When a contractor faces the frustration of unpaid funds and realizes they’ve missed the window for filing a lien, not all hope is lost. While the ability to foreclose on a lien may be forfeited, Florida contractors still have options to pursue unpaid debts through other legal avenues.
One such recourse is suing the customer for breach of contract. However, this avenue comes with its own set of challenges.
Attorneys’ Fees and “The American Rule“
Unlike a lien, where attorneys’ fees are often recoverable, pursuing a breach of contract claim under the American Rule may not guarantee the recovery of legal costs. If the contract does not explicitly stipulate the entitlement to attorneys’ fees, the contractor may not be able to recover their legal expenses, even if successful in court. This creates a significant barrier for smaller debts, where the attorneys’ fees can be more expensive than what is owed.
Judgment Challenges: Residential Property and Homestead Protection
While winning a judgment may seem like a victory, its enforceability could be hindered, especially when dealing with residential properties protected by homestead laws. This issue arises when the customer does not have the funds to pay your judgment. Ordinarily, in this scenario, you could pursue the judgment by foreclosing against the customer’s real property. However, if the property is homestead property, this is probably not an option.
Despite homestead challenges, a judgment lien can serve as a cloud on the title, affecting the customer’s ability to sell their property. While this may prompt payment when the property is eventually sold, it offers no immediate relief to the contractor. The timeline for repayment remains uncertain and could extend over a considerable period.
Garnishment and Execution
Another option available to contractors is garnishing wages or executing on the customer’s assets. However, this route may be too costly for pursuing smaller balances, and success depends on the availability of funds or assets. In cases where the customer lacks sufficient resources, these efforts may prove financially unworkable for the contractor.
Closing
When the traditional route of filing a lien is closed off, contractors in Florida must carefully weigh their options. Suing for breach of contract is a plausible alternative, but it comes with its share of limitations, from the recovery of attorneys’ fees to challenges in enforcing judgments against the customer.
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READY LEGAL 