Florida House Bill 345 —which proposes sweeping changes to Florida’s current lien laws — is currently making its way through the Florida House of Representatives.
Although this bill is still in its early stages, it’s never too early to consider how your processes may change if this bill is signed into law. Here’s a quick summary of the more significant changes proposed by FL HB-345.
UPDATE: As of March 12, 2022, this bill has been removed from consideration for the 2022 Regular Session.
What to know about Florida House Bill 345
A new bill was introduced into the Florida House of Representatives for the 2022 Regular Session. If enacted, would make some sweeping changes to Florida’s mechanics lien laws. As of the date of this article, the bill is still in the House and under consideration by the Civil Justice & Property Rights Subcommittee.
There’s still a long path ahead, and there’s no telling if/when this bill will be passed. But let’s take a look at some of the more significant changes that would be made if HB-345 is enacted.
- Title: HB-345: Revisions to lien and bond laws
- Introduced by: Rep. Tobin Rogers “Toby” Overdorf
- Date introduced: October 19, 2021
- Effective date (if passed): July 1, 2022
First and foremost, the proposed legislation will tweak some of the current definitions and add a new term to Fla. Stat. §713.01.
Clerk’s office: Expanded to include “or another office serving as the county recorder as provided by law.”
Contractor: Expanded to include “licensed GCs or building contractors who provide construction management services, which include scheduling and coordinating both preconstruction and construction phases for the successful, timely, and economical completion of the construction project or who provides program management services, which include schedule control, cost control, and coordinate in providing or procuring planning, design, and construction.”
Final furnishing: Expanded to establish a clear-cut final furnishing date for specially fabricated material suppliers. Final furnishing will be the date that the last portion of the specially fabricated materials is delivered to the site of the improvement, or if any portion of the specially fabricated material is not delivered to the site of the improvement by no fault of the lienor, the term means whichever of the following is later:
- 9 months after the date the lienor completes fabrication
- 9 months after the date the lienor receives the last portion of the specially fabricated materials needed to complete the order
- The date the notice of commencement expires
(NEW) Finance charges: This term has been added to the definitions section, and defines finance charges as, “A new contractually specified additional amount to be paid by the obligor on any unpaid balance if the obligor fails to pay the entire principal amount to the obligee by the due date set forth in the credit agreement or other contract.”
This is a pretty exciting proposed change to Florida’s lien laws, a concrete explanation of how notice and lien deadlines are calculated. Including when there is a declared state of emergency; such as hurricanes. This will add a new section, Fla. Stat. §713.011.
- If the last day of a time period is a Saturday, Sunday, legal holiday, or any other day observed as a holiday by the clerk’s office, the time period is extended to the next business day.
- During a declared state of emergency in which the clerk’s office is closed or not accessible, any time periods imposed under this part are tolled. Upon the expiration of the declared state of emergency, the number of days that were remaining for any specified time period under this part on the first day of the declared state of emergency shall commence on the first business day after the end of the declared state of emergency.
- Lastly, a federal, state, or local government order closing the clerk’s office for any reason, will be deemed a state of emergency for the purposes of calculating deadlines.
Single lien claims and the extent of liens
One significant change comes to Fla. Stat. §713.09, which now clarifies that claimants may file a single claim of lien when working under multiple direct contracts, as long as the owner is the same person for all lots, parcels, or tracts of land which the claims if intended to be recorded against.
Another change to the lien filing process is a new section added under Fla. Stat. §713.10. This new section solidifies the notion that a project contracted by a lessor who is leasing a mobile home lot in a mobile home park is not subject to a mechanics lien.
Notice of Commencement changes
The first proposed change to the Florida Notice of Commencement (NOC) comes in the form of the actual information required under Fla. Stat. §713.13. If the project is a tenant improvement, then both the owner and the tenant who contracted the improvements must be included in the NOC.
Also, a certified copy of the NOC would no longer be the sole method of proving the notice was filed at the building department under Fla. Stat. §713.135. Building departments under these new changes would also accept either a notarized statement that the notice was recorded or a copy of the clerk’s office official records showing book and page numbers.
Serving a Notice of Termination
Under the new legislation, Fla. Stat. §713.132 would require the property owners to serve the Notice of Termination not only on direct contractors and potential lienors who served a timely Notice to Owner prior to filing, but also on any potential lien claimants who timely served a Notice to Owner after the notice had been recorded as well. Also, a Notice of Termination would not be able to be filed until after all lienors have been paid in full or pro-rata in accordance with §713.06(4).
Discharge of lien
There are two potential changes under Fla. Stat. §713.21. The first would result in the Florida lien laws officially recognizing partial lien releases. Furthermore, all lien releases will be required to be 1. notarized, and 2. include the official reference numbers and recording date of the lien to be released.
Lastly, under this new legislation, the amount required under Fla. Stat. §713.24 to bond-off a lien claim will increase. Currently, the amount required is 3 years of statutory interest plus $1,000 or 25% of the lien amount, whichever is greater. The new amount to bond off a claim would be three years of statutory interest plus 50% of the lien amount. Also, the new laws would clarify that attorney fees will also be available to the prevailing party in an action to enforce a lien claim against a bond.