What Happens If You Ignore a Construction Lien on Your Property?

Ignoring a construction lien in Florida can result in foreclosure, stalled property sales, and costly lawsuits. Chapter 713 of the Florida Statutes sets strict rules that can catch property owners off guard if they don’t act quickly. Although the law is designed to protect contractors, subcontractors, and suppliers from nonpayment, it can create serious problems for property owners – especially those unfamiliar with its strict procedural requirements.

Whether you are managing a build-out, renovation, or routine upgrade, overlooking a lien filed against your property can expose you to serious legal and financial risks, including foreclosure, title complications, stalled transactions, and costly litigation.

If you receive a construction lien or even a Notice to Owner, you cannot afford to ignore it. This article explores how liens function under Florida law, what happens when they go unresolved, and how to protect your property and business from escalating risk.

What Is a Construction Lien and How Does It Function?

A construction lien allows unpaid contractors, subcontractors, or material suppliers to claim a legal interest in real property for the value of their labor, services, or materials. Under Florida law, even if a property owner pays the general contractor in full, an unpaid subcontractor or supplier may still file a lien against the property.

Once liens are recorded, much like mortgages, they cloud the property’s title, making it difficult to sell or refinance. Unless challenged or resolved, a lien can remain valid for up to one year and may ultimately be enforced through foreclosure.

However, Florida law imposes strict procedural requirements on lienors:

• Notice to Owner (NTO): Any lienor who is not directly contracted by the property owner must serve an NTO within 45 days of first furnishing labor or materials. Failure to do so is a complete defense to lien enforcement.
• Claim of Lien: A lienor must record the lien within 90 days of their final furnishing of labor, services, or materials to the project. If they fail to do so, the lien expires. To enforce the lien, a foreclosure lawsuit must be filed within one year of recording.
• Licensure Requirements: Florida law bars unlicensed contractors from filing valid liens. Work performed without appropriate state, county, or local licenses can void lien rights entirely.
• Notice of Commencement (NOC): Before work begins, the property owner must record a NOC in the county’s public records. This document identifies the property and key parties to the contract, providing lienors with information necessary to serve required notices.
• Court Filing Requirement: Even if a contract includes an arbitration clause, a lienor must first file an enforcement action in court before the lien expires. (Florida Construction Liens – Enforcing Lien Rights Under a Contract With an Arbitration Provision explores this in greater detail). 

Lienors frequently lose their rights by failing to comply with these procedural requirements. But when they have filed correctly, a lien can be a powerful claim that must be taken seriously by property owners. 

What Happens When a Lien Goes Unresolved?

Ignoring a construction lien can lead to lasting and escalating consequences.

1. Foreclosure Risk:  A lien can lead to a foreclosure lawsuit. A lienor may sue to force the sale of the property to satisfy the debt. Even if you believe the lien is exaggerated or invalid, failing to respond within the legal timeframe can result in default judgment and loss of the property.

2. Clouded Title and Frozen Transactions: A recorded lien creates a cloud on title, preventing the sale or refinancing of the property. Title insurers will not issue policies on encumbered properties, and lenders will generally refuse financing until the lien is resolved. For SMBs relying on property value to support growth or liquidity, this can freeze operations.

3. Legal Costs and Liability: Under Section 713.29, Florida Statutes, the prevailing party in a lien enforcement action is entitled to recover attorney’s fees and court costs. If you lose, your financial liability may far exceed the original amount claimed. Moreover, defending against potentially fraudulent liens can add further expense – even if the lien is ultimately invalid.

An unresolved lien can block sales, freeze refinancing, and potentially lead to foreclosure if not addressed promptly.

The Impact of Unresolved Liens on Property Sales, Refinancing, and Lawsuits

Unresolved liens affect every stage of property ownership and business planning:

• Sales: Buyers are unlikely to proceed with a purchase when the title is clouded. Delays may result in canceled deals or price reductions.
• Refinancing: Most lenders require clean title and title insurance. A lien can prevent loan approvals or delay disbursements.
• Increased Risk of Litigation: Property owners may face lawsuits not only for foreclosure but also for breach of contract, unjust enrichment, or failure to pay subcontractors or suppliers. Ignoring lien-related notices can weaken your legal defenses or cause you to miss statutory deadlines.

Best Practices for Property Owners Who Receive a Lien Notice

If you receive a Notice to Owner, Claim of Lien, or any indication that a lien may be filed, act quickly and strategically. Florida law offers remedies if you respond in time.

1. Review the Documentation Carefully: Assess whether the lienor followed Florida’s technical requirements. Did they serve a timely NTO? Are they properly licensed? Did they record the lien within 90 days? A construction attorney can help identify procedural defects that may be grounds for dismissal.

2. Communicate with All Relevant Parties: Open dialogue with your general contractor, subcontractors, and suppliers may help resolve disputes. Always request and verify lien releases or waivers at each payment milestone. Before issuing final payment, request a Contractor’s Final Payment Affidavit to confirm that all parties have been paid.

3. Consider Whether the Lien May Be Fraudulent: A lien that includes unauthorized work, work not performed, or damages like lost profits may be deemed fraudulent under Section 713.31, Florida Statutes. A fraudulent lien is a complete defense to enforcement and may entitle you to damages, attorney’s fees, and costs. The fraud may even constitute a third-degree felony. (See our article Florida Construction Liens: Fraud or Just a Good Faith Dispute) 

4. Evaluate Construction Lender Liability: In some cases, a construction lender may be liable if it improperly withholds loan funds or reallocates construction funds without providing statutory notice to lienors. Under Section 713.3471, a lender that fails to notify contractors and suppliers of changes in funding may be liable for actual construction costs and a statutory markup for overhead and profit. Review your loan documents and construction timeline with counsel to determine whether lender liability is a viable claim. (See our article Holding the Construction Lender Liable)

5. Take Legal Action if Needed: If the lien is disputed, consider filing a Notice of Contest of Lien or a Complaint to Show Cause. These procedures shorten the lienor’s window to enforce the lien and place the burden back on the claimant. Your attorney can guide you through these options based on the circumstances.

Conclusion: Protect Your Property

Construction liens are powerful legal claims that can derail transactions, disrupt operations, and expose your business to serious risk. Whether you are dealing with a valid claim, a potential fraudulent lien, or a dispute involving a construction lender, it is essential to act quickly and strategically. At Jimerson Birr, we help Florida property owners, developers, and businesses resolve lien disputes, assert their legal rights, and avoid unnecessary losses. If you have received a lien notice or believe your property is at risk, contact us to schedule a consultation.