02Nov 2014

Section 713.13, F.S., provides that the recording of a Notice of Commencement (NOC) gives constructive notice that claims of lien may be recorded and will have priority over any conveyance, encumbrance or demand not recorded against the real property prior to the time the notice is recorded. However, any conveyance, encumbrance or demand recorded prior to the time the notice is recorded and any proceeds thereof, regardless of when disbursed, shall have priority over liens. The NOC must be recorded with the clerk of the court where the property is located by the owner or the owner’s agent before a contractor actually begins an improvement to real property or recommences completion of any improvement after default or abandonment. A certified copy of the recorded notice or a notarized statement of filing and a copy must be posted at the jobsite. The NOC must include the legal description of the property, the street address and the tax folio number, if available. It must also include a general description of the improvement, the name and address of the owner, the name and address of the contractor, the name and address of any person designated to receive notices, and the anticipated expiration date if different from one year. The form for the NOC is provided in s. 713.13(1)(d), F.S.

For contracts greater than $2,500, the applicant for the building permit must file a certified copy of the recorded notice or a notarized statement of filing and a copy with the building permit authority. The notice must be filed before the first inspection or the property will not be inspected.7

A NOC is specifically not required prior to issuing a building permit.

The building permit must include a 14-point capitalized notice regarding the filing of a NOC. All liens from persons who do work to improve a property relate back to the filing of the NOC.

The NOC is valid for 1 year, unless otherwise stated in the notice. Any payments made by the owner after the expiration of the NOC are considered to be improper payments.

If the improvement described in the NOC is not commenced within 90 days of the recording of the notice, then the notice is “void and of no further effect” which results in any payments after that time also being improper.

Ray Garcia, Esq.
Board Certified in Real Estate Law
by the Florida Bar
www.floridaconstructionlawgroup.com

02Nov 2014

Section 713.20, F.S., provides for the waiver or release of a lien by any lienor giving a Notice to Owner and may be requested by the owner before making a payment to the contractor. The provision does not allow the lienor to waive the right to payment in advance of doing the work, but nothing prohibits the waiver prior to receiving payment. These waivers must be obtained by the owner prior to each payment to the contractor if the owner has received a Notice to Owner from a subcontractor. If the owner fails to request a Waiver or Release of Lien prior to each payment, the payments become improper. If the owner’s payments become improper, he or she may become liable to any lienor who has properly served notice and recorded a lien and therefore may end up paying twice for services or materials. Requiring and obtaining a Release of Lien at each payment for every Notice to Owner filed by a subcontractor “closes the loop” and releases the owner from liability for those payments.

Ray Garcia, Esq.
Board Certified in Reale Estate Law
by the Florida Bar
www.floridaconstructionlawgroup.com

02Nov 2014

Section 713.06(2)(a), F.S., provides that, prior to filing a lien, a lienor who does not have a direct contract with the homeowner must serve the homeowner with a Notice to Owner that sets forth the lienor’s name and address, a description sufficient for identification of the real property, and the nature of services or materials furnished or to be furnished. The Notice to Owner must be served before commencing, or within 45 days of commencing, to furnish the service or materials by the potential lienor. The notice must be served before the owner’s final payment to the contractor, after the filing of the contractor’s affidavit.

If a Notice to Owner is not served, then a lien cannot be enforced. Section 713.06(2)(c), F.S., provides the form which should be used for the Notice to Owner. The Notice to Owner includes a warning to the owner that subcontractors may file a lien against the owner’s property even if the homeowner has made payment in full. Under s. 713.06(2)(d), F.S., a Notice to Owner may be served on a lender if designated in the Notice of Commencement as a person to receive the Notice to Owner. After receiving a Notice to Owner, the lender is required to make proper payments under s. 713.06(3)(c), F.S. If the lender fails to do so, it is liable to the owner for “all damages sustained by the owner as a result of that failure.”

Ray Garcia, Esq.
Board Certified in Reale Estate Law
by the Florida Bar
www.floridaconstructionlawgroup.com

27Oct 2014

Now that the Florida construction industry is recovering from years of downturn, the Associated General Contractors of America said in a new report that Florida Contractors are having a hard time locating skilled workers such as carpenters and electricians, . In the AGC’s survey of about 1,000 contractors nationwide of which only 11 contractors in Florida were represented.

According to the Associated General Contractors of America, Carpenters are in most demand in Florida,then drywall installers, electricians, equipment operators and painters, according to the survey by the Associated General Contractors of AmericaFlorida. In addition, Florida contractors also reported having trouble finding some professional workers, especially project managers.

According to the survey, South Florida contractors also have said they are having trouble filling some specialty jobs, citing the loss of workers to the oil industry and others who left the business during the recession and housing crisis to find employment in other indurties. The fact that the Florida construction industry is a good sign for real estate and market growth.

Ray Garcia, Esq.
Board Certified in Reale Estate Law
by the Florida Bar
www.floridaconstructionlawgroup.com

18Sep 2014

Florida contractors have developed a reputation for have suspect business practices such not completing jobs properly, using inferior quality products and overcharging for works or sub contracting work off to less reputable individuals. Here are some tips that may help you in avoiding being taken advantage of by a contractor.

1. Obtain Multiple Estimates. Contractors will often provide you a low estimate to get the job. Then, as the work progresses they will upsell you on products and services such change orders. Always get a very detailed estimate that includes the cost for materials, labor, fees and the contractor’s profit margin.

2. Create a progress payment schedule. A progress payment schedule incentivizes the contractor in continuing to working on the project. Avoid paying large upfront deposits that incorporates immediate profits. Schedule the payment whereby the contractor receive payment after completing portions of the work.

3. Ask the contractor for references. Find out from others or the contractor himself individuals who have used the contractor in the past. Then, ask those individuals how they heard about the contractor. Ask if you can visit the job to inspect the quality of the work and products used on the job.

4. License Status.  Contact the department of Business and Professional Regulation to see if the contractor’s license is in good standing or the contractor has received complaints from other consumers. Additionally, ask for a copy of the contractor’s insurance policy.

Ray Garcia, Esq.

Board Certified in Real Estate Law

by the Florida Bar

www.Floridaconstructionlawgroup.com

20Aug 2014

Florida’s Second District Court of Appeal in the case of Snell v. Mott’s Contracting Services, Inc. addressed an issue pertaining to lien rights and the difference between filing a lawsuit and resolving a dispute through arbitration. A big concern that this case resolves is that attempting to resolve your dispute through arbitration instead of litigation may cost you some of your Florida’s lien law rights.

The Snell case involved a construction contract between the homeowner and the contractor that had a provision which provided for disputes to be resolved through arbitration rather than litigation. In Snell,  the contractor properly recorded its lien, and the homeowners filed a lawsuit in which they asked the court to determine that the lien was invalid.  The contractor moved the case to arbitration based on the arbitration provision. The court agreed and the parties were to arbitrate the matter. The contractor prevailed in the arbitration and was entitled to recover its attorney’s fees in accordance with Section 713.29 of the Florida Statutes. The appellate court found that the contractor, by asking to have its dispute resolved through arbitration, did not bring an action “in a court of competent jurisdiction.” In doing so, the court held that the contractor’s rights under Florida Lien law had expired, and that the contractor had no basis for recovering its attorney fees. As a result of the hodling in Snell, a contractor may lose a substantial portion of its recovery merely because he followed the language of his contract by resolving his dispute through arbitration.

Ray Garcia, Esq.

Board Certified in Real Estate Law

by the Florida Bar

www.floridaconstructionlawgroup.com

11Aug 2014

As far as zoning is concerned, the tenants need to do their due diligence and independently ascertain that the location that they have selected to lease allows for the business that the tenant is carrying out. Tenants should try to negotiate into the lease agreement representations and warranties on the part of the landlord that the leased premises are zoned for the tenant’s intended business use. Landlords on the other hand, should include a provision that they make no warranties as to the zoning of the leased premises for the tenants intended use only when the landlord believe that the zoning for the lease premises may not permit the tenants intended use.

As far code violations, they should generally be handled in a similar manner as zoning issues referenced above with each party attempting to shift the burden of liability away from each other. However, with code violations, the tenant must thoroughly inspect the premises with a contractor to determine if there are any code violations. Real estate attorneys recommend to their tenant clients that they perform a lien search with a lien search company that includes, code violations and open permits before signing a lease agreement for the premises. The landlord also needs to take an extra precaution especially when a tenant is making improvements to the leased premises and require the tenant to indemnify the landlord from any costs and fees imposed by code violations caused by the tenant’s work on attempting to improve the premises. Again, the landlord should also incorporate into the lease agreement, the right to cure the code violations himself and assess the costs and fees associated with resolving the code violation on the tenant.

Ray Garcia, Esq.

Board Certified in Real Estate Law

by the Florida Bar

www.floridaconstructionlawgroup.com

05Aug 2014

As tenant’s counsel you want to secure provisions in the lease agreement that the landlord’s build-out work as stated in the plans and specifications consists of items that a landlord may be required to complete by law such as local building code compliance work, structural work, roofing work and ADA compliance. In order to avoid the confusion as to what work would be considered the obligation of the landlord and what build-out work would be considered the obligation of the tenant, you would want the obligations spelled out in the lease agreement. Also, as an additional measure of precaution a tenant may want the landlord to complete his portion of the work at his expense and prior to the landlord turning over possession. This will avoid confusion and disagreements going forward.

Ray Garcia, Esq.

Board Certified in Real Estate Law

by the Florida Bar

www.floridaconstructionlawgroup.com

17Jul 2014

A lien is a method detailed by statute for a contractor or materialman who has provided labor, materials or services to obtain payment under Florida Statute Section 713. In order to obtain a lien, the contractor or materialman must prepare an affidavit stating that they have not been paid for either the labor, materials or services and that the real property was improved by the labor, materials or services. Florida Statute Section 713 states what types of items are lienable and who is entitled to a lien. Generally, improvements to real property, such as removing, repairing, demolishing excavating and landscaping to name a few are permissable improvements. Also, contractors, architects, interior designers, surveyors, mappers, engineers, materialman, contractors and subcontractors are the types of persons entitled to place a lien on real property.

Ray Garcia, Esq.

Board Certified in Real Estate Law

by the Florida Bar

www.floridaconstructionlawgroup.com

12Jun 2014

Florida Construction Law Group concentrates in both the prosecution and defense of construction loan foreclosures. In Florida, construction loan foreclosures can become very complex and entirely different from a typical residential loan foreclosures. Typically, construction loans are funded through draw requests, which are based on the progress of the project. Continue reading

03Jun 2014

A lien is a charge on real property used to secure payment for those who have furnished labor, materials or services to a project. Under Chapter 713, Florida Statutes, liens are affidavits prepared under oath by the lienor stating that the lienor has provided labor, material, supplies or services to improve real property and has not been paid.

There are several requirements for a Claim of Lien: Continue reading

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