The
Claim of Lien must accurately state the contract amount
and the amount actually unpaid and owing as of the date
that the Claim of Lien is executed. It should not include
monies for work not yet performed. Florida Statutes
section 713.01(7) provides the rather complex definition
of “contract price” and should be consulted
when preparing a Claim of Lien. Essentially, the amount
stated as being owed in the Claim of Lien should reflect:
- Properly
authorized extras and change orders that either increase
or decrease the contract amount; and
- Increases
or decreases attributable to changes in the scope of work;
and
- Increases
or decreases attributable to defects in the work performed;
and
- Decreases
attributable to the contractor’s failure to fully
perform the contract where the contractor has substantially
performed the contract; and
- Increases
or decreases attributable to other breaches of the contract;
and
- Allowance
items when accepted by the owner; and
- Liquidated
damages provided for in the contract, except that no penalty
or liquidated damages in the direct contract between the
owner and the contractor affect the lien amount of any
other lienor.
Contractors,
i.e., lienors with a direct contract with the owner other
than laborers, materialmen or professional lienors, must
also substantially perform their direct contract in order
to be entitled to a lien in the amount of the full contract
price.
Pursuant to a 1999 amendment to the statutes, when materials
have been specially fabricated for the project, but have not
yet been incorporated into the project, the contract price,
or in the absence of a set contract price, the reasonable
value of the specially fabricated materials, must be separately
stated in the Claim of Lien.
If there is no agreed upon price in the contract, then the
lien amount should be the value of all labor, materials
and/or services covered by the contract, subject to the
seven (7) enumerated items, above.
The
Claim of Lien should include interest on the amount owed
if the contract provides for interest at a different rate
than the current statutory prejudgment interest rate; however,
it is a prudent practice to state the interest amount and
the contract rate of interest separately in the Claim of
Lien; for example, “$50,000.00, plus interest at the
contract rate of eighteen percent (18%) per annum from 1/1/00.”
The
lien amount should not include any attorney’s fees
the lienor has incurred, or estimates it may incur, in enforcing
the lien rights as attorney’s fees are not recoverable
until a lawsuit has been commenced for the foreclosure of
the lien.
The
lien amount should not include, as separate items, the lienor’s
overhead and profit; however, these items are recoverable
if they are included in the total contract price. The value
of unperformed future work, lost future profits on unperformed
work, and cancellation, restocking, or similar charges for
returned materials should not be included in the lien amount.
Considerable caution should be exercised in regard to the
inclusion in the lien amount of the value of labor, services,
or materials which are the subject of pending change orders,
as the inclusion of such amounts may be determined by a
court to be a willful exaggeration of the lien amount, thereby,
rendering the entire lien unenforceable and fraudulent and
giving rise to certain remedies in favor of the owner discussed
in more detail, below.
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