As a contractor in Florida’s busy construction industry, it’s crucial to understand the intricacies of lien laws to protect your rights and ensure payment. One aspect that demands attention is the concept of fraudulent liens, a serious matter that can have severe consequences under Florida Statute 713.31.
What is a Fraudulent Lien?
In the construction realm, a lien serves as a security interest granted over the property to ensure payment for work performed or materials supplied. However, a fraudulent lien arises when a contractor: (1) willfully exaggerates the claimed amount, (2) includes charges for work not conducted or materials not provided, or (3) demonstrates such gross negligence in preparing the lien that it amounts to willful exaggeration.
Florida Statute 713.31 explicitly outlines the criteria for a lien to be deemed fraudulent. Contractors need to be aware that intentionally inflating a lien or including false claims can lead to serious repercussions.
Consequences of a Fraudulent Lien
Florida Statute 713.31 is explicit in stating that any lien found to be fraudulent is unenforceable. This means the contractor loses the right to seek payment through the lien on the property in question. However, the consequences don’t stop there.
In addition to the lien becoming unenforceable, the statute outlines the rights of affected parties. An owner or any contractor, subcontractor, or sub-subcontractor who suffers damages as a result of a fraudulent lien has the right to pursue legal action for damages. The prevailing party in such an action is entitled to recover reasonable attorney’s fees and costs. Moreover, if the lienor who files a fraudulent lien is not the prevailing party, they become liable to the owner or the defrauded party who prevails in the action.
The repercussions don’t end with civil liability. The statute also establishes that any person who willfully files a fraudulent lien commits a felony of the third degree.
Defenses Against Fraudulent Liens
While the consequences are substantial, it’s important to note that not every mistake or dispute constitutes a fraudulent lien. Florida Statute 713.31 provides a safeguard for contractors in cases of minor mistakes, errors, or good faith disputes over the amount due. A genuine disagreement on the payment amount does not automatically render a lien fraudulent.
However, contractors should exercise care in accurately documenting and justifying their claims to avoid unintentional errors that could potentially be misconstrued as willful exaggeration.
Closing
Navigating the construction industry in Florida comes with its complexities, and understanding the nuances of lien laws is critical for contractors. The ramifications of asserting a fraudulent lien under Florida Statute 713.31 are severe and can have lasting effects on a contractor’s reputation and financial stability. By exercising caution and maintaining good records, contractors can mitigate the risks associated with fraudulent liens.
DISCLAIMER: The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.
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