Oh $h!#, I Blew My Lien Deadline. Now What? - Florida webinar

In this blog, presented by SunRay Construction Solutions and Alex Barthet, Principal, The Barthet Firm, construction professionals in Florida can learn what are the different options or alternatives available that they can use to get paid successfully even if they have missed out on the lien/bond deadlines.

What are the Basic Notice to Owner/Lien Rules?

Rule 1: Send the "Notice to Owner" timely so it arrives by the 45th day after your first work or delivery of materials.  

Rule 2: Serve your Claim of Lien or Notice of Nonpayment within 90 days of your last work or delivery of materials. Remember, 90 days is not exactly three months.  

Rule 3: File your lawsuit to enforce your lien within one year of the recording date of your lien claim. For payment bond claims, file within one year from your last day of work.

Let’s begin by looking at some of the basic Notice to Owner/Lien rules construction professionals should know.

• Rule number one is to ensure you send out the Notice to Owner timely so that the Owner receives it by the 45th day of your first work or delivery of materials to the site. The 45^th day is the day when the owner and contractor should receive the notice. So, if you send it out on the 43^rd day and it takes four days to get delivered, then you will miss the deadline.

• Rule number two, your Claim of Lien (if you have lien rights) or the Notice of Nonpayment (if you have a claim against a payment bond) should be served within 90 days of your last work or delivery of materials to the site. A key point to remember here is 90 days is not equal to three months because some months have more than 30 days and some less than 30 days.  

• If your last day of work or delivery of materials is today, then your day of that 90-days period will begin tomorrow. The 90-days will also include all the weekends and legal holidays.  

• If the 90^th day happens to fall on a weekend or a legal holiday, it rolls on to the next business day.  

• Rule number three is that you must file your lawsuit to enforce your lien within one year of the recording date of your lien claim. If you have a claim on a payment bond, then you will need to file a lawsuit in court no later than one year from your last day of work. If a lien is contested, your deadline to file a lawsuit to foreclose is reduced to 60 days.  

• A lien claim and a bond claim have different dates from when the one year gets triggered. So, you need to make sure that you are following the right deadline. Also, if you do not file your lawsuit within one year of the recording date of the claim of lien or from your date of last work on a bond claim, you will forever be barred from bringing that claim.

Although there are several exceptions to these rules, it is recommended that construction professionals are aware of these basic rules so that you have a clear understanding of your rights.

Did you Really Miss the Deadline?

Now, when dealing with missed deadlines, the first question you need to ask is if you have missed it or not. Below are some of the common exceptions where you don’t need to send notices.

• If you have a direct contract with the owner, then you are not required to send out the Notice to the Owner. For example, you are plumber hired directly by the owner to work on their property, then as per the lien law, you are deemed as a contractor, i.e., someone who has a direct contract with the owner, so you do not have to serve the Notice to Owner, and you will still have your lien rights.

• If you have a direct contract with a bonded contractor, then you are not required to send out the Notice to Owner. For example, if you are working on a private project and the general contractor has posted a performance and payment bond for that project, and you have direct contract with that bonded contractor, then you don’t have to serve the Notice to Owner (technically, it is called the Notice to Contractor).

• If you are working on a public project and have a direct contract with the bonded contractor, you don’t have to serve the Notice of Nonpayment. For example, if you are working on a public project, then you don't need to serve a Notice to Owner or a Notice to Contractor, which is the first notice that would normally go out within 45 days, and you also don’t need to serve the Notice of Nonpayment.

• The one thing that you must do is file a lawsuit no later than one year from your last work.

• Another exception is that, on a bonded project, the 45-days for the Notice to Owner/Notice to Contractor does not start to run until you have actual or constructive knowledge about the bond. What this means is as an exception in the lien statute, the contractor is obligated to record a copy of the bond, so that everybody dealing with the project is aware that it is a bonded project. If the contractor doesn't record a copy of the bond, that is, you had no reason to know that that bond existed, you don't have to send that first notice.

• For example, there is a sub-subcontractor, i.e., a mason on a public project. So, there's the owner, the public owner, the bonded contractor, the subcontractor, shell contractor, and the sub-subcontractor. Typically, if it is a bonded project, then the contractor is required to record a copy of the bond, but in this case, they failed to do so.

• The sub-subcontractor approached their lawyer about a year after they started the work and about 30 days after they finished the work. The mason has a direct contract with the subcontractor who filed for bankruptcy in the federal court. So, there could be no claim made against the subcontractor.

• However, after some research the lawyer found out that the contractor did not record that bond when he was supposed to. Then they found a copy of the bond, serve the Notice to Owner/Notice to Contractor even though it was way past the basic rule of 45-days.  

• The next day, they served the 90-day Notice of Non-Payment and posted that they filed for a lawsuit. Finally, the mason prevailed, and the contractor had to pay the mason the principal interest and legal fees.  

So, although you may have missed out on sending the notices as per the deadlines, there are exceptions to the basic rules that you can take advantage of to ensure that your lien/bond rights are preserved.  

Is There Another Bond to Go After?

When dealing with these deadlines, remember to never automatically give up just because you may have missed a deadline. There are other ways to recover the money owed to you. One of them is to see if there is any other bond that you can go after.

• So, if you have been hired by a subcontractor, one question that you need to ask is, ‘does the subcontractor have a payment bond?’.  

• If you are a sub-subcontractor or material supplier to the subcontractor or sub-subcontractor, then you need to find out if there is any bond issued by the subcontractor and whether you have any rights against the subcontractor’s bond.  

• Sometimes, there may be projects where you have lien rights but there is no bond by the general contractor. However, the general contractor may determine either on their own or in conjunction with the owner that they want the subcontractor to give them a bond. So, even though the general contractor does not have a bond, it is possible that the subcontractor has one.

In such cases, if you can get your hands on the subcontractor’s bond, then you can determine if you have any rights against it. So, how can you get your hands on it?

• First, the subcontractor’s bond is not recorded, meaning it does not exist in the public records.

• Secondly, you can ask the subcontractor for it, but they may or may not provide it to you because they will not like it if you make claims against it. Legally, if you send them a certified letter demanding a copy of the bond, they are supposed to provide it, but they can still refuse.

• Your best bet is to ask the general contractor about the subcontractor’s bond, and they would gladly provide it. This is because by providing the copy of subcontractor’s bond to you, they can minimize the risk of you making a claim against them or the property because you will be making a claim against the subcontractor’s bond.

What to Do After You Get a Copy of Subcontractor’s Bond?

Now, once you get a copy of the subcontractor’s bond, here is what to do next:

• You do not have to follow any of the rules that we discussed above because they are all related to general contractor’s bonds.

• What you need to do is go through the subcontractor’s bond thoroughly to find out what it says about how to make a claim and then follow those rules diligently.  

• So, the only way you know how to make a claim on a subcontractor bond is to physically have it in your possession and do whatever it says.  

• Most of these subcontractor bonds will typically state that if you want to make a claim on the bond, then you need to provide some specific information. They will provide you with a list of information required, and you just must mail them via certified mail, with a cover letter and your claim is made.

• If they fail to pay you after you make that claim, then you can go ahead and sue them to get paid.

Keeping up with these rules and deadlines can be difficult. If you are looking for a tool that can help you stay on top of all these rules and deadlines, then do check out SunRay’s Deadline Calculator. It is a free desk tool that breaks down each of the rules depending on what role you have on the job. So, once you determine what type of project you are working on, you can refer to the appropriate section to find out what to file and when to file it.

How to Sue for Breach of Contract?

So far, we have discussed the basic lien rules and some great exceptions to those rules. Let’s look at what else you can do to recover your money. One of them is to sue for breach of contract with anyone that you have an agreement with.

• Although it is always preferred to have a written agreement, it is not a requirement if you want to sue someone for breach of contract. Even if you have some text messages or emails, then that is accepted as an agreement between the parties.

• Even if you submitted a proposal, quote, or estimate but it never got signed and you still went ahead and did all the work, then it is considered as an agreement of sorts. The key factor would be the terms of that agreement.

• So, whether you have a written contract or an oral one, you do have legal rights and you can sue for breach of contract.

• However, one area that you need to focus on is if you sign a written contract which has a pa-when-paid provision. This means that the person you have contracted with has a provision in the contract that they don’t have to pay you until they have been paid. This provision is valid and enforceable in Florida.

• If that is the case, then unfortunately, you may not have a claim for breach of contract if the reason that they are not paying you is that they haven't been paid.

Pro Tip: If you are working on a public project and you think that the public owner has paid the contractor, but the contractor says that they haven’t been paid yet so they cannot pay you, then you can submit a Freedom of Information Act request to the municipality that is managing the job.  

In this Freedom of Information Act request, you can ask them to send a copy of the last pay request they received, a copy of their contract, all the payments they made, and they, as a public agency, are obligated to give you that information. When they provide all the information, you can find out whether the contractor has been paid or not.

How to Sue for Unjust Enrichment?

Another legal option is to make a claim for unjust enrichment.  

• So, if you have not been paid (this the unjust part) and you have conferred a benefit of labor/materials to the other party (this is enrichment), then you have legal rights to be paid by suing for unjust enrichment.  

• Typically, this is used against a party that is further up in the chain, such as the owner. For example, there is a subcontractor who may or may not have lien rights. They can still sue the owner for unjust enrichment because they have performed the required work but haven’t been paid for it.

• Unfortunately, if the owner has paid the contractor, but the contractor has not paid you, or if the contractor has paid the subcontractor, but the subcontractor didn't pay you because you're a sub-subcontractor or a supplier, then your claim for unjust enrichment will not stand because there is nothing unjust about the situation if the owner has properly paid the contractor.

• Even though the money has not reached you, the owner is not the reason why it has happened. So, if the owner has paid the contractor, your claim against the owner for unjust enrichment will not survive.  

Key Takeaway

To summarize, as construction professionals, you need to first and foremost be aware of the basic Notice to Owner/Lien rules. You also need to ensure that you are aware of certain exceptions that can work in your favor in case you miss out on any of the required deadlines. Finally, you need to have some basic understanding of what the alternate ways are to recover your money even if you have missed the deadlines. If you find yourself facing payment issues in Florida, don't hesitate to reach out for guidance and support. SunRay can provide valuable assistance and expertise to help you navigate the complexities of construction payment disputes. Call 800-403-7660 today and get paid what you deserve.

Common Questions Contractors Ask

Can you file a lien after 90 days in Florida?

The claim of lien must be filed in the county where the property is located within 90 days of the lienor's last work or within 90 days of the termination of the contractor they are working for, whichever comes first.

What is the deadline to file a lien in Florida?

After filing the "Notice to Owner," you must file the official lien within 90 days of finishing your work or within 90 days of the contract ending between the general contractor and the owner, whichever comes first.  

What is the lien period in Florida?

A lien is valid for one year, unless a lienor files a lawsuit to enforce the lien prior to the expiration of the year.