By: Robert W. Bible, Jr., Attorney At Law

Although many aspects of this article pertain to all home improvement projects, the focus will be on home improvement projects over $2,500.00.  Florida’s construction lien laws require an owner, under any direct contact to improve real property in excess of $2,500.00, to take defined steps to ensure that the contractor and subcontractors are properly paid.  Failure to take these steps may result in a lien on the owner’s property, and could result in an owner paying twice the amount of the contracted services.  A few critical steps to safely navigate a home improvement project are discussed below.

  1. Selecting a Contractor: Since, in most situations, an owner relies on the contractor to comply with statutorily imposed payment obligations, selecting a contractor may be the most critical safeguard an owner can take to ensure any home improvement project transitions smoothly from start to finish.  We have all seen news reports of local Sheriff offices staging home improvements to uncover unlicensed individuals posing as contractors.  Verifying the license of any company or individual you intend to hire to perform home improvements is the first step you should take BEFORE signing a contract or authorizing performance of any work.  You should obtain the license number of the company or individual you intend to hire, and verify both the license and the type of license on the Florida Department of Business and Professional Regulation (“DBPR”) website at: http://www.myfloridalicense.com/DBPR or by calling the DBPR at 850/487-1395  (on the DBPR website, click on the link “Verify a License”).  There is also a “glossary of terms” on the DBPR website for a general explanation of the type of license and types of improvements allowed by that specific license.  For instance, a license number beginning with CGC reflects a “certified general contractor”.  A license beginning with CBC reflects a “certified building contractor”.  The types of improvements included within the scope of the license of a certified building contractor are more limited than those included within the scope of the license of a certified general contractor.  As such, it is important before hiring a contractor to make certain that the renovations and improvements to be made are within the scope of the particular contractor’s license.  Also, in verifying a license, it is important to understand that a “certified” contractor is one who can perform the licensed services anywhere within the State of Florida.  A “registered” contractor may only perform the licensed services within the city or county of registration.

 

  1. Navigating the Construction Contract: Most contractors use form contracts written primarily for the protection of the contractor, and not the owner.  A pre-printed form of several terms and conditions does not become a contract unless and until it is signed by both parties.  As such, it is important before you sign any contract for home improvements to be certain it contains each and every item you believe and intend to be part of the home improvement project.  If the construction contract itself does not provide for the protection of the owner, an addendum to the contract should be prepared prior to the time the contract is signed by both parties.  At a minimum, each construction contract should include basic provisions such as (i) a full description of the property to be improved; (ii) a very detailed description of all improvements intended to be made to the property; (iii) the total contract price, and the incremental amounts to be paid during the construction progress (if a lender is involved, it is critical to tie payment schedules under the construction contract with lender disbursement requirements under the loan agreement); (iv) the time of commencement and the time of completion; (v) amounts of allowances or credits (i.e., selection of materials, fixtures, appliances, flooring, etc.); (vi) compliance with construction lien laws, and lien waiver and release requirements (see Notice to Owner requirements below); (vii) warranties; and (viii) insurance and bond requirements.

 

  1. Navigating Construction Lien Laws: Because Florida law imposes restrictions upon a particular contractor based upon his or her specific license, many home improvement projects will involve not only the initial contractor hired to complete the project, but several subcontractors.  For instance, a project to design and develop a backyard entertainment area may involve the general contractor, with several subcontractors, such as a swimming pool contractor, a landscape architect, a plumbing contractor, an electrical contractor, a roofing contractor, and numerous suppliers of labor and materials.  Although the owner may enter into just one contract with the general contractor, Florida’s construction lien laws impose upon the owner the responsibility to ensure that all payments made to the general contractor are in turn properly allocated to and among all of the other subcontractors in accordance with the work they perform and the particular contract they have in place with the general contractor.  Therefore, when a home improvement project is subject to the Florida construction lien laws, an owner must understand the required steps he or she must take in order to insure “proper payments” are made to these subcontractors.  A few of the primary steps and some safeguards to help an owner comply are described below.

 

  1. Notice of Commencement: Before actually commencing to improve any real property under a direct contract in excess of $2,500.00, the owner of such real property must record a Notice of Commencement in the county clerk’s office and post a certified copy of the recorded Notice of Commencement at the jobsite.  The Notice of Commencement must be signed by the owner (i.e., not by the contractor or any one on the owner’s behalf).  The Notice of Commencement is a statutory form, and must include the required statutory information, which basically consists of the legal description of the property being improved, a general description of the nature and scope of the improvement, the name and address of the owner and a general explanation of the owner’s ownership interest in the property to be improved (i.e., fee simple title holder), the name and address of the contractor, information on any type of performance or payment bond involved, name and address of any lender, the name and address of an individual other than the owner to receive notices or documents, and the name and address of any person in addition to the owner who is to receive “notice to owner” forms from subcontractors (See Notice to Owner below).  A Notice of Commencement is generally effective for one (1) year after the date of recording, and commencement of the improvements must start within ninety (90) days after the date of recording, or else the Notice of Commencement becomes void and of no further effect.  The Notice of Commencement provides all subcontractors the information they need to file the “Notice to Owner” they must timely serve in order to protect their lien rights under the Florida construction lien laws.  Failure to properly record and post a Notice of Commencement puts an owner at greater risk of subjecting the property to construction liens.

 

  1. Notice to Owner: A Notice to Owner is a form used by subcontractors who do not have a direct contract with the owner to notify the owner that they performed services or supplied materials to the jobsite, and are looking to the owner to make certain they are “properly paid” for their services or materials.  Once an owner receives a “timely” Notice to Owner, the owner is responsible, when making any payments to the contractor, to make certain that the portion of such payment due and payable to the subcontractor serving the Notice to Owner is in fact paid to them.  So that an owner may know in advance the various subcontractors who may be serving a Notice to Owner during the course of the project, the owner should request from the contractor a list of all subcontractors and suppliers.  Further, once a subcontractor serves a Notice to Owner on the owner, the owner should demand a written statement under oath from that subcontractor affirming the nature of the services performed or to be performed, the materials furnished or to be furnished, the amount paid to the subcontractor to date, any amount due, and the amount to become due for future services or materials.  Prior to making any payment to a contractor, the owner should request an affidavit from the contractor reflecting all those subcontractors who performed services up to the date of payment, the amounts due and payable to those subcontractors, the amount which has been paid to them to date, and the amount of any balance due to them.  In turn, in conjunction with making the payment to the contractor, the owner should obtain from the contractor and all subcontractors listed on the affidavit, a partial or final (depending on whether the contractor or subcontractor still has work yet to be performed) waiver and release of all lien rights, through the date of the payment, together with an assertion that they have been paid all amounts due and owing to them through the date of such payment; or otherwise reflect the amount now due and owing.  At a minimum, at the time of each payment, an owner should require from the contractor a waiver and release of lien (partial or final, as the case may be) from every subcontractor who has timely served a Notice to Owner.

 

  1. Making Final Payment: Before a final payment is made to the contractor under the home improvement contract, the owner must, by law, obtain a contractor’s final affidavit.  The final affidavit must set forth the amount due to the contractor, if any, and the amounts due to any subcontractors as specifically named in the affidavit.  If the final affidavit reflects amounts due to subcontractors, it is the owner’s responsibility to make certain these amounts are properly paid, either by joint checks or direct payments to the unpaid subcontractors.  The owner should make certain the final affidavit reflects the status of all subcontractors who timely served a Notice to Owner.

 

  1. Conclusion: Whether building a new home, or renovating an existing one, homeowners confront many challenges, from selecting the contractor, ensuring the improvements received are the ones they intended, to making certain that the money paid for  the desired improvements is properly allocated to all those involved in the construction project to avoid construction liens.  Florida’s construction lien laws are complex, and even the safeguards discussed above involve strict compliance with mandated forms, required means of giving notices and designated time periods.  By receiving competent legal advice in advance, a homeowner increases the likelihood of a successful home improvement project by hiring a properly licensed contractor, ensuring the contract is properly and sufficiently drafted, and properly and timely complying with Florida’s construction lien laws.

If you have any questions concerning the verification of a contractor’s license, or need legal guidance to safely navigate a home improvement project, at Bob Bible Law, we have the knowledge and over 30 years of experience to guide you through these issues.


For more information, contact Robert W. Bible, Jr., Attorney At Law at 727/538-7739 (office), 727/710-5166 (cell) or by email at: b.bible@BobBibleLaw.com