Except for certain exempt improvements,[1] the recording of a notice of commencement must precede the commencement of construction to improve real property. See Edwin Taylor Corporation v. Mortgage Electronic Registration Sys., Inc., 311 So. 3d 139 (Fla. 2d DCA 2020). The notice of commencement itself serves two purposes. First, it serves to protect the owner by providing a trigger date for when the statute of limitations begins to run. Edwin Taylor Corporation, 311 So. 3d 139, 142 (citing Design Aluminum, Inc. v. DeSanti, 521 So. 2d 285, 287 (Fla. 2d DCA 1988). Second, it serves to provide a lienor with the necessary information for purposes of serving the required notice to owner under Fla. Stat. § 713.06(2)(a), thereby perfecting the lien. Id. at 142.
It is important to point out that a Notice of Commencement is not a perfected lien. Rather, it serves as a “roadmap” for a lienor to provide all the necessary information required should a lien be filed under Fla. Stat. 713.06(2)(a). Although the statute itself provides that the recording of a notice of commencement does not constitute a lien, cloud, or encumbrance on real property, the notice of commencement still provides constructive notice that claim(s) of lien may be recorded and may take priority over subsequently recorded interests as provided under Fla. Stat. §713.07. Timely recording of a claim of lien relates back to the recording of the notice of commencement for purposes of a lien’s attachment to title to real property. See Fla. Stat. §713.07(2).
Substantial Compliance Instead of Strict Compliance
Fla. Stat. §713.13 sets forth the laundry list of statutory requirements needed for a Notice of Commencement. It is always best practice to ensure that one does their best to comply with statutory requirements of Florida’s construction lien law, because in general, given that construction liens are creatures of statute, they must be strictly construed. Stock Bldg. Supply of Fla., Inc. v. Soares Da Costa Constr. Servs., 76 So. 3d 313, 316 (Fla. 3d DCA 2011) (“Construction liens are purely creatures of statute and must be strictly construed”). However, interestingly, in Florida, substantial compliance is all that is required to satisfy both notice’s purposes. Sasso Air Conditioning, Inc. v. United States Lending Corp., 742 So. 2d 468, 470-71 (Fla. 4th DCA 1999) (holding that a notice of commencement signed by a single spouse was sufficient to comply with the statutory requirements overseeing notice of commencements) (emphasis added). Specifically, Florida Courts interpret that the burden of ensuring that the notice of commencement is accurate falls upon the owner of the real property; and “the risk of any errors in the Notice of Commencement [falls] squarely on the shoulders of the owners” Edwin Taylor Corporation v. Mortgage Electronic Registration Sys., Inc., 311 So. 3d 139, 142 (Fla. 2d DCA 2020) (finding that a notice of commencement, not signed by the owner, but instead signed by the general contractor with the owners authority, is not a nullity, per se, in a lien foreclosure action brought by subcontractor where the subcontractor strictly complied with construction lien statute); See, further, Design Aluminum, Inc. v. Desanti, 521 So. 2d 285, 287 (Fla.2d DCA 1988) (holding that the lienor does not have a duty to ensure that a notice of commencement properly has the correct information).
This departure from the standard ‘strict’ compliance language is because our construction lien laws are designed “to protect those whose materials, labor and skills improve the land of others by providing a plan by which such persons or firms may receive their fair share of moneys payable by the owner to the general contractor”. Crane Co. v. Fine, 221 So. 2d 145, 152 (Fla. 1969). They are not meant to be “sympathetic to those seeking affirmative relief unless the party strictly complies with the provisions under the laws.” Edwin Taylor Corporation v. Mortgage Electronic Registration Sys., Inc., 311 So. 3d 139, 142 (one exception to such a rule being where the party against who the lien is sought is not adversely affected, and even then, the party seeking affirmative relief must have substantially complied with the statutory provisions).
Nevertheless, the standard here is still substantial compliance. So, while our Courts are willing to forgive some deviations from strict compliance with the construction lien law as it relates to the notice of commencement[2] – one should still make a best effort to ensure its compliance with Florida’s construction lien law. Perhaps the most extreme example would be ensuring that the notice of commencement is properly recorded with the Clerk of Court’s Official Records, as required under Fla. Stat. §713.13. If a notice of commencement is not be filed, a potential lienor may not enjoy the same lien priority it would have should a notice of commencement been filed.
Specifically, the lien’s priority would not relate back to the notice of commencement. Rather, the lien itself becomes effective at the date of filing of the claim of lien. See Fla. Stat. §713.07(2). Lien priority could have drastic impact on the enforceability of the lien given third parties, such as mortgagees or subsequent purchasers, would otherwise not be on constructive notice of a possible construction lien. See, e.g., Page Heating & Cooling, Inc. v. Goldmar Homes, Inc., 338 So. 2d 265 (Fla. 1st DCA 1976) (holding that new purchasers of property did not take subject to claim of lien filed pursuant to a heating and air installation contract with prior owner given that new purchasers’ deed was recorded prior to the claim of lien, and no notice of commencement was filed).
In sum, before engaging in construction projects in Florida (subject to certain exceptions), contractors should look to ensure that there is a notice of commencement filed to protect lien priority. Furthermore, contractors should ensure that the notice of commencement substantially complies with the provisions of Fla. Stat. §713.13 and is executed (and notarized) by the owners[3] of the real property and properly recorded with the Clerk of Court’s Official Records for the county in which the real property is located. If you have any questions regarding construction lien law, or sufficiency of Notices of Commencement, please do not hesitate to reach out to our Construction team here at Taylor, Day, Grimm & Boyd.
Other Important Dates to Consider Regarding the Notice of Commencement
- A Notice of Commencement is to be recorded with the Clerk of Court’s Official Records for the County in which the real property is situated and is otherwise void if such work is not actually commenced within 90 days after recording. Fla. Stat. §713.13(2).
- Unless it expressly states otherwise, the notice of commencement expires one (1) year after the date of recording. See Fla. Stat. §713.13.
[1] Fla. Stat. §713.02(5) provides an exemption to the Notice of Commencement requirement for any improvement for which the direct contract price is $2,500 or less. It also does not apply to lienors, regardless of privity, as it relates to certain subdivision improvements. See, generally, Fla. Stat. §713.04. It also does not apply to liens for professional services outlined in Fla. Stat. §713.03.
[2] Sasso Air Conditioning, Inc. v. United States Lending Corp., 742 So. 2d 468, 470-71 (Fla. 4th DCA 1999) (holding that a notice of commencement signed by a single spouse was sufficient to comply with the statutory requirements overseeing notice of commencements); Edwin Taylor Corporation v. Mortgage Electronic Registration Sys., Inc., 311 So. 3d 139, 142 (Fla. 2d DCA 2020) (finding that a notice of commencement, not signed by the owner, but instead signed by the general contractor with the owners authority, is not a nullity, per se, in a lien foreclosure action brought by subcontractor where the subcontractor strictly complied with construction lien statute).
[3] For purposes of Florida’s construction lien law, an “owner” extends to a person who has 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 condominium associations pursuant to chapter 718 as to improvements made to association property or common elements. The term does not include any political subdivision, agency, or department of the state, a municipality, or other governmental entity. Fla. Stat. §713.01(24).