsuit to quiet title or to compel the lienholder to release the lien) to get the lien removed, incurring attorney's fees and court costs.

• Foreclosure Threat: While unlikely if payment was made, an unreleased lien theoretically keeps the threat of foreclosure active until it is formally removed.

Is there a deadline for the lienholder to release a lien after being paid?
Yes, under Florida Statute 713.21(3), a lienholder who has received full payment must execute and deliver a satisfaction or release of lien to the owner (or the owner's agent) within 10 days after the date the lienholder receives payment. If the owner sends a written demand for a satisfaction of lien, the lienholder must execute and record the satisfaction within 20 days of receiving the demand. Failure to do so can make the lienholder liable for damages sustained by the owner as a result of such refusal.

How does a "Notice of Contest of Lien" affect the lien release timeline?
A "Notice of Contest of Lien" (Florida Statute 713.22) is a document that a property owner can record in the public records after a lien has been filed. Its purpose is to shorten the time period within which the lienholder must file a lawsuit to enforce their lien.

• Normal Timeline: Without a Notice of Contest, a construction lien is valid for one year from the date it was recorded. The lienholder must file a lawsuit to foreclose on the lien within this one-year period.

• Contested Timeline: If a Notice of Contest of Lien is recorded, the lienholder's deadline to file a lawsuit to enforce the lien is shortened from one year to 60 days from the date the Notice of Contest is recorded. If the lienholder fails to file suit within this 60-day window, the lien becomes void and is extinguished. This effectively pressures the lienholder to either pursue their claim quickly or release the lien.

Sunray Construction Solutions offers professional "Notice to Owner Florida" services to help you secure your lien rights in the construction industry. Looking for a free Notice to Owner form in Florida? Get your free, editable "Florida Notice to Owner Template" today for easy and accurate preparation.

At Sunray Construction Solutions, we also understand the importance of protecting your rights on a construction project. Learn how to use the Florida mechanics lien form and how to file a mechanics lien in Florida to ensure you're paid for your hard work.

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