Sell Your House Fast During Construction Lien

Yes, you can sell a house with a construction lien on it in Florida. The lien does not stop a sale, but a buyer who needs a mortgage usually cannot close while a claim of lien is recorded, because the lender and the title insurer want it gone first. A cash sale deals with it directly: if the claim is valid, the title company pays it out of your proceeds and records the release. If you believe the contractor was paid or the claim is wrong, there are ways to move or challenge it before you sell.

What is a construction lien? When a contractor, subcontractor, laborer or supplier says it was not paid for work or materials that improved your property, it can record a claim of lien in the county where the house sits, under Chapter 713 of the Florida Statutes. The claim states who the lienor is, what was furnished, the amount unpaid, and the dates of the first and last labor or materials (713.08(1)). It is sworn, and the lienor has to serve a copy on you. Failure to serve it before recording or within 15 days after makes the claim voidable to the extent that the failure prejudiced someone who relied on it (713.08(4)(c)). Your title company finds the claim in the title search.

What are the deadlines? A claim of lien must be recorded no later than 90 days after the lienor last furnished labor, services or materials (713.08(5)). Once recorded, the lien lasts one year. Under 713.22(1) it does not continue longer than one year after recording unless the lienor files a court action to enforce it within that time, and a lien that is continued by a suit is not enforceable against later purchasers without notice unless a notice of lis pendens is recorded. So a claim recorded more than a year ago with no suit behind it has lapsed, which is a question to put to the title company before you assume the lien is live. If a suit was filed, our pending lawsuit page covers selling while a case is open.

Can you shorten the one year? Yes. Under 713.22(2), an owner or the owner's attorney can record a Notice of Contest of Lien. The lienor then has 60 days from service of that notice to file suit, and if it does not, the lien is extinguished automatically. That is a legal step, so a Florida attorney should file it. A second route is a court order: under 713.21(4), an interested party can file a complaint, the clerk issues a summons, and if the lienor fails to show cause within 20 days why the lien should not be enforced or vacated, the court cancels it.

Can you move the lien off the house without paying it? Under 713.24, any person with an interest in the property can transfer a lien to other security by depositing money with the clerk or filing a surety bond. The bond has to equal the amount in the claim of lien, plus 3 years of interest at the legal rate, plus $5,000 or 25 percent of the amount claimed, whichever is greater. Once the clerk records the certificate of transfer, the house is released from the lien and the claim follows the bond or deposit. A bond is a cost and a surety has to write it, so it makes sense mainly when you dispute the claim and want a clean title now.

How does a cash close pay a valid lien? Once we agree on a price, the title company orders a payoff from the lienor, along with payoffs for your mortgage and any other recorded lien. At closing the title company pays them from your proceeds and records the satisfaction or release (713.21(1) and (2)). You do not write the contractor a check yourself, and you receive what is left. If the proceeds do not cover every payoff, the shortfall has to be settled before the title company will insure, and we tell you that when we read the payoff figures.

What if the claim is wrong? A claim of lien that overstates the amount or leaves out details is not automatically void: a court can still enforce it against someone it did not harm (713.08(4)(a)). That is why the practical choices are to pay it at closing, bond it, or contest it, and not to ignore it. Send us the recorded claim of lien and any contract, invoice or payment records you have, and tell us about every other debt on the house. If a court judgment has already been entered on the debt, see judgment lien; if your association has recorded its own lien, see HOA lien.