Collection matters can be difficult and frustrating. This is true even for businesses that are very familiar with the collections process and have their own collection departments, like hospitals. Even though numerous statements of account or payment reminders you have been sent, sometimes the other party will not pay what they owe. As a business owner you need to focus on growing your business, and chasing those customers who won’t pay can be extremely time consuming and cause you to miss other opportunities for growth. A commercial attorney can often be more effective than your own staff or a collection agency and in certain cases a contingent fee agreement may be made where if there is no collection you would not owe any attorney fees. Florida law provides specific causes of action for “open accounts”, “accounts stated”, “goods sold and delivered”, “services rendered”, “breach of contract”, “guaranty” and others that may be applicable to a collection matter.
Sometimes in a collection matter it may be necessary to resort to a lien in order to recover a debt or to obtain a security interest in real estate or an item of personal property in order to secure the payment of a debt. Liens against assets must be paid off when the asset is to be sold.
Until 1991, construction liens in Florida were known as “mechanics liens,” but, because the general public understood the term mechanics liens to mean liens which related to the fixing of an automobile or piece of equipment, the legislature renamed liens related to improvements, labor, services, and materials related to real property as “construction liens.” Construction liens are created by statute and the first mechanics’ lien statute was enacted in 1887. Given the amount of real estate development occurring in Florida, construction liens are an important tool when a contractor, subcontractor or material supplier has an issue with collections.
Requirements for Construction Liens
A construction lien must be based on an agreement (can be implied or oral) between the lienor and some other party. Construction liens are only available for privately owned property. They may not be applied to real estate owned by the state. The most important requirement for a lien is strict compliance with Florida’s lien statute.
Florida law requires that a “Notice to Owner” be given to inform a property owner that potential lienors who do not have a contract with the property owner may make a claim against the owner to secure their unpaid debt. This notice is to protect the owner, who may then impound money which may have been paid to a contractor. The Notice to Owner is mandatory for any lienor who does not deal with the property owner in order to have a construction lien.
The Notice to Onwer must be served within forty five (45) days from when the lienor commences furnishing the materials and services at the site. The failure to timely serve the Notice to Owner is a complete bar to a lien where the lienor is not a laborer and does not have a contract with the property owner.
Preparing and Recording Claim of Construction Lien
In Florida the claim of lien paper must be recorded in the public records in order to give notice to all potential purchasers of real estate that there is a lien. The claim is filed through the Clerk of Court. In Florida, the claim of lien may only be prepared by the lienor himself or the lienor’s attorney or employee. The Florida Supreme Court ruled that the preparation of a claim of lien is the practice of law and is not to be performed by a non-lawyer.
The claim of lien must be recorded within the termination of the prime contract or 90 days from the final furnishing of labor, services, or materials by the lienor at the site, which ever is earlier.
Serving the Claim of Construction Lien on the Owner
In addition to recording the claim of lien with the Clerks office, the claim of lien must be served on the owner. Failure to serve the claim of lien on the owner within fifteen (15) days after recording it makes the claim of lien voidable, when there is prejudice.
While construction liens are the more frequently used liens for collections related to improvements to real property, Florida Law provides for other types of liens for specific types of debts including:
- Liens for Labor on and with Machines
- Liens for Labor or Services on Personal Property
- Liens for Labor in Raising Crops
- Molder’s Liens
- Liens for Labor on or for Vessels
- Liens for Furnishing Materials for Cessels
- Liens for Care and Maintenance of Animals
- Liens for Furnishing Pest Control
- Landlord’s Lien for Rent
- Liens for Recovering, Towing, or Storing Vehicles or Vessels
- And others…
Todd C. Passman, P.A. handles collection matters in Fort Pierce, Port St. Lucie, Vero Beach, Stuart, and Okeechobee, Florida, and surrounding areas. If you have a counterparty who wrongfully refuses to pay, we may be able to help you.
Tell us about your problem. We can help.
Failure to be paid for goods or services rendered is extremely frustrating. We give our cases the undivided attention they deserve so that you can get back to business. If you need a lawyer on a collection matter, please contact Todd C. Passman today, at (772) 465-9806 or or fill out the contact form on this page. Someone from our office will contact you right away.