The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Rules
BILL: CS/SB 622
INTRODUCER: Judiciary Committee and Senator Perry
SUBJECT: Liens and Bonds
DATE: March 23, 2021 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Cibula Cibula JU Fav/CS
2. Ponder McVaney GO Favorable
3. Cibula Phelps RC Favorable
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/SB 622 revises several provisions of the Construction Lien Law, which is codified in part I of
chapter 713, F.S. The most significant of these changes are summarized below.
The Construction Lien Law provides several statutory forms for use by parties to a construction
contract to waive or release their rights to record a lien or make a claim against a payment bond
in exchange for payment for their work. The bill provides that provisions included in a waiver or
release that are not related to the provisions of the statutory forms are unenforceable.
If a person or subcontractor is not paid for work on a construction project, the construction lien
laws allow the person to record a lien against the improved property. If multiple contracts are
involved, then multiple liens must be recorded. The bill under these circumstances allows a
person or subcontractor to record a single consolidated lien for amounts owed under multiple
contracts for the same construction project.
A notice of commencement form is a form prescribed by the construction lien laws. The form
identifies those responsible for a construction project. The bill revises the form to identify more
clearly the owner or lessee who is responsible for a construction project.
The bill also revises procedures relating to notices of termination, another statutory form used in
connection with the Construction Lien Law. The changes will provide more time for a person to
serve a notice to owner or a notice to contractor to preserve rights to record a lien or pursue a
BILL: CS/SB 622 Page 2
claim against a payment bond. Currently, a person who begins work on a construction project in
the 15 days before a notice of termination is recorded may have the time reduced for serving the
documents without notice.
No fiscal impact is expected on state and local governments.
The bill takes effect July 1, 2021.
II. Present Situation:
In a construction project, the owner of the property to be improved has an interest in ensuring
that the contractor performs the construction work in the time and manner described in the
construction contract. Contractors and subcontractors, sub-subcontractors, laborers, and
materialmen have an interest in receiving payment for their work. Those individuals have a lien
or prospective lien on the property improved and are known as lienors. Mechanisms that address
these interests of property owners and lienors are set forth in the Construction Lien Law, codified
in part I of chapter 713, F.S., for private construction contracts, s. 255.05, F.S., for public
construction contracts, and s. 337.18, F.S., for construction or maintenance contracts with the
Department of Transportation.
These mechanisms ensure payment and are especially important where many lienors who are not
in privity with the owner perform work on a construction project. A lienor not in privity with the
owner has a contract with the contractor or a subcontractor, but no direct contractual relationship
with the owner. As a result, a lienor’s identity, work, and charges for services might be unknown
to the owner or contractor unless the lienor complies with the notice requirements of the
construction lien laws. Additionally, compliance with the notice requirements by the various
deadlines is a prerequisite to enforcing a lien or pursuing a claim against a payment bond.
A property owner who contracts for the construction of an improvement must carefully follow
the requirements of the Construction Lien Law or the owner may become liable for a
contractor’s failure to pay subcontractors and others.
Building Permit Warning to Owner
When a property owner obtains a building permit for an improvement, the permit includes a
large, capitalized, boldface warning about the Construction Lien Law and how a person’s failure
to comply with the law may result in the person paying twice for the same improvement. The
warning states:
WARNING TO OWNER: YOUR FAILURE TO RECORD A NOTICE OF
COMMENCEMENT MAY RESULT IN YOUR PAYING TWICE FOR
IMPROVEMENTS TO YOUR PROPERTY. A NOTICE OF
COMMENCEMENT MUST BE RECORDED AND POSTED ON THE JOB SITE
BEFORE THE FIRST INSPECTION. IF YOU INTEND TO OBTAIN
BILL: CS/SB 622 Page 3
FINANCING, CONSULT WITH YOUR LENDER OR AN ATTORNEY
BEFORE RECORDING YOUR NOTICE OF COMMENCEMENT1
A person may pay twice for an improvement if a payment is an “improper payment.” The
distinction between a proper and an improper payment may be described as follows:
If an owner fulfills all the duties the [Construction] Lien Law places upon him, his
liability for all mechanics’ lien claims cannot exceed the contract price. However,
if the owner makes improper payments, then he has failed to comply with the
[Construction] Lien Law, and his liability for mechanics’ lien claims may exceed
the contract price.2
Notice of Commencement
Construction work generally begins once a “notice of commencement” is posted on the job site
and recorded in the court clerk’s office.3 This notice identifies who owns the property to be
improved or who is responsible for the construction project. Accordingly, the notice of
commencement will list the name and address of the owner of the property, the fee simple
titleholder if different from the owner, the contractor, any lessees, the lender, and the surety.4
Lienors use the contact information in the notice of commencement to keep the property owner
or lessee informed of their identity, work on the construction project, and need to be paid.
A notice of commencement generally has a duration of 1 year after it is recorded. 5 Any
construction liens recorded while the notice of commencement is in effect generally attach and
take effect on the date that notice of commencement is recorded.6 Additionally, a payment made
by the owner after the notice of commencement expires is considered an improper payment.7,8
Notice to Owner/Notice to Contractor
After a notice of commencement is posted and recorded, lienors must serve the property owner
and the contractor with a notice to owner or notice to contractor.9 Serving these documents
within the statutory timeframes is a prerequisite to enforcing a lien on the improved property or a
claim against a payment bond.10
1
Section 713.135(1)(a), F.S.
2
Tamarac Village, Inc., v. Bates & Daly Co., 348 So. 2d 23, 24 (Fla. 4th DCA 1977) (citations omitted).
3
Section 713.13(1)(a), F.S.
4
Section 713.13(1)(a) and (d), F.S.
5
Section 713.13(1)(c), F.S.
6
Section 713.07(2), F.S.
7
Section 713.13(1)(c), F.S.
8
In Tamarac Village, Inc., v. Bates & Daly Co., 348 So. 2d 23, 24 (Fla. 4th DCA 1977), the appellate court held that a
payment made by the property owner to a contractor is an improper payment if the payment is made before the notice of
commencement is recorded. The decision was based on s. 713.06(3)(a), F.S. (1973), which stated, “The owner shall not pay
any money on account of a direct contract prior to recording of the notice provided in §713.13, and any amount so paid shall
be held improperly paid.” For reasons unknown, the provision has since been repealed.
9
Sections 255.05(2)(a)2., 337.18(1)(c), 713.06(2), and 713.23(1)(c), F.S.
10
Id.
BILL: CS/SB 622 Page 4
A notice to owner informs the owner of a lienor’s identity and work performed.11 Upon receipt
of the notice, the owner becomes responsible for ensuring that the lienor is paid for its work even
if the contractor is paid in full. To protect against a lien by the lienor or having to pay twice for
the same work, the notice warns:
TO AVOID A LIEN AND PAYING TWICE, YOU MUST OBTAIN A WRITTEN
RELEASE FROM US EVERY TIME YOU PAY YOUR CONTRACTOR.12
A notice to contractor is similar to a notice to owner, but it is required when the contractor
furnishes a payment bond that exempts the owner’s property from liens or when the contract is
for a public improvement.13 A notice to contractor advises the contractor of the identity of the
lienor and the lienor’s work, and informs the contractor that the lienor intends to look to the
contractor’s bond if the lienor is not paid.
Notice of Nonpayment
A notice to owner or a notice to contractor makes an owner aware of the lienor’s identity to
ensure that the lienor is paid for its work. If a lienor is not paid immediately upon commencing
to furnish labor, services, or materials on a construction project, however, the lienor may serve a
notice of nonpayment on the property owner or, for contracts having a payment and performance
bond, on the contractor and surety.14 A notice of nonpayment “must be under oath and served
during the progress of the work or thereafter, but may not be served later than 90 days after the
final furnishing of labor, services, or materials by the lienor.”15
Final Furnishing of Labor, Services, and Materials and Lien Law Deadlines
The last date that a lienor furnishes labor, services, or materials is known as the “final
furnishing.”16 This date is used to establish the deadline by which a lienor must record a claim of
lien or the deadline for the service of a notice to contractor. “[A] claim of lien may be recorded at
any time during the progress of the work or thereafter but not later than 90 days after the final
furnishing of the labor or services or materials by the lienor.”17
Waiver and Release of Lien/Waiver of Claim Against Payment Bond
The Construction Lien Law requires lienors to use forms that “substantially” follow a statutory
form when executing a waiver or release of lien or a waiver of a right to make a claim against a
payment bond in exchange for payments.18 The forms to waive or release a lien are shown
below, but forms for payment bonds are essentially identical:
11
Section 713.06(2)(c), F.S.
12
Section 713.06(2)(c), F.S.
13
Sections 713.23(1)(a), 337.18(1)(c), and 255.05(2)(a)2., F.S.
14
Sections 713.23(1)(d), 255.05(2)(a), and 337.18(1)(c), F.S.
15
Section 713.23(1)(d), F.S. With respect to notices of nonpayment for public construction projects and construction
maintenance projects, ss. 255.05(2)(a)2. and 337.18(2)(c), F.S., provide the same deadline.
16
Section 713.01(12), F.S.
17
Section 713.08(5), F.S.
18
Sections 713.20(4) and (5) and 713.235(1) and (2), F.S.
BILL: CS/SB 622 Page 5
WAIVER AND RELEASE OF LIEN UPON PROGRESS PAYMENT
The undersigned lienor, in consideration of the sum of $____, hereby waives and releases its lien and
right to claim a lien for labor, services, or materials furnished through (insert date) to (insert the name
of your customer) on the job of (insert the name of the owner) to the following property:
(description of property)
This waiver and release does not cover any retention or labor, services, or materials furnished after the
date specified.
DATED on ___, (year) . (Lienor)
By: __________
WAIVER AND RELEASE OF LIEN UPON FINAL PAYMENT
The undersigned lienor, in consideration of the final payment in the amount of $__________, hereby
waives and releases its lien and right to claim a lien for labor, services, or materials furnished to (insert
the name of your customer) on the job of (insert the name of the owner) to the following described
property:
(description of property)
DATED on ____, (year) . (Lienor)
By: __________
Although the Construction Lien Law requires waivers and releases of liens to be executed on
forms that substantially follow the statutory forms, the law also provides that noncompliant
forms are enforceable. Specifically, the law states that “[a] lien waiver or lien release that is not
substantially similar to the forms [above] is enforceable in accordance with the terms of the lien
waiver or lien release.”19
19
Section 713.20(8), F.S. Section 713.235(5), F.S., relating to waivers of claims against payment bonds, is effectively
identical: “A waiver that is not substantially similar to the forms in this section is enforceable in accordance with its terms.”
BILL: CS/SB 622 Page 6
Priority of Liens
Once a lienor satisfies all the statutory prerequisites and remains unpaid, the lienor may record a
lien on the improved property, which is a prerequisite to foreclosing on the property. Normally,
the priority of liens, which establishes the order in which claims are paid from the proceeds of a
foreclosure sale, is determined by the order in which the liens are recorded.20 Under the
Construction Lien Law, however, all construction liens are treated as if they were recorded on
the date that the notice of commencement was recorded.21
Once recorded, the priority of a construction lien in relation to other types of liens or mortgages
is set forth in s. 713.07(3), F.S., which states:
All [construction] liens shall have priority over any conveyance, encumbrance or
demand not recorded against the real property prior to the time such lien attached
as provided herein, but any conveyance, encumbrance or demand recorded prior to
the time such lien attaches and any proceeds thereof, regardless of when disbursed,
shall have priority over such liens.22
As a result, a construction lien will generally take priority over other liens or mortgages recorded
after the recording of the notice of commencement, and a construction lien is inferior to other
liens or mortgages recorded before the recording of the notice of commencement.
Serving Notices
The proper functioning of the Construction Lien Law is substantially based on the delivery and
receipt of notices among property owners, lienors, contractors, and sureties. With respect to
public construction contracts, the law provides that a lienor, as a prerequisite to making a claim
against a payment bond, must “serve a written notice of nonpayment on the contractor and on the
surety.”23 Thus, the law appears to require a claimant to serve two original documents when
providing a notice of nonpayment.
When instruments including notices are served, the Construction Lien Law allows service to be
accomplished through by “actual delivery to the person to be served” and by “common carrier
delivery service or by registered, Global Express Guaranteed, or certified mail, with postage or
shipping paid by the sender and with evidence of delivery.”24 The law further provides that
service of an instrument is generally effective on the “date of mailing.”25 Because the law allows
an instrument to be shipped or mailed, the law may imply that a different effective date applies if
an instrument is delivered by a delivery service other than U.S. mail.
20
The rule “governing priority of lien interests is ‘first in time is first in right.’” Holly Lake Ass’n v. Fed. Nat’l Mortg. Ass’n,
660 So. 2d 266, 268 (Fla.1995) (citing Walter E. Heller & Co. Southeast, Inc. v. Williams, 450 So. 2d 521, 532 (Fla. 3d DCA
1984), review denied, 462 So. 2d 1108 (Fla.1985)).
21
Section 713.07(2), F.S. Similar provisions exist with respect to public contracting in s. 255.05(5)(d) and (f), F.S.
22
Section 713.07(3), F.S.
23
Sections 255.05(2)(a)2., F.S. Section 713.23(1)(d), F.S., with respect to private construction projects, contains almost
identical language.
24
Section 713.18(2)(a)(b), F.S.
25
Section 713.13(3)(a), F.S.
BILL: CS/SB 622 Page 7
Notices of Termination
An