Don't Rely on Outdated Versions of the Construction Lien Law

DON'T RELY ON OUTDATED VERSIONS OF THE CONSTRUCTION LIEN LAW

By: Larry Leiby, Esq. and Robert S. Tanner, Esq.

About the Author: Larry Leiby, Esq. was the founder and first chairman of the Florida Bar Construction Law Committee in 1976. He is the author of the Florida Construction Law Manual. He is Board Certified in Construction Law and was on the Construction Law Certification Committee that creates and grades the tests for construction law board certification. He was awarded the lifetime achievement award by the Florida Bar Construction Law Committee and teaches construction law at the Florida International University College of Law. He can be reached at leiby@mkpalaw.com. For more information, please visit www.mkpalaw.com.

Florida's Construction Lien Law can be complicated, and the many legislative revisions to it over the years, has only added to the complexity involved in analyzing the legal issues and case law arising under it. The recent case Fetta v. All-Rite Paving Contractors, Inc., Case No. 4D09-2708 (Fla. 4 th DCA Dec. 29, 2010) provides an example. In that case, All-Rite Paving Contractors, Inc. ("Contractor") filed a lawsuit against Loreto Fetta, the property owner ("Owner"), to enforce its lien claim. Contractor prevailed. Owner appealed.

On appeal, Owner argued that the trial court should not have granted judgment to Contractor because Contractor had not strictly complied with Florida Statutes, section 713.06(3)(d)1, by failing to identify an unpaid material supplier in the contractor's final payment affidavit. The trial court had concluded that Contractor was not required to include the unpaid material supplier in the affidavit because Owner was in privity with the supplier and therefore had notice that the supplier had to be paid. However, the appellate court found insufficient evidence in the record to support the trial court's conclusion and rejected it.

Nevertheless, the appellate court upheld the Contractor's judgment because it found that Contractor was not required to include the unpaid supplier in the final payment affidavit. Section 713.06(3)(d)1 requires a contractor's final payment affidavit to identify all lienors who "timely served a notice to owner on the owner and contractor . . . ." The evidence in the trial court showed that the unpaid material supplier had not served a notice to owner and, therefore, Contractor was not required to identify that material supplier it in the final payment affidavit.

Owner advanced an argument based on case law from 1997. In that case, the contractor argued that its subcontractor had not served a notice to owner and, therefore, was not within the definition of "lienor" and, therefore, did not have to be listed in the final payment affidavit. Based on the version of the Construction Lien Law that was applicable in 1997, the appellate court had ruled that the unpaid subcontractor had to be listed in the final payment affidavit. In the Fetta case, Owner's mistake, of course was that the statute applicable in the 1997 had since been revised to state that the final payment affidavit only had to list those unpaid subs and suppliers who had timely served a notice to owner. As a result, Owner's argument was soundly rejected.

Owners can find significant protections in the Construction Lien Law, if they understand it and follows its dictates. This applies to contractors, subcontractors, and all of those furnishing labor, services, or materials for the improvement of real property. Knowing the ins and outs of the Lien Law can be essential in whether a given project is completed at a profit or a loss. Experienced construction law counsel often is the key to securing those protections and protecting your interests. Contact the attorneys at Malka & Kravitz, P.A. to have your questions answered.