Florida law permits contractors, subcontractors, or construction service providers who have not been paid for work done on a property to file a claim against the owner. What happens if the property is under a lease? Is it possible to file a lien against leased property? Keep reading to find out.
Is it Possible to Lien a Leased Property? – An Introduction
There is a misconception that it is not possible to lien a leased property. Under Florida law, if a contractor, subcontractor, material supplier, or any potential lienor is not paid for work or materials provided to improve a leased property, they can file a lien against it.
The first step is to identify which party signed a contract with the contractor, subcontractor, or any other potential lienor.
For example, if you are a general contractor working to improve one of the premises in a commercial building, you must identify whether you signed a contract with the landlord or the tenant.
If a landlord (person holding title of the improved property) signs a contract with a contractor and the contract is not paid in full, the injured party has lien rights against the property “as a whole.”
If the contract was signed with a tenant, the situation is more complex. In Florida, lien rights generally attach only to the interest of the party who failed to fulfill a contract with the general contractor.
In such cases, the lienor (person holding the lien) will not be able to force the sale of the property to get paid. If the lien is against the tenant, the lienor’s rights only attach to the lease.
It is fundamental for potential lienors to check the local public records in the county where the property is located to identify the accurate interest of the contracting party.
Does the Lease Contract Have No-Lien Language? – Attention to Detail
Depending on how the lease agreement is structured, the landlord may insert specific language in the document to prohibit the attachment of liens against the property.
If a lienor attaches a lien against the tenant’s interest in the property but the lease agreement includes no-lien language, the lien attaches only to the lease.
Florida Statutes §713.10 (2)(a) specifies that the landlord’s property is exempt if the lease “expressly prohibits liens and a notice of the same has been recorded in the official records of the county which the parcel of land is located before the recording of notice of commencement and the notice includes:
- The name of the lessor
- The legal description of the parcel
- The specific “no-lien” language contained in the lease
- A statement that all or a majority of the leases expressly prohibit such liability”
How Do You File a Construction Lien on a Leased Property in Florida? – A Realistic Overview
Enforcing a lien on a leased property depends on a set of different steps before and after the contract’s signature. Before the contract is signed, potential lienors must identify which party signed the contract.
Subcontractors, sub-subcontractors, and material suppliers generally do not communicate with the contracting party, but they can ask the general contractor to provide accurate information about the person who signed the contract.
The next step is to check the public records to confirm the true owner of the property and identify whether the lease agreement has a “no-lien” provision.