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Contest of Lien

Florida

Recently we received a Contest of Lien (Florida). How does this impact our Lien Rights, what's the advantages (from the Property Owner's perspective)? From my understanding, this will accelerate our response and require us to foreclose on the property within 60 days. If so, what is the standard process for foreclosure?

5 replies

Jun 2, 2020
You are correct. If you've received a Notice of Contest of Lien, that means the owner has reduced the deadline to enforce your FL mechanics lien claim to just 60 days of receipt of the notice. These rules can be found under Fla Stat. §713.22. As far as why an owner would send a Notice of Contest of Lien, there are two basic reasons. The first is merely to shorten the time to enforce, hoping that the claimant misses the deadline and the claim expires. The second would be that the property owner either thinks the claim is bogus, or they're calling the claimant's bluff assuming that they don't want to spend the time or money initiating a foreclosure action. Keep in mind, that a foreclosure action is a full lawsuit, which involves preparing the complaint, naming the correct parties, and including any other potential claims the lienholder may have, such as breach of contract. Since this is a lawsuit, you should contact a local attorney to guide you through the process; and if filing on behalf of a company you'll be required to. We have quite a few Florida construction attorneys in our expert center community that you can reach out to personally; a list of which, along with their contact information can be found here. Here's another article that you may find helpful: Good luck!
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Jun 2, 2020
Alex, Thank you for the response. Is a Foreclosure the only response that we as material suppliers have (excluding informally reaching out to their legal team to come to an agreement)?
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Jun 2, 2020
Foreclosing a mechanics lien isn't the only option, but it is the most effective way to recover payment as it goes directly to the source of money on the project (i.e. the property owner). Although there are other options besides trying to work out a payment plan. Most notably breach of contract or unjust enrichment claims against the party who hired you. Depending on the amount in controversy, this may be brought in Florida small claims court; the maximum claim allowable is $8000. Sending payment demand letters to the hiring party stating that you are willing and able to file a lawsuit would be a good way to initiate the process. Another option would be to send the debt to a collections agency to do the heavy lifting pursuing your debt.
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Jun 3, 2020
You likely have three possible claims against the property owner -- lien foreclosure, breach of contract, and unjust enrichment. You are going to need to file a lawsuit to take advantage of any of those though. I recommend you consult with a construction attorney who can more fully go over your rights with you. Feel free to contact me if you have any further questions.
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Jun 3, 2020
You are correct in your understanding. The Notice of Contest of Lien speeds up the process and requires you to foreclose on your lien within 60 days of receipt of the Notice. Simply put, you are required to file a lawsuit (Complaint) for lien foreclosure in the jurisdiction in which the property lies. Typically, these types of lawsuits includes at least three causes of action (lien foreclosure, breach of contract, unjust enrichment and/or quasi contract). Once the Complaint is filed a summons must be issued by the clerk of the court which then must be served upon your Defendant(s).

If you are unable to handle this yourself, you should seek assistance from a competent construction attorney.
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