Construction liens, and the clock that runs backwards

0:35The notice of commencement is the document that matters

It's called a notice of commencement.

Fla. Stat. 713.13 requires the owner to record it before actually commencing to improve the property, and to post a copy on the site.

And it isn't 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 phone number. The surety and the amount of any payment bond. And the lender.

It also carries an expiry. The form says the expiration date will be 1 year after recording unless a different date is specified, and it warns the owner that payments made after that are improper payments, which can end in paying twice.

So what you have is a dated, indexed, self-describing record of a construction project on a parcel, filed before any lien exists. It's the earliest warning the register gives you.

1:40Priority runs from the notice, not from the claim

Now, priority. And it runs from that notice.

Fla. Stat. 713.07 splits the answer in two, and subsection 2 is the one that surprises people.

Under subsection 1, liens under sections 713.03 and oh four attach when the claim of lien is recorded, and take priority as of that moment. That's the ordinary rule, and it behaves like everything else in the register.

But under subsection 2, liens under sections oh five and oh six, 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 was filed do they fall back to the date of the claim.

And subsection 3 states the cut. Those liens beat any conveyance, encumbrance or demand not recorded before the lien attached. Anything recorded before it attached, and any proceeds of that thing whenever disbursed, keeps its place ahead.

So the question about a parcel under construction is when the notice of commencement was recorded.

2:46New York files a notice of lien, and ranks them on a parity

Then there's New York, which has no notice of commencement at all, and writes its priority rule from the other end.

Lien Law 10 gives the window for filing. At any time during the progress of the work, or within 8 months after the contract is completed. 4 months where the improvement is to a single family dwelling.

Lien Law 13, subsection 1, 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 went in. Over advances made on a mortgage after that filing. And over a money judgment recovered on a claim which wasn't for materials furnished, labor performed or moneys advanced for the improvement.

Hear that last one. A judgment creditor whose claim has nothing to do with the building is named in the statute as the party who loses. That's you.

And then the same subsection removes the rule you'd expect. 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 everybody. So three mechanics liens filed in three different years don't rank in that order. They share.

Lien Law 13, subsection 5, reaches the deeds too. A conveyance recorded after the improvement commenced isn't valid against liens filed within a corresponding period, unless it carries a covenant by the grantor to hold the consideration as a trust fund and spend it on the work first.

4:28One year, and what the register shows after it

Now, the year. And what the register shows you once it's run.

Both states give a construction lien 1 year, and both make the continuation visible rather than leaving it to be assumed.

Under Fla. Stat. 713.22, subsection 1, a lien doesn't continue longer than a year after the claim was recorded, unless an action to enforce it is commenced inside that year. And then the sentence worth reading twice. A lien continued beyond the year by an action isn't enforceable against creditors or subsequent purchasers for value without notice, unless a notice of lis pendens is recorded.

Lien Law 17 does the same from the other direction. No lien continues longer than a year after the notice was filed, unless an action is commenced and a notice of pendency is filed with the county clerk.

Which makes the pair readable, and this is the useful part. A claim of lien more than a year old, with no lis pendens behind it in the same index, has stopped. Against a creditor it is over, however live it looks in the index.

5:39The notice of contest, and the 60 days it starts

And the owner can shorten that year to 2 months.

Fla. Stat. 713.22, subsection 2, does it with a recorded instrument and the clerk.

An owner or the owner's attorney records a notice of contest of lien. The statutory form tells the lienor that the time to file suit is limited to 60 days from the date of service. And the statute says the consequence plainly. A lienor who fails to sue inside those 60 days has a lien extinguished automatically.

The clerk serves it at the address shown in the claim of lien, certifies the service and the date on the face of the notice, and records it. So the notice, the service and the date all sit in the same public index the lien does.

Which means a notice of contest recorded more than 60 days ago, with nothing filed after it, is the register telling you that a lien still appearing in the index is gone.

6:41How to read one off a register

So how do you 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 is where the contractor and subcontractor liens sit.

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

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

Then search for a notice of contest of lien, which runs 60 days from service rather than from recording.

7:38What this does not cover

Here's what I'm not covering.

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

A construction lien turns on privity, on notices to owner served outside the register, on whether the amounts claimed are right, and on whether the work was done at all. None of that is in an index entry. Payment bonds under Fla. Stat. 713.23 move a claim from the property to the bond, which changes who's 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.

I'm not a lawyer and none of this is advice. Whether a recorded claim of lien stands ahead of your judgment is a question for counsel, with the contract and the notices in front of them.

What I can tell you is narrower. In Florida the date that fixes priority is printed on a different document from the lien. And that document was recorded before the lien existed.

And if you work Florida parcels, the piece on homestead is the other one that changes what you can reach, on a rule that runs differently again. Worth reading beside this one.