I am finishing building a home as Homebuilder/GC on a home that is on buyers lot. He has a CP loan but owes me 24K in extras and I don’t think he is going to pay and just move in. What are my options?

6 months ago

$24,000 in extras due and buyer is trying to move in with out paying

Senior Legal Associate Levelset

That’s a good question, and I’m sorry to hear about that. When payment is owed but unpaid for construction work, there a number of potential tools for recovering payment. For one, mechanics liens are incredibly powerful and can force the hand of a nonpaying owner. Liens are so powerful that the mere threat of a lien filing can be enough to compel payment. This is especially true where a construction lender is also present on the job – when they receive a threat of lien, they know their investment is in jeopardy. That fear will often help to put additional pressure on a nonpaying property owner, which can often lead to payment. What’s more, a mechanics lien filing could even put an owner in breach of the terms of their loan agreement. Considering the implications of a mechanics lien filing, sending a Notice of Intent to Lien to warn both the owner and the lender that a lien claim will soon be filed unless payment is made could go a long way toward forcing payment. Naturally, if warnings don’t work, actually filing a mechanics lien is an option – and even when a lien must be filed, most liens don’t require legal action. Of course, note that mechanics liens have strict notice and deadline requirements, and if the specific steps aren’t taken to preserve the right to lien, actually filing a lien could result in an invalid or unenforceable mechanics lien. Still – regardless of whether a valid or enforceable lien could be filed, the threat of lien (via document like Notice of Intent to Lien) could work to force payment. Outside of leveraging mechanics lien rights, there are also other tools that could help a Florida contractor recover payment. For one, Florida’s prompt payment laws mandate that payments be made under a certain timeframe – and if payment isn’t made, then the party owing payment could be subject to serious financial penalty. You can learn more about Florida’s prompt payment laws here: Florida Prompt Payment FAQs. Further, other legal options – like potentially making a claim under breach of contract or unjust enrichment, or some other claim that may be available – could be effective to force payment. Plus, much like a mechanics lien, the mere threat of legal action (typically, via demand letter issued by an attorney) is often enough to get the payment dispute talks rolling without the actual need for a legal filing. Of course, consulting a local construction attorney would be wise before deciding to make some legal claim – they’ll be able to review your circumstances and documentation and advise on how best to proceed.

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