Strict Construction of Florida Lien Law

Experienced construction attorneys are well aware of the mantra that Florida’s lien law is strictly construed which is why they harp on importance of following all statutory deadlines and forms set forth in Chapter 713. This principle was again hammered home by the Fourth District Court of Appeal in Rabil v. Seaside Builders, LLC, 42 Fla. L. Weekly D 1905 (Fla. 4th DCA August 30, 2017).

In this case, Seaside Builders was hired to build a single-family residence. Disputes arose on the Project and in May 2016, Seaside Builders recorded a claim of lien and filed suit to foreclose on the claim of lien. Thereafter, the homeowners posted a lien transfer bond and recorded a notice of contest of lien. On July 27, 2016 the clerk recorded the certificate of transfer bond and mailed a copy of the notice of contest of lien to Seaside Builders.

In October 2016, the homeowners filed a motion to release the bond and dismiss the foreclosure complaint because Seaside Builders had failed to suit against the lien transfer bond within sixty days of the recording of the notice of contest of lien. The clerk’s office refused to release the transfer bond without a court order.

The trial court held a hearing on homeowner’s motions wherein Seaside Builders argued that the motions should be denied on “principles of equity and excusable neglect” because Seaside Builders and its counsel both claimed that they were unaware of the lien transfer bond and the notice of contest of lien. The trial court took exception with the fact that homeowner failed to send copies of the lien transfer bond and notice of contest to Seaside Builders’ counsel. The trial court also found that the notice of contest of lien failed to advise Seaside Builders that they needed to file suit on the lien transfer bond within sixty days. Based on these findings, the trial court denied homeowner’s motion and permitted Seaside Builders to amend its complaint to pursue the lien transfer bond. Homeowner’s appealed the trial court’s decision.

On appeal, homeowner’s focused on the fact that they followed the statutory procedure in posting the transfer bond and recording the notice of contest of lien. Notably, on appeal Seaside Builders admitted that they received the notice of contest of lien but claimed it was received by a secretary rather than a corporate officer or its counsel. However, Seaside Builders argued that Section 713.22(2) violates due process because it does not require service on opposing counsel or that lienor be informed that an additional suit must be filed. The appellate court rejected these arguments and held that the statutory scheme in Chapter 713 must be strictly construed. Accordingly, the trial court’s decision was reversed with instruction to release the transfer bond and discharge the lis pendens.

The Seaside Builders decision demonstrates the importance of not only having an experienced construction attorney but also knowledge staff. Under the statute the notice of contest of lien would have been sent by the clerk’s office via certified mail. In this situation, I would guess that regardless of whether the individual who receives this package knows what a contest of lien is, that the individual would bring this package to attention of the company’s owner and/or counsel.

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