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Understanding Florida’s Mechanic’s Lien Laws: What is a Notice of Commencement?

Posted in Construction & Real Estate

Florida Statutes Chapter 713 governs construction liens, more commonly referred to as mechanic’s liens. Florida law governing mechanic’s liens is both comprehensive and complex. Even so, the statute provides important protections to contractors, subcontractors, suppliers and homeowners. For suppliers, contractors and subcontractors, the mechanic’s lien statute provides a method to assure full payment. Stunkel v. Gazebo Landscaping Design, Inc., 660 So.2d 623, 626 (Fl. 1995), citing Prosperi v. Code, Inc., 626 So.2d 1360, 1362 (Fla. 1993)(further citations omitted). For owner’s, Florida’s mechanic’s lien statute requires subcontractors to provide notice of possible liens, which allows owners to avoid double payment to a contractor, subcontractor, material supplier or laborer, for the same services or materials. Id., citing Aetna Casualty and Sur. Co. v. Buck, 594 So.2d 280, 281 (Fla. 1992).

One of the initial obligations of an owner under Chapter 713 is to prepare and file a “Notice of Commencement”. Section 713.13(1)(a) provides in relevant part:

[A]n owner or owner’s authorized agent before actually commencing to improve any real property, or recommencing completion of any improvement after default or abandonment, whether or not a project has a payment bond complying with s. 713.23, shall record a notice of commencement in the clerk’s office and forthwith post either a certified copy thereof or a notarized statement that the notice of commencement has been filed for recording along with a copy thereof.

The Fourth District discussed the purpose of the Notice of Commencement in a 1999 decision. As the court explained:

Though the Notice of Commencement was originally required to trigger a commencement date from which to measure time limitations under the Mechanic’s Lien Law, the information contained in the Notice of Commencement provides all the details necessary to complete a Notice to Owner. Indeed, Section 713.13(1)(a), Florida Statutes, requires with Notice of Commencement information including the name and address of the owner and contractor. Thus, the legislature contemplated that the Notice of Commencement would provide the lienor with the current names and addresses of the owner and contractor, so that the lienor could properly mail the Notice to Owner. If no Notice of Commencement was ever posted or recorded by the owner as mandated by the statute, a lienor may have difficulty obtaining the names and addresses of the owners and contractor.

Sasso Air Conditioning, Inc., v. United Companies Lending Corporation, 742 So.2d 468, 470 (Fla. 4th DCA 1999), citing Symons Corp. v. Tartan-Lavers Delray Beach, Inc., 456 So.2d 1254, 1259 (Fla. 4th DCA 1984). The Notice of Commencement signals the beginning of a construction project. Gulfside Properties Corp. v. Chapman Corp., 737 So.2d 604, 607 (1stDCA 1999). Under Fla. Stat. § 713.01(5), the “commencement of the improvement” is defined as “the time of filing for record of the notice of commencement provided in s. 713.13.” The key function of the Notice of Commencement is to provide the lienor and other third parties with the information they need to prepare necessary notices and related documents under Florida’s mechanic’s lien statutes. Gulfside Properties, 737 So.2d at 607.

Contractors, subcontractors and suppliers do not have to rely solely on the Notice of Commencement in order to file notices under the statute. Florida’s mechanic’s lien statute now provides other methods for a lienor to obtain information necessary to file a Notice to Owner. Id.For example, under Fla. Stat. § 713.06(2)(e), if an owner fails to file a Notice of Commencement, the lienor may rely on the information contained in the building application to serve the notice to owner. Id.

A property owner must file a Notice of Commencement before actually beginning the improvements made to his property. Lacentra Trucking, Inc., v. Flagler Federal Savings and Loan Assoc., 586 So.2d 474, 475 (Fla. 4th DCA 1991), citing Fla. Stat. § 713.13(1)(a). However, subsection (2) of 713.13 requires that if the improvement described in the Notice of Commencement “is not actually commenced within 30 days after the recording thereof, such notice shall be void and of no further effect.” The validity of the Notice of Commencement is important in several respects, one being that the liens of those who later perform or furnish labor, services or materials for the improvement of property relate back and attach from the date the Notice of Commencement was filed. Lacentra Trucking at 475.

The failure by a property owner to file a Notice of Commencement does not relieve a contractor or supplier from satisfying the mechanic’s lien statute’s notice requirements. Professional Plastering & Stucco, Inc., v. Bridgeport-Strasberg Joint Venture, et al., 940 So.2d 444, 449 (Fla. 5th DCA 2006), citing Mursten Constr. Co. v. C.E.S. Indus., Inc., 588 So.2d 1061 (Fla. 3d DCA 1991). In Mursten, a supplier failed to serve written notice of nonpayment on the contractor. Despite the fact that the property owner did not file a Notice of Commencement, the supplier’s failure to adhere to the requirements of the statute prevented its recovery under a construction bond. Id. at 1062-63.

Under Fla. Stat. § 713.02(6), a property owner can avoid construction liens on its property if the owner and contractor agree to a payment bond. Professional Plastering940 So.2d at 446. Under this section, if the contractor furnishes a payment bond, the owner is exempt from liability to subcontractors, suppliers, or other parties who may seek recovery against the bond. The owner remains liable, however, for liens from the contractor. Section 713.23 provides additional requirements concerning the payment bond. Subpart (1)(a) of that section states that the “payment bond required to exempt an owner under this part shall be furnished by the contractor in at least the amount of the original contract price before commencing the construction of the improvement under the direct contract, and a copy of the bond shall be attached to the notice of commencement when the notice of commencement is recorded.”

Future posts will address other key provisions of Florida’s mechanic’s lien statute. Notice of Commencement, as a requirement of the property owner under the statute, provides a good starting point in understanding the intricacies of Florida’s mechanic’s lien laws.

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Jason Cornell is an equity partner with the law firm Fox Rothschild LLP. Jason practices in Fox Rothschild’s Litigation and Financial Services departments. Jason focuses his practice on commercial litigation, including representing contractors, subcontractors and property owners in construction-related litigation. You can reach Jason at (561) 804-4415 or jcornell@foxrothschild.com.