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Does a lien need to be placed on all units in a condo association or just on the association when the board signed our contract?

FloridaMechanics Lien

Our office did a job for a 72 unit condo association in FL. We have a contract with the association to cover the equipment that we placed. NO construction/repair work was done. We only placed drying equipment. Would we need to place a lien on each individual unit or would we place it on the association as a whole? Will not having a contract with individual unit owners be an issue? Every unit had equipment in it, but for varying lengths of time. Our billing is to the association as a whole.

1 reply

Apr 2, 2019

That's a good question. When dealing with condominiums and condominium associations, there's often no black or white answer, and issues can get complex - so bear with me. First, it's worth analyzing whether the right to lien would ultimately be available for the work that was performed. Then, let's look at liens and condos/condo associations. Lien rights are broadly available in Florida. Under § 713.05 of the Florida mechanics lien statute, lien rights exist to secure money owed for "labor, services, materials, or other items", and they're specifically available for materialmen (which, in Florida, includes those who rent equipment). But, to give rise to lien rights, the equipment must improve the property. In Florida "improve" means "build, erect, place, make, alter, remove, repair, or demolish any improvement ... or furnish materials for any of these purposes, or perform any labor or services upon the improvements..." (emphasis added). So, it seems that if equipment is provided at an improvement which alters, removes, or repairs the property in such a way that the property might be considered "improved" (or permanently changed for the better), then lien rights would arise. Anyway, as for liens on condominiums... In Florida, generally, in order to place a mechanics lien on an individual condominium unit, a lienor would need to perform work with the owner of the unit "expressly consenting to or requesting the labor or materials". But, in a situation where access is granted to every single unit in order to improve the unit, there's likely a fair presumption that the condominium association was given proper authority by each unitholder to authorize the work. If that's the case, mechanics liens against units where work was performed might be appropriate. Based on the Florida Statutes relating to condominium improvements, the only time a condominium property - as a whole - may be liened is with the unanimous consent of the unit owners. So, filing a lien against the condominium as a whole will very typically not be an option. At the same time, there are limitations for filing one lien against multiple properties. Under the Florida Statutes relating to condominium improvements (specifically, 718.121(b)), one lien can be filed against all unitholders when work is done on common areas (and authorized by the condo association). But that section is silent as to when work is done to every unit. The Florida mechanics lien statute might provide a little clarity on that front. Based on 713.09 of the Florida mechanics lien statute, a lienor may file one claim of lien against multiple parcels when work was done on those parcels when the "owner" under the direct contract is the same person for all lots, parcels, or tracts of land against which a single claim of lien is recorded. On first blush, this seems to indicate that where there are multiple, separate owners for individual units - then one claim against multiple units could not be made. There is some argument, though, that a condo association might be considered an "owner" though, at least under the Florida mechanics lien statute. § 713.01(23) of the Florida lien statute defines an owner as "a person who is the owner of any legal or equitable interest in real property, which interest can be sold by legal process, and who enters into a contract for the improvement of the real property. The term includes a condominium association pursuant to chapter 718 as to improvements made to association property or common elements." So, there's a chance that a condominium association might be considered an owner, and therefore one lien might be filed against multiple, separate parcels. At the same time, because the term "owner" explicitly includes a condominium association for improvements to common areas, there's probably also an argument that a condominium association might not be considered an "owner" for improvements done to individual units. In such a case, liens might have to be made against individual units. Because there are so many moving parts when liens are filed against condominium properties, it's often a good idea to first consult a local construction or real estate attorney - they'll be able to thoroughly review all documentation and information relevant to the claim at hand, and they can provide advice on how best to proceed. For more information on Florida mechanics liens, this resource might help: Florida Lien and Notice Overview.

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