W. Mason – Fox Rothschild LLP – March 6, 2014
As a threshold matter, it is often important to determine whether Florida law permits a construction lien to be placed on a particular property. In order for Florida lien law to be applicable to a property, there must be a contract between a person performing services and/or providing materials and a nongovernmental owner of property before the Florida construction lien laws apply. A construction lien cannot encumber governmental property. However, the statute leaves open the possibility that a construction lien could encumber leaseholds within governmental property; i.e. a vendor’s property in an airport or bus terminal.
While the cleanest construction liens will be based on an express written agreement, a construction lien can be based on a contract-implied-in-fact under Florida law. This is because a contract-implied-in-fact is an enforceable contract “that is inferred in whole or in part from the parties’ conduct, not solely from their words.” Commerce Partnership 8098 Ltd. Partnership v. Equity Contracting Co., 695 So.2d 383, 385 (Fla. 4th DCA 1997). The Supreme Court of the United States defined a contract-implied-in-fact as “an agreement ‘implied in fact'” as “founded upon a meeting of minds, which, although not embodied in an express contract, is inferred, as a fact, from conduct of the parties showing, in the light of the surrounding circumstances, their tacit understanding. Baltimore & Ohio R. Co. v. United States, 261 U.S. 592 (1923)
A construction lien in Florida cannot be based on a contract-implied-in-law because a contract-implied-in-law does not require an agreement. CDS & Associates of Palm Beaches, Inc. v. 1711 Donna Rd. Associates, Inc., 743 So. 2d 1223, 1224 (Fla. Dist. Ct. App. 1999). Rather, a contract-implied-in-law, such as a claim pursuant to a theory of quantum meruit, is “an obligation created by the law without regard to the parties’ expression of assent by their words or conduct.” Id.
Florida Statute defines “improve” to mean to build, erect, place, make, alter, remove, repair, or demolish any improvement over, upon, connected with, or beneath the surface of real property, or excavate any land, or furnish materials for any of these purposes, or perform any labor or services upon the improvements, including the furnishing of carpet or rugs or appliances that are permanently affixed to the real property and final construction cleanup to prepare a structure for occupancy; or perform any labor or services or furnish any materials in grading, seeding, sodding, or planting for landscaping purposes, including the furnishing of trees, shrubs, bushes, or plants that are planted on the real property, or in equipping any improvement with fixtures or permanent apparatus or provide any solid-waste collection or disposal on the site of the improvement. Fla. Stat. § 713.01.
An “owner” is a person who is the owner of any legal or equitable interest in real property, which interest can be sold by legal process, and who enters into a contract for the improvement of the real property. The term includes a condominium association pursuant to chapter 718 as to improvements made to association property or common elements. The statute specifically excludes any political subdivision, agency, or department of the state, a municipality, or other governmental entity from the definition of “owner.” Fla. Stat. § 713.01.
An “improvement” is defined as any building, structure, construction, demolition, excavation, solid-waste removal, landscaping, or any part thereof existing, built, erected, placed, made, or done on land or other real property for its permanent benefit. Fla. Stat. § 713.01.
When the person who contracted for an improvement on real property is not the owner of the improved land, the lien law is generally inapplicable. However, if removal of such an improvement from the land is practicable, the lien of a lienor shall attach to the improvement on which he or she has performed labor or services or for which he or she has furnished materials rather than the land itself. Courts do not consider the health of the residents for determining whether removal of an improvement is “practicable.” Dargel Const. Co. v. DeSoto Lakes Corp., 172 So. 2d 849 (Fla. 2d DCA 1965).
In sum, an analysis of the viability of validity of a lien begins with an examination of the character of the owner of the property (public versus private) and whether the person who contracted for the subject improvement is an owner in fact. Once it is determined whether the property can be subject to a lien, a further examination of whether the more technical procedural requirements of Florida’s lien law should take place in the process of enforcing or defending against a construction lien in Florida.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.