Businesses with unpaid construction invoices must act quickly

On Behalf of | Jun 14, 2024 | Construction Law |

The construction industry can be quite profitable for both individuals working to support their families and entrepreneurs trying to turn resources into revenue. Florida has plenty of demand for construction firms to remodel existing properties, erect new businesses and expand homes.

Typically, construction firms only require a deposit when initially beginning work on a project. Companies accept such arrangements with the understanding that a property owner should pay the full balance of the contract’s value after the completion of the work. Unfortunately, not all property owners follow through on their obligation to pay professionals in full and on time for services rendered.

Some people fabricate trumped-up issues with a property to justify not paying the balance of what they owe. Others simply avoid all attempts at communication and collection efforts. Construction firms, subcontractors and even suppliers may need to take action sooner rather than later. They theoretically have the ability to use the property itself as an incentive to pay them for the work or materials provided.

What Florida law permits

Contractors, suppliers and construction firms can potentially request a construction lien if a client does not fulfill their financial obligations in a timely fashion. A lien against a property can lead to foreclosure and the forced sale of the property.

Homeowners often react quickly to a lien to protect their home from the risk of future foreclosure. Florida law does limit how long businesses and professionals have to seek a lien, which allows very little time for collection efforts for negotiations with non-paying homeowners.

Businesses generally need to act quickly. They usually only have 90 days from when they finished work on a project or delivered supplies to record a lien against the property’s title. The owner receives formal notice of the lien, which could push them to finally pay what they owe.

If they fail to act, the construction company can file a lawsuit to enforce the lien. Doing so may lead to an owner making major financial moves to protect the property from foreclosure. While putting someone’s interest in their home at risk is usually not what a construction firm or professional hopes to do when taking on a project, that more forceful approach might be the only realistic way of getting payment in full from someone who doesn’t want to fulfill their financial obligations.

Learning about construction laws in Florida can protect those providing services and materials for projects and help resolve a payment issue. Those who take timely action are in the best position possible to leverage the law in pursuit of a client’s compliance.

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