Understanding the Notice Requirements Under Florida’s Lien Law

An Introduction to Lien Law and Filing the Notice Commencement

If you work in the construction industry or own a property that requires work done to it, it is important to have a thorough understanding of Florida’s lien law and the Notice to Owner requirements.

What is the Purpose of Florida’s Lien Law?

The lien law can be utilized by a supplier, contractor or subcontractor to ensure that they are fully compensated for work that they complete or for their materials. It also protects the owner of a construction project from having to pay twice for work done or materials associated with the project.

What are Lien Rights?

These are the rights established by law in Florida that allow a lien to be filed in the event of non-payment. It’s important to understand the implications of this to make sure builders are compensated for their work, and owners do not become a subject of a lien or end up paying twice for the work.

Lien rights are particularly important because of the way that they govern the builder's relationship with the owner of the property as there can be a significant impact on lien rights if there is a crossover between a subcontractor and a contractor’s scope of work.

Common Contract Situations and Implications for Serving a Notice to the Owner

There are two main contract situations that commonly arise: when the contract is with the owner of the property, and when the contract is with someone else other than the owner.

Contract with the Owner

If the contract is for an amount greater than $2500 between the owner and the contractor, there needs to be a disclosure (found here), and the disclosure needs to be on the first page of the contract or on a separate page but signed by the owner.

If this statutory disclosure is not included, the rights of other lienors who do not have a contract with the owner are not affected, and the contractor may only be barred if the owner was adversely impacted by the failure to include the disclosure.

Contract with Someone Other Than the Owner

In most cases, Subcontractor and Supplier lien rights cannot be perfected without first serving a Notice to Owner (which can be viewed here).

The purpose of the Notice to the Owner informs the Owner of the property that someone is supplying material for their project. Typically, the Owner will work exclusively with the Contractor which means that the Owner may not know which Subcontractors or Suppliers have been responsible for providing services or materials.

The Notice to Owner, therefore, serves two important functions, firstly identifying the parties who have been working on the project and secondly, informing the Owner that Subcontractors and/or Suppliers have a right to lien the property in the case of non-payment.

The timing for serving the Notice to Owner is vital, as the technical lien laws laid out in Florida Statute 713.06 show. It must be served either before providing labor, services or materials; within 45 days of furnishing labor, services or materials; or before the Owner makes final payment for the project (after receiving the Final Payment Affidavit from the Contractor).

If you need to deliver a Notice to Owner, best practice is to deliver it before work on the project starts. If it’s not served then, then the Subcontractor will need to keep a careful eye on the timeline in order to perfect the lien. If this is not adhered to, it may result in losing lien rights.

A Notice to Owner does not automatically perfect a Subcontractors lien rights, but missing the deadline for serving the notice can be fatal to those rights. Keeping track of deadlines and a log of when Notices were sent will help protect lien rights. Contractors Reporting Services in Tampa, FL can help with managing the paperwork aspects of general contracting licenses and services.

The next blog post was originally seen on Understanding the Notice Requirements Under Florida’s Lien Law and is republished from Contractors Reporting Services. Find more on:} Contractors Reporting Services website

Worker’s Compensation in Tampa, Florida: We Answer Your Top Questions

All businesses that are involved in construction in Florida, including Tampa, are subject to a specific set of rules and regulations that govern the way that they do business.

We’ve compiled a list of the most important questions that will help prevent experience mod workers’ compensation overcharges.

Is my business classified as a construction business?

The best way to check this is to access the Florida Division of Workers’ Compensation which has published the official list of which business class codes are considered to be part of the construction industry. Here is a link to the list: https://www.flrules.org/gateway/notice_Files.asp?ID=10040390

For businesses in the construction industry, what are the requirements for workers’ compensation compliance?

Florida legislation for construction businesses requires either an active workers’ compensation policy or alternatively, a valid exemption for workers’ compensation. Even if you already have an exemption for yourself as the owner of the company, you will still need a valid workers’ comp policy that covers each individual that you employ.

The legislation stipulates that every employee that works on a construction site in Florida is required to be covered by a workers’ compensation policy (or hold a valid exemption). This ruling applies to both long-term employees and short-term hires that are brought on to the job site to help out.

How does an exemption work and can I apply for one?

You can apply for a worker’s comp exemption if you are a business owner, it allows you to be excluded from having to buy workers’ comp insurance for yourself. Note that this means that if you are hurt on the job, you will not be eligible to receive worker’s comp benefits.

In all cases, exemptions are only valid for the person and the company that have been listed on the exemption. For businesses in the construction industry in Florida, to be eligible for an exemption, the individual needs to be a part owner of a corporation or limited liability company and needs to have at least a 10% ownership share. Employees that do not have an ownership share are not eligible to apply for an exemption.

How does the application process work?

The applications for workers’ compensation exemptions are filed on the MyFloridaCFO website on the division of workers’ compensation page. Navigate here, and click on the option that says “Apply for an Exemption.” As per the website, construction industry exemptions attract a fee of $50 and must be renewed every two years to stay valid.

Do different rules apply for businesses and workers from different states working on projects in Florida?

Construction businesses that are registered outside of Florida, but that are completing work within the state are required to either obtain a workers’ comp policy that is valid in Florida or apply for a Florida endorsement for their out of state policy that will cover their operations in Florida. It is a legal requirement that out-of-state companies pay workers’ comp rates if they wish to work in Florida.

What process do I follow if I’m hiring a subcontractor?

Legislation in Florida stipulates that you are responsible for ensuring that all subcontractors and their employees either have their own workers’ compensation policy or that they hold a valid exemption that covers all workers on site. If you find that a subcontractor does not comply with the legal requirements, they will need to correct the issues before they can be allowed back on the job site. Failure to do so will result in your insurance company charging a premium to cover those workers; you are also at risk of having your insurance canceled as well as potentially attracting fines from the State Division of Workers’ Compensation.

Contractors Reporting Services in Tampa Fl has been helping builders with their paperwork since 1965, if you need assistance with workers’ comp policies or exemptions for your business, please get in touch.

The following information was first published to Worker’s Compensation in Tampa, Florida: We Answer Your Top Questions and is republished from Contractors Reporting Services. Find more on:} http://activatemylicense.com