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CAUTION TO GENERAL CONTRACTORS – FINAL PAYMENT AFFIDAVITS AND NOTICES OF CONTEST OF LIENBruce E. Loren, Esq. and Kyle W. Ohlenschlaeger, Esq. | Apr 02 2018

We recently prevailed at trial where we defended an owner against a construction lien foreclosure claim brought by a general contractor. Our defense was based upon the general contractor’s failure to timely provide a contractor’s final payment affidavit to the owner. The time for the general contractor to furnish the affidavit had been shortened by the owner’s recording of a Notice of Contest of Lien. The outcome of the case serves as a reminder to general contractors of their responsibilities with respect to both final payment affidavits and notices of contests of lien. Even armed with the information below, because of pitfalls notices of contest of lien create, we recommend that any contractor (general or sub) contact an attorney as soon as they discover that an owner has filed a notice of contest of the contractor’s lien.

1. The Contractor’s Final Payment Affidavit.

Contractors in direct contract with an owner must deliver a final payment affidavit to the owner at least 5 days prior to filing a lawsuit to foreclose a construction lien. The affidavit should be in the following form:


CONTRACTOR’S FINAL PAYMENT AFFIDAVIT

STATE OF FLORIDA
COUNTY OF ______________

Before me, the undersigned authority, personally appeared ____(name)__________, who, after being duly sworn, deposes and says of his personal knowledge the following:

1. He is the (Title) of (General Contractor) , which does business in the State of Florida, hereinafter referred to as the “Contractor.”

2. Contractor, pursuant to a contract with (Owner) (“Owner”) has furnished or caused to be furnished labor, materials, and services for the construction of certain improvements to property as more particularly set in forth in said contract.

3. This affidavit is executed by the Contractor in accordance with section 713.06 of the Florida Statutes for the purposes of obtaining final payment in the amount of $(Amount Due) .

4. All work to be performed under the contract has been fully completed, and all lienors under the direct contract have been paid in full, except the following listed lienors:

NAME OF LIENORS AMOUNT DUE

2. Effect of a Notice of Contest of Lien on a Contractor’s Final Payment Affidavit.

Generally, a construction lien is valid for one year from the date it is recorded in the public records. An owner can shorten that time by recording a Notice of Contest of Lien. Upon filing a Notice of Contest of Lien, a contractor must file a lawsuit to enforce the lien within 60 days.


In our recent case, the general contractor recorded a construction lien and the owner recorded a Notice of Contest of Lien shortly thereafter. The general contractor, recognizing that its time to file suit had been shortened, filed a complaint to foreclose its lien within 60 days of the Notice of Contest of Lien. However, the contractor failed to deliver a contractor’s final payment affidavit to the owner. After the Owner defended the case on this basis, the contractor actually delivered a final payment affidavit; however, the delivery of the final payment affidavit was more than 60 days after the owner recorded the Notice of Contest of Lien.


The general contractor argued that because it had timely filed its lawsuit, and later cured its failure to deliver the final payment affidavit, that it should prevail on its lien foreclosure claim. However, the Court agreed with our position that a lien foreclosure claim must fail where a general contractor fails to deliver a final payment affidavit within 60 days of a Notice of Contest of Lien. Not only did this result in the general contractor’s lien foreclosure claim being rejected, but the owner now has a claim against the general contractor for his attorneys’ fees.

3. Other Notice of Contest of Lien Issues.

Although not an issue in our case, we are aware of another case where an owner was able to overcome a construction lien through the use of a Notice of Contest of Lien. In that case, after the owner failed to pay the contractor for improvements to her home, the contractor recorded a lien and filed suit to foreclose. After the lien foreclosure suit had been filed, the owner transferred the lien to a bond and then recorded a Notice of Contest of Lien. More than 60 days after the Notice of Contest was recorded, the general contractor attempted to amend its complaint to sue on the transfer bond instead of the lien. Ultimately, the court found that the general contractor’s failure to amend its claim to proceed against the lien transfer bond within 60 days was fatal to its lien claims against the owner. Once again, under these circumstances the owner may have had a right to recover her attorneys’ fees from the general contractor.

As you can see from the above, the Notice of Contest of Lien is a powerful tool that owners can use against contractors that have recorded a lien against their property. Because of the complex nature of the law, we recommend that contractors consult with an attorney whenever they receive a Notice of Contest of Lien.

Bruce E. Loren and Kyle W. Ohlenschlaeger of the Loren & Kean Law Firm are based in Palm Beach Gardens and Fort Lauderdale. Loren & Kean Law is a boutique law firm concentrating in construction law, employment law, and complex commercial litigation. Mr. Ohlenschlaeger focuses his practice on construction law and a wide range of commercial litigation disputes. Mr. Loren has achieved the title of “Certified in Construction Law” by the Florida Bar, exemplifying the Bar’s recognition of this expertise. The firm’s construction clients include owners/developers, general contractors, specialty contractors in every trade, suppliers and professional architects and engineers. Mr. Loren and Mr. Ohlenschlaeger can be reached at bloren@lorenkeanlaw.com or kohlenschlaeger@lorenkeanlaw.com or 561-615-5701.