Substantial Compliance with Florida Lien Law

Substantial Compliance with Florida Lien Law & Unfortunate Irony

I know the saying is “Don’t mess with Texas.” But, would-be mechanic’s lien claimants shouldn’t mess with Florida! Florida statute is concise and there is little room for error. For example, the Notice to Owner must be received within 45 days from first furnishing — not mailed within 45 days, received.

Fortunately, however, one subcontractor prevailed based on the court’s decision that the subcontractor substantially complied with statute.

The Case of the Notice of Commencement Mix-Up

According to the court decision, the project owner hired two General Contractors for improvements to the same property. One GC (GC-1) was renovating lodges & the other GC (GC-2) was renovating the clubhouse.

As you know, Florida requires Notices of Commencement for construction projects. In this case, the project owner filed two Notices of Commencement – one for the lodges & one for the clubhouse.

The subcontractor went to the job site to obtain the Notice of Commencement from the owner. Then, once it had the Notice of Commencement, the subcontractor served a timely Notice to Owner upon all parties identified within the Notice of Commencement.

It was later discovered, by GC-2 (the subcontractor’s customer), the owner had provided the subcontractor with the wrong Notice of Commencement. The subcontractor was notified of the error and said it would amend its Notice to Owner to include the correct GC. But, the subcontractor failed to serve an amended Notice to Owner.

Owner Argued the Notice to Owner was Invalid

The subcontractor filed a mechanic’s lien for an unpaid balance of $32,535.87 and subsequently sought to enforce its lien. The owner argued the subcontractor’s lien was invalid, because the subcontractor did not serve the Notice to Owner on the correct parties.

Fortunately for the subcontractor, the court determined the subcontractor substantially complied with statute.

In When Substantial Compliance ‘Trumps’ Strict Construction of Florida Lien Laws, author Amandeep Kahlon explains 4 key points the court used to determine that the subcontractor substantially complied with statute.

“(1) The defect in the NTO resulted from the owner’s providing the subcontractor with a notice of commencement that listed the wrong general contractor;

(2) the correct general contractor, designated by the owner for receipt of the NTO, received actual and timely notice that the subcontractor was supplying materials to the project;

(3) the general contractor treated the subcontractor as a potential lienor during the performance of the work by having the subcontractor attend meetings and sign partial lien waivers in requesting payments; and,

(4) the owner could not demonstrate any adverse impact caused by the error on the NTO.”

Unfortunate Irony

Do you know what the unfortunate irony is? As a best practice, the subcontractor goes to jobsites to obtain Notices of Commencement, directly from the owner, to ensure it has the correct Notice of Commencement for completing its Notice to Owner.

Take It Easy Florida

Florida is strict with statute compliance, however, as Kahlon says, “Florida courts may go to great lengths to preserve a subcontractor’s lien rights.” But don’t bank on Florida’s flexibility; familiarize yourself with and adhere to the statutory requirements.

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