Construction liens, and the clock that runs backwards

Listen instead

The same material, read aloud and told more loosely than it is written. Nothing is said in it that this page does not also say.

That same recording, with the writing lit line by line as it plays and the sections listed beside it, is on its own page.

The notice of commencement is the document that matters

Fla. Stat. 713.13¹ requires an owner to record a notice of commencement before actually commencing to improve real property, and to post a copy on the site.

It is a full document rather than a stub. The statutory form carries the legal description, the street address and the tax folio number, a general description of the improvement, the owner and the fee simple titleholder, the contractor with a telephone number, the surety and the amount of any payment bond, and the lender.

It also carries an expiry. The form states that the expiration date will be one year after recording unless a different date is specified, and the warning printed on it tells the owner that payments made after expiry are improper payments that can result in paying twice.

For a searcher, that is a dated, indexed, self-describing record of a construction project on a parcel, filed before any lien exists. It is the earliest warning the register gives.

Priority runs from the notice, not from the claim

Fla. Stat. 713.07² splits the answer in two, and subsection (2) is the one that surprises people.

Under subsection (1), liens under sections 713.03 and 713.04 attach at the time the claim of lien is recorded and take priority as of that time. That is the ordinary rule, and it behaves like everything else in the register.

Under subsection (2), liens under sections 713.05 and 713.06, which are the contractor and the subcontractor, attach and take priority as of the time the notice of commencement was recorded. Only where no notice of commencement was filed do they fall back to the date of the claim of lien.

Subsection (3) states the cut. Those liens have priority over any conveyance, encumbrance or demand not recorded before the lien attached, while anything recorded before it attached, and any proceeds of that thing regardless of when disbursed, keeps its place ahead.

So the question a judgment creditor has to ask about a parcel under construction is not when the claim of lien was recorded. It is when the notice of commencement was.

New York files a notice of lien, and ranks them on a parity

New York has no notice of commencement, and its priority rule is written from the other end.

Lien Law 10³ gives the window for filing: at any time during the progress of the work, or within eight months after completion of the contract, and within four months where the improvement is to a single family dwelling.

Lien Law 13(1)⁴ then gives a filed lien priority over a conveyance, mortgage, judgment or other claim not recorded, docketed or filed at the time the notice of lien was filed, over advances made on a mortgage after that filing, and over a money judgment recovered on a claim which was not for materials furnished, labor performed or moneys advanced for the improvement. A judgment creditor whose claim has nothing to do with the building is named in the statute as the party who loses.

The same subsection then removes the rule a searcher expects. Persons have no priority on account of the time of filing their respective notices of lien, and all such liens are on a parity, except that laborers for daily or weekly wages have preference over every other claimant. Three mechanics liens filed in three different years do not rank in that order. They share.

Lien Law 13(5) reaches the deeds. An instrument of conveyance recorded after the improvement commenced is not valid as against liens filed within a corresponding period, unless it contains a covenant by the grantor to hold the consideration as a trust fund and apply it first to the cost of the improvement.

One year, and what the register shows after it

Both states give a construction lien one year, and both make the continuation visible in the register rather than leaving it to be assumed.

Under Fla. Stat. 713.22(1)⁵, a lien does not continue longer than one year after the claim of lien was recorded, unless an action to enforce it is commenced within that time. The sentence after it is the one worth reading twice. A lien continued beyond the year by the commencement of an action is not enforceable against creditors or subsequent purchasers for value and without notice, unless a notice of lis pendens is recorded.

Lien Law 17⁶ works the same way from the other direction. No lien continues for longer than one year after the notice of lien was filed, unless within that time an action is commenced to foreclose it and a notice of pendency of that action is filed with the county clerk.

That makes the pair readable. A claim of lien more than a year old, with no lis pendens behind it in the same index, is not a claim that is merely stale. Against a creditor, it is a claim that has stopped.

The notice of contest, and the 60 days it starts

Fla. Stat. 713.22(2) lets the owner shorten the year to two months, using a recorded instrument and the clerk.

An owner or the owner's attorney may record a notice of contest of lien. The statutory form tells the lienor that the time within which suit may be filed is limited to 60 days from the date of service of the notice, and the statute states the consequence plainly: a lienor who fails to institute a suit within those 60 days has a lien extinguished automatically.

The clerk serves it at the address shown in the claim of lien or its most recent amendment, certifies the service and the date on the face of the notice, and records it. So the notice, the service and the date are all in the same public index the lien is in.

A notice of contest recorded more than 60 days ago, with nothing filed after it, is the register saying that a lien which still appears in the index is gone.

How to read one off a register

Four things to pull, in an order that answers the priority question before the amount question.

Search the parcel for a notice of commencement first, and read its recording date and its stated expiry. In Florida that date, not the lien date, is where the contractor and subcontractor liens sit in the queue.

Then find every claim of lien against the parcel and compare each recording date against the docketing date of the judgment. In New York compare against the filing date of the notice of lien instead, and do not assume the liens rank among themselves in that order.

Then check each lien more than a year old for a lis pendens or a notice of pendency filed in the same index. Absence of one is the readable fact, and it points one way.

Then search for a notice of contest of lien, which is a document the owner records and which runs 60 days from service rather than from recording.

What this does not cover

Whether any particular lien is valid, which is most of chapter 713 and none of this.

A construction lien depends on privity, on notices to owner served outside the register, on the accuracy of the amounts claimed, and on whether the work was performed at all. None of that is in an index entry. Payment bonds under Fla. Stat. 713.23⁷ transfer a claim from the property to the bond, which changes who is owed what without changing what the register shows about the parcel. And the trust fund provisions in article three-a of the New York Lien Law govern money rather than land.

Nobody writing this is a lawyer, and none of it is advice. Whether a recorded claim of lien stands ahead of a judgment is a question for counsel with the contract and the notices in front of them. What a page can do is narrower. It can tell you that in Florida the date which fixes priority is printed on a different document from the lien, and that the document is recorded before the lien exists.