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Owner threatened with real estate lien for new business referral fee from unlicensed lienor unpaid by general contractor

Florida

I had some renovation done at my home. I was referred to a general contractor by a party that explained that he would get a referral fee from any contractor that he referred to me, since he was bring them new business. I had not problem with that arrangement, provided that the referral was a valid one with a licensed contractor and the fee did not increase my cost, since the contractor would pay it. I was not aware of the terms of the referral fee, since I was not involved. Two months into the project, the contractor did not finish the project and I had overpaid the contract amount. The contractor never paid a referral fee. I then received an email from the unlicensed source of the referral citing his marketing company and demanding a 7.5% commission ( around $3,000) on the entire contract price from me, threatening to put liens on my property. I was surprised since I had never agreed to my payment of a referral fee, did not sign anything in writing agreeing to such fee, and had never heard of his company before. Despite his assurances, the contractor may not be properly licensed and I have had to spend additional moneys to correct his work. Question: Am I liable for this referral fee under Florida law, without an explicit contract, merely because I used the general contractor? Question: Would a referral fee qualify as a mechanics lien, even though only the referral was provided, no construction labor or materials? Question: Should I be retaining legal counsel now, given the threat, or wait for a lien notice?

1 reply

Jul 15, 2020
Mechanics lien rights are not available for referral fees. Mechanics liens can only be filed when work is done which permanently improves property. Someone who has nothing to do with the actual work being done won't have lien rights, and a referral, itself, provides no improvement to the property. Further, taking a person's suggestion about what contractor to use does not bind you to paying above your contract price. And, their agreement with the contractor does not make you liable for the contractor's debt to the party making the referral. With that being said, it's possible a bad actor could try and file a mechanics lien claim even if they have no valid right to do so. But, threatening legal claims if they proceed with a lien and letting them know you understand your rights could go a long way toward forcing them to stand down. In Florida, filing a fraudulent lien can result in an owner being awarded damages and attorney fees, plus the party filing the fraudulent lien is committing a third degree felony. So, letting the would-be lien claimant know that you understand your rights, and letting them know the consequences of their actions could help force them to leave the issue alone. As for whether it's time to consult a lawyer - that's up to your disgression. Having an attorney by your side could be really helpful when fending off a lien, but if the threat of a lien isn't imminent - then you may be able to get by without one. If you're looking for a Florida lawyer, here's a good place to start: Find a Florida Construction Lawyer. Finally, the following articles should be useful: (1) I Just Received a Notice of Intent to Lien – What Should I Do Now?; and (2) A Mechanics Lien Was Filed on My Property – What Do I Do Now?
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