Contractors sometimes have a hard time getting paid for construction work done at a home or other property. As a remedy, generally, a contractor can file a construction lien against the property until the debt by the property owner has been paid. You can find information on how and when a construction lien can be filed here.
Construction liens protect a contractor or subcontractor from the risk of not getting paid by a property owner. As explained more fully in our blog on construction liens, a construction lien may not be filed after the 90-day statutory window. You might be wondering: what remedy does a contractor have if he/she misses the deadline or otherwise fails to properly file a construction lien and a homeowner refuses to pay? Under certain circumstances, a contractor may have a right to impose an equitable claim of lien upon real property.
A common scenario where an equitable lien may apply is where a customer continually promises the contractor that he/she will pay the contractor for construction work performed but ultimately fails or refuses to pay the final balance after the 90-day lien window has expired. A customer may even make partial payments in order to lull a contractor into believing he/she will pay the final balance. In that scenario, the contractor may be entitled an equitable claim of lien.
Equitable liens arise from two sources:
(a) a written contract which shows an intention to charge some particular property with a debt or obligation, and
(b) when declared by a court of equity out of general considerations of right and justice as applied to the relations of the parties and the circumstances of their dealings in the particular case.
Where a contractor supplies labor, materials, or equipment in the improvement of real estate, filing an equitable claim of lien upon the improved property as security for payment may be appropriate. The fact that a contractor may have a legal claim through construction or mechanic’s lien law does not preclude that contractor from seeking equitable relief by using the improved property as security for payment of the amount owed him. The Court will examine the facts of each case and determine whether it would be equitable (or fair) to impose a lien upon the property for the unpaid balance.
In the example above, the Court may consider whether the homeowner intentionally led the contractor to believe he/she would pay the final balance in order to prevent the contractor from timely filing his lien and thus, allowing the homeowner to avoid his obligation to pay the final balance. In such a case, the Court may impose an equitable claim of lien as a matter of fairness to the contractor who relied in good faith upon the false representations of the homeowner.
An equitable claim of lien may be an option for a contractor who has missed the filing deadline for a construction lien. Determining whether an equitable claim of lien is appropriate in a particular case requires a careful analysis. The attorneys at Boatman Ricci have experience representing both contractors and homeowners. If you have a question regarding your rights under Florida Law and whether an equitable lien applies to your situation, contact Boatman Ricci for assistance at 239-330-1494.
. Jones v. Carpenter, 90 Fla. 407, 106 So. 127 (1925)
. Tucker v. Prevatt Builders, Inc., 116 So.2d 437 at 440 (1959).
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