LIEN RIGHTS FOR PROFESSIONAL (DESIGN) SERVICES

imagesDesign professionals  (e.g., architect, engineer, interior designer, surveyor, and mapper) have lien rights for professional services they perform under Florida’s Lien Law.

 

 

Florida Statute s. 713.03 governs liens for professional services and provides:

 

(1) Any person who performs services as architect, landscape architect, interior designer, engineer, or surveyor and mapper, subject to compliance with and the limitations imposed by this part, has a lien on the real property improved for any money that is owing to him or her for his or her services used in connection with improving the real property or for his or her services in supervising any portion of the work of improving the real property, rendered in accordance with his or her contract and with the direct contract.

 

(2) Any architect, landscape architect, interior designer, engineer, or surveyor and mapper who has a direct contract and who in the practice of his or her profession shall perform services, by himself or herself or others, in connection with a specific parcel of real property and subject to said compliances and limitations, shall have a lien upon such real property for the money owing to him or her for his or her professional services, regardless of whether such real property is actually improved.

 

 

This statutory language is important to the design professional.  Paragraph 1 says that a design professional shall have lien rights for their professional services rendered pursuant to their contract and the direct contract (or contract with the owner of the real property, typically the owner-architect contract in the design-bid-build scenario) in connection with improving the real property.  This would be the paragraph relied on by design professionals NOT in privity of contract with the owner.  On the other hand, Paragraph 2 would apply to design professionals that enter into a direct contract with the owner of the real property for professional services (such as the architect in the design-bid-build scenario).  Under this paragraph, the design professional has lien rights for their professional services regardless of whether the real property is even improved.  This means that the owner can decide not to use the professional services (the design) or abandon the project and the design professional in direct contract with the owner has lien rights even though the real property has not been improved.   Now, if a design professional enters into a contract with a developer or person that never had an interest in the real property, the design professional is not going to be able to use this statute to create lien rights because it never entered into a contract with the actual owner of the real property.  See Grossman v.  Pollack, 100 So.2d 660 (Fla. 3d DCA 1958) (finding that architect could not enforce lien for leasehold interest that never came into being because there was no privity between architect or anyone with interest in the real property).

 

Design professionals have flexibility preserving lien rights since they do not have to comply with all of the technical requirements that a general contractor, subcontractor, or supplier must comply with.  Design professionals do NOT need to serve a Notice to Owner (within 45 days of initial furnishing) unlike the supplier or subcontractor not in privity of contract with the owner.  And, the design professional in privity of contract with the owner does NOT need to serve a contractor’s final payment affidavit (at least 5 days before filing a lawsuit) unlike the contractor hired directly by the owner.   The ONLY thing the design professional needs to do to secure its lien rights is to record a lien within 90 days of its final furnishing of professional services (and serving a copy of the lien on the owner).

 

 

images-1The downside, however, is that a design professional’s lien maintains a priority standpoint from the date the lien is recorded.  So, anything that is recorded before the design professional’s lien will be superior to the lien.  This is different than a lien recorded by a general contractor, subcontractor, or supplier in that their lien relates back to an effective notice of commencement, which is important from a lien priority standpoint.

 

For example, let’s assume there is a new construction project.  The owner obtains financing and a mortgage securing the construction loan is recorded.  This mortgage should have superior priority to any other encumbrance on the property (if not, lenders would never lend money!).  After the mortgage is recorded, and before construction commences, a notice of commencement is recorded (which lasts for 1 year unless a different expiration date is specified; although, the notice of commencement can be amended).  Within the effective period of the notice of commencement, the structural engineer records a lien; the next day the architect records a lien.  Months later, and within the effective period of the notice of commencement, the framing subcontractor records a lien.  What is the priority of these liens? The framing subcontractor’s lien will have priority because it will relate back to the notice of commencement.  Then, the structural engineer’s lien will have priority over the architect’s lien because it was recorded the day before the architect’s lien.  Remember, design professional’s liens do not relate back to the notice of commencement and their priority is dictated as of the date/time they are recorded. Any other contractor or supplier that records a lien within the effective notice of commencement will have priority over the design professional’s lien since these liens will relate back to the earlier recorded notice of commencement.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.