We're about to start work on a construction job in Florida. The work being done is tenant improvements. Who needs to be listed on the notice of commencement as the "owner"? The actual property owner, or the tenant in charge of the work?
Jun 20, 2019
This is a great question, and how it's answered can have significant impact on the project and the payment protections available to construction participants.
In order to determine who qualifies as the "owner" for these purposes, we can first look to Florida's own definition of "owner" in § 713.01(23) of Florida's construction lien law. This section specifically 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."
A tenant of property holds a leasehold interest in the property, which is a "legal interest in real property that can be sold by legal process." Accordingly, for an improvement contracted for by a tenant, that tenant is the “owner” with respect to the project and should be listed (and sign) as such on the notice of commencement.
This is further supported by the requirement that, in addition to the name and address of the "owner" in the notice of commencement, it is also required to list both 1) the "owner's interest in the site of the improvement" and 2) "the name and address of the fee simple titleholder, if other than such owner." And, providing even more support is the fact that a mechanics lien in Florida is specifically limited to "the right, title, and interest of the person who contracts for the improvements."
Despite this fairly universal interpretation, some Florida municipalities have taken the position that the fee simple owner should be listed as "owner" on a notice of commencement with respect to a tenant improvement, and not just the "holder of the fee simple interest." This is incorrect, and can open the property owner up to losing the safe harbor protections contained in the Florida construction lien law, and end up with a claimant's lien be valid against the underlying property itself, rather than just the leasehold interest.