As a business owner, there are few things as important to you as ensuring that you are paid for the services that you provide. Whether you are a general contractor doing small home improvements or a builder hired to completely renovate a structure, you need to be able to get paid for the work you have done, even when your customer is refusing to do so. This is where a mechanics lien can be used.
What is a mechanics lien?
A mechanics lien is a security interest that a business owner can have applied to the property of the customer for which they did work. This security interest means that they will be entitled to payment upon the sale of the property, which can be forced through a lien foreclosure lawsuit by the business owner within one year of the lien being applied.
How do you get a mechanics lien?
A mechanics lien is filed with the local county recorder’s office where the property or work performed is located. The rules for filing and recording a mechanics lien can vary based on the county you are filing in. Once you file the lien, a copy of it must be sent to the property owner no later than 15 days afterward.
The exact contents of what a mechanics lien must contain can be complex and will require detailed information about the job that you did.
Who can apply a mechanics lien?
In Florida, building contractors as well as their subcontractors, suppliers and other related entities involved in the project. Those providing services without directly working on the property such as architects and engineers are also eligible to file for a mechanics lien if they are not compensated for their services. Only licensed professionals can obtain a mechanics lien, unlicensed contractors cannot file for a lien.
Not all entities are eligible to obtain a mechanics lien. Only those directly providing services or the entities just below them are eligible to obtain a lien. For example, if a lumber supplier sends wood to a fencing supplier that delivers prefabricated fencing to a contractor for a homeowner, the lumber supplier may not obtain a lien for failure to pay, however the fencing supplier and contractor both could.
How long do you have to file a mechanics lien?
There are specific deadlines that apply for when to file a mechanics lien, depending on what type of business you own and the services that you provide. For most general contractors, they will have 90 days in order to file a mechanic lien on the property they performed work on. This deadline starts on the last day that work or services were supplied for the project.
How long do I have to enforce a mechanics lien?
Once a mechanics lien has been filed, you have one year to initiate an enforcement action against the property. Once this year has lapsed, then the mechanics lien will be lifted. You cannot seek to extend a mechanics lien, so any enforcement action must be done within that time or the lien is extinguished.
To enforce a deadline, you file an enforcement lawsuit with a local court. The property owner may dispute the enforcement action, and this can lead to a contested legal dispute requiring you to show cause for why the enforcement action should proceed.