For most private (non-governmental) projects over $2,500, a notice of commencement is required to be recorded in the official records prior to commencement of work. If a recorded notice of commencement is not expired or terminated at the time of recording of a construction lien, the construction lien establishes its priority as of the date and time of the recording of the notice of commencement in the official records. This principle is often referred to as “relation back.” If the notice of commencement has expired or been terminated, then a construction lien attaches and takes priority as of the date and time the construction lien is recorded in the official records.
Suppose Bob Buyer purchases a new home from Happy Homebuilder, Inc. Bob’s deed is recorded after the expiration of a recorded notice of commencement. After Bob’s deed is recorded, a lienor that improved the residence (and was not paid by Happy Homebuilder) recorded a construction lien. Bob’s deed has priority over the construction lien and the lienor is unable to enforce the construction lien against the real property. If Happy Homebuilder is insolvent, it is unlikely the lienor will be paid for labor, services or materials incorporated into the new home.
The scenario above demonstrates the importance for contractors, subcontractors and materialmen to determine whether a notice of commencement has been terminated or expired on any improvement to which they intend to perform work or supply materials. Although the result of a notice of commencement having expired or been terminated may seem harsh, it occurs quite often because many projects throughout the state of Florida require extended time for completion. This problem can be avoided by recording construction liens prior to the expiration of notices of commencement. Contractors, subcontractors and materialmen should obtain a copy of the notice of commencement and review the expiration date prior to beginning work or supplying materials to any improvement.
This information presents the general scheme of Florida’s Construction Lien Law as of November 2023. The Construction Lien Law is constantly being amended; therefore, this material should not be relied upon in place of experienced legal advice in specific situations. This material is copyrighted and cannot be reproduced without written permission from Barry Kalmanson, Esq.
