How to confirm what a particular subcontractor (or sub-subcontractor)’s lien rights are? And if they filed a NTO?

2 weeks ago

I’m a GC. We had to fire a particular sub contractor for not performing. Not completing work and poor quality. We have proof, emails photos sent etc. I’m wondering what the proper protocol is for firing a subcontractor?

We also believe that he may owe some of his sub-subcontractors money as well. How do I confirm what our prime subcontractors and his sub subcontractors lien rights are? And if they filed a Notice to Owner? I know that typically we as the GC are supposed to receive copies but I haven’t received anything. I actually have a lien waiver from him for his last payment which is a final lien wiaver.

Thanks,
Jim

Chief Legal Officer Levelset
52 reviews

The ability of a contractor to terminate a subcontractor is generally outlined in the contract between the parties. Most contracts provide steps that must be taken in order to terminate a contract for non-performance or other breach.

Florida preliminary notice requirements specifically require that the preliminary notice must be delivered to not only the property owner (or owner designee), but also the GC and other parties “up the contracting chain” from the potential lien claimant in certain circumstances.

Florida § 713.06 states, in part, that: “All lienors under this section, except laborers, as a prerequisite to perfecting a lien under this chapter and recording a claim of lien, must serve a notice on the owner . . . A sub-subcontractor or a materialman to a subcontractor must serve a copy of the notice on the contractor as a prerequisite to perfecting a lien under this chapter and recording a claim of lien.” [emphasis added]

Accordingly, sub-subs and suppliers to sub must provide a notice to the GC in order to retain lien rights. If the notice is not provided, there can be no valid lien claimed by a sub-sub or supplier to a sub.

With respect to a first-tier subcontractor directly, it is best practice to send the notice to the GC, but it is not a specific requirement. However, a validly executed lien waiver is a bar to any later lien claim to the extent the waiver is final and unconditional.

The fact that a lien waiver has been provided doesn’t necessarily mean that the party won’t be able to file a mechanics lien as a practical matter, however. Recorders do not act as gate-keepers to bar the filing of liens that may not ultimately be valid. It may be the case that an invalid lien can be filed, and then later challenged and discharged.

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