By: Justin C. Carlin
In the Florida construction law context, contractors, subcontractors, and sub-subcontractors sometimes assert liens on property for (i) amounts that exceed that which is actually owed by a property owner, or (ii) work that was not actually performed on the property. When either of such events occurs, a court may find that the lien is fraudulent, declare that the lien unenforceable, and award actual and punitive damages to any person who is damaged by the fraudulent lien.
Section 713.31(2)(a) of the Florida Statutes defines a fraudulent lien as a lien containing:
- A willful exaggeration as to the amount of the claim; or
- A claim for work not performed upon the property upon which the lienor seeks to impress its lien; or
- A claim for materials not furnished for the property upon which the lienor seeks to impress it lien; or
- A claim that is compiled “with such willful and gross negligence as to amount to a willful exaggeration.”
Fla. Stat. § 713.31(2)(a) (2012).
Asserting that a claim of lien is fraudulent is a complete defense to the enforcement of the claim of lien, or against any lien in any action in which the validity of the lien is an issue. “However, a minor mistake or error in a claim of lien, or a good faith dispute as to the amount, does not constitute a willful exaggeration that operates to defeat an otherwise valid lien.” Fla. Stat. § 713.31(2)(b) (2012).
In addition, the owner of the property against whose interest the fraudulent lien is filed, or any contractor, subcontractor, or sub-subcontractor who suffers damages as a result of the fraudulent lien, has a right of action against the lienor for
damages, which may include court costs, clerk’s fees, a reasonable attorney’s fee, and costs for services in securing the discharge of the lie, the amount of any premium for a bond given to obtain a discharge of the lien, interest on any money deposited for the purpose of discharging the lien, and punitive damages in an amount not exceeding the difference between the amount claimed by the lienor to be due and the amount actually due or to become due.
Fla. Stat. § 713.31(2)(c) (2012).
If you need to consult with a Fort Lauderdale construction lawyer regarding a fraudulent lien issue or other collections matter, then please feel free to contact our firm at (954) 764-6766 to schedule an appointment.