The basics of enforcing a construction lien

On Behalf of | Dec 8, 2023 | Construction Law

Construction companies and many other professionals play a major role in developing the Florida economy. They help improve existing structures and erect new edifices. They can also help homeowners increase the value of a property. Sadly, they do not always receive timely payment for the services they provide. Sometimes, construction professionals must seek a construction lien to obtain full payment.

A variety of different individuals and businesses may be eligible for a construction lien. Obviously, construction professionals and firms not paid for their services can file a lawsuit requesting a construction lien against the property. Additionally, materialmen, including individuals and businesses that provide construction materials, can also potentially seek a construction lien against a property owner after delivering materials but not receiving payment in full.

Liens help to ensure that businesses and professionals receive full payment for the material delivered or services provided for a construction project by using the property as collateral for the amount due. However, on its own, a lien is basically just a record of the debt. Businesses need to enforce a lien or risk going without the financial compensation they deserve.

What does lien enforcement entail?

Enforcing a lien typically requires that a business or professional go to civil court. First, the party in need of payment must sue to obtain a construction lien or mechanics lien. Then, they must record the lien at the county recorder’s office. After recording the lien against the property, they can then ask the courts to enforce the lien because the owner has not yet paid the debt in full. Lien holders may seek enforcement within a year or may lose the right to do so. The enforcement process often leads to foreclosure proceedings on the property.

The owner will either need to sell the property or refinance it to use some of the equity they have accrued. Those funds can help them repay the parties who provided raw materials or services for a construction project. Businesses are often reticent to enforce their liens, as they do not want to cause harm to clients.

However, the process of attaining a lien is relatively worthless if there is no intent to follow through with its enforcement. Notice of potential lien enforcement may be a more powerful motivator for a property owner than the generic risk of a title blemish. Enforcing a lean requires timely action and proper documentation. Seeking legal guidance will increase the chances of success when enforcing a construction lien to obtain proper compensation for a Florida construction project.