The ownership interest of the party you contract with may dictate the reach of your lien rights. For example, if the owner of a property is the sole owner of the entire parcel, then a lien will extend to the entire interest of the owner. Conversely, if the party who contracts for an improvement to real property has no ownership interest at all in the subject property, a construction lien cannot reach the property. Take for example the facts of Paterson, Inc., v. Bonda. In that case, Paterson, a contractor has a contract with Mr. and Mrs. Bonda to improve the Bonda's condominium apartment. Before the work was completed the Bondas terminated Paterson. Paterson filed a mechanics lien against the Bondas and a lawsuit was filed.
Mr. Bonda filed for summary judgment based on his not having an ownership interest in the property. The trial court entered summary judgment for Mr. Bonda and awarded him attorney's fees for defending the lien foreclosure claim. Donald M. Paterson, Inc. v. Bonda, 425 So. 2d 206, 207, 1983 Fla. App. LEXIS 18769, 1-2 (Fla. Dist. Ct. App. 4th Dist. 1983)
Property Owned by Husband and Wife
What about property owned by a husband and wife where only one of the spouses signs the contract? Florida Statute §713.12 provides that a contracting spouse is considered the agent of the non-contracting spouse. As such, both of their interests in the property are subjected to a lien. For this principle of agency to apply, the contracting spouse must not be separated and living apart from the other spouse. However, the non-contracting spouse can limit the extent of the lien to only the interest of the contracting spouse by giving written notice of their objection to the contractor within 10 days of learning of the contract. The objection must also be recorded in the public records where the property is located within the same 10 days.
If the contracting party is a tenant with a leashold interest, only the leasehold interest is subject to a lien. The owner’s (Landlord) interest is not lienable unless the lease agreement actually requires the tenant to make certain improvements or is otherwise the essence of the lease (called the “pith” of the lease). The Owner (Landlord) can protect his interest, notwithstanding that the improvements are required by the lease or are the “pith” of the lease, by including a prohibition against liens in the lease agreement itself and recording the lease, short form of the lease or statutory notice in the public records in the county where the property is located.
What about liens on condominium property? Florida Statutes §718.121 governs liens against condo property. What determines the extent of any lien rights in this context is the date on which the declaration of condominium is recorded. When a lien is recorded before the declaration, the lien extends to the entire property (including common areas). If the lien is recorded after the declaration, then the lien extends to all the condominium parcels in the proportions for which the owners are liable for common expenses but the lien will not extend to the common areas.
Remember, public property generally cannot be liened. On public projects, security comes in the form of a payment and performance bond.
Knowing who you’re contracting with and their interest in the improved property can be just as important as making sure you timely serve a preliminary notice or record a construction lien. When in doubt, always consult with an attorney who is familiar with Florida’s Construction Law.
BY: JOSE A. RODRIGUEZ, ESQ.
The Soto Law Group, P.A.
2400 E. Commercial Blvd., Suite 400
Fort Lauderdale, FL 33308
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