Florida
Construction Lending State Compliance Library
State statute reference
Last updated October 28, 2022
Disclaimer: Information on this website is provided for informational purposes only and is not intended to be legal advice or establish an attorney-client relationship. Construction law can change at any time, so the information on this website may not be the most up-to-date information available. The information on this website is posted “as is” and no representations are made that the content is without errors. Use of this website does not create an attorney-client relationship between Land Gorilla, content creators, law firms, and any other contributors to this website. Users of this website should contact their own legal counsel for advice with respect to any legal matters.
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Florida Lien Law Overview
Florida Construction Lien Law
Lien Law Overview
Generally, mechanics lien statutes generally apply to both residential and non-residential construction. Title and investor guidelines will control requirements for both loan types. Some states have general requirements that may impact non-residential and/or residential properties.
Lien Waivers
Lien Waiver Summary
Statutory lien waiver forms are required. Do not use forms other than what is required by the state.
Statutory Form
Required
Notary
Not Required
Electronic Signature
Acceptable
Are title companies required by law to manage construction loan disbursements?
No
Can a mechanics lien have priority over a pre-existing mortgage in Florida?
In Florida, mechanics liens take precedence over any encumbrances that were not recorded prior to the mechanics lien attaching to the property. However, if an encumbrance was properly recorded before the mechanics lien attached to the property, it takes priority over the subsequent mechanics lien. Lenders must ensure that the security instrument is recorded before the Notice of Commencement.
Mechanics liens have a hierarchy under Florida law, which is divided into three classes: laborers, all other claimants except the general contractor, and the general contractor. If there isn’t enough funds to pay all the liens on the property, the liens are paid by class, either in full or pro rata, before any liens in a subsequent class are paid.
Notices
Notice of Commencement (or similar like event)
Yes. Depending on who disbursements will be made to determine which party must record the notice of commencement.
Construction Lenders must file the Notice of Commencement if they have made a construction loan on the property, otherwise the owner is required by statue to record the notice of commencement.
Must be filed by the owner (or owner’s agent) before any work begins. Must be recorded by lender before disbursing any funds to the contractor. Lenders are liable to the owner for failure to record a Notice of Commencement (“Notice”). Thus, the best practice may be for a lender to act as owner’s agent in properly completing and recording the Notice. Filing a Notice establishes the priority and attachment of a mechanic’s lien for the construction of the improvements. If not filed, the lien will attach as of the date the claim of lien is filed and will have the same priority as all other lienholders- e.g., professionals’ liens like architect and landscaper liens- (as opposed to being first in line if the notice had been filed). Construction must begin within 90 days after the Notice is filed or it is void. See Fla. Stat. §713.13.
Who Files?: Lender must record unless their is no construction financing.
When must it be filed?: Before the start of the project starts but after the construction loan is closed. Also no later than 90 days from when construction begins.
Appoint a designee?: Yes, but the form must be signed and notarized by the owner/borrower.
Posted on Jobsite?: Yes, by owner or owners agent.
Preliminary Lien Notifications:
Preliminary notices (called “Notices to Owner” in Florida) are very closely integrated into the fabric of the state’s mechanics lien laws. Most participants will need to send a notice, and if a notice is required pursuant to the statutes, the requirement is very firm.
Notice of Completion
Yes, a Notice of Termination must be filed upon completion. This notice will terminate the Notice of Commencement. Additionally per section 713.06 when a contract is terminated before completion the contractor shall comply with subsection 713.06(d)1 and provide the state form of Contractor’s Final Payment Affidavit:
“The contractor shall give to the owner a final payment affidavit stating, if that be the fact, that all lienors under his or her direct contract who have timely served a notice to owner on the owner and the contractor have been paid in full or, if the fact be otherwise, showing the name of each such lienor who has not been paid in full and the amount due or to become due each for labor, services, or materials furnished. The affidavit must be in substantially the following form: See state form”
Title
Florida uses ALTA title commitments that allow for the Construction Loan Update Endorsement, which is used when the lender requests endorsements as additional disbursements are made. It gives coverage up to the new outstanding mortgage balance and shows whether any other instruments have been filed and recorded since the last title update. The endorsement also insures the priority of the insured mortgage over instruments that are not specifically listed in the endorsement. Since the title company has a stake in the disbursements, you may find that they exercise some due diligence relating to construction draws.
Contractor Licensing
Contractor Requirement: Two types: 1. Licenses with specific city/county need an initial state registration, 2. Certified can practice statewide.
Subcontractor Requirement: Subs must be licensed as specialty contractors, some minor work does not need to be licensed.
Contractor Warranties: There is case law in Florida providing builder warranties whether they are included in the purchase contract or not. However, for clarity, it is recommended to request terms from the builder or attorney as part of the purchase contract.
Florida Construction Lending Documents Kit
Download the Florida documents kit by filling out the form. The documents included are listed below.
Disclaimer: These forms are provided for informational purposes only and are not intended to be legal advice or establish an attorney-client relationship. They are posted ‘as is’ and we do not warrant that they are the most current version. Users of these forms should consult their legal counsel before using for their particular transaction.
- Conditional waiver and release of lien upon progress payment
- Unconditional waiver and release of lien upon progress payment
- Conditional waiver and release of lien upon final payment
- Unconditional waiver and release of lien upon final payment
- Contractor’s final payment affidavit
Have Questions?
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