A Trap For the Unwary Could Deprive a Lienor of Lien Rights
As you may know, construction liens are valid only for one year after recording unless suit is filed within that time to foreclose upon the lien. However, although suing to foreclose upon your lien within the year will continue the validity of the lien beyond the year until a court resolves it or the case is settled, a notice of lis pendens must also be recorded in the public records. If not, then the property owner may sell the property to a subsequent purchaser, or a creditor may lien the property, and, if so, they will take priority over the lien, even though the lien was recorded first, and is in foreclosure (and therefore has been extended). Sect. 713.22(1), Fla. Stats. This could wipe out the effectiveness of the lien even though foreclosure was filed within the one year duration. For instance, it makes no difference whether your lien’s validity has been extended beyond the year after recording if the property owner can sell the property to a subsequent purchaser, whose title in the property is not affected by your lien. You would lose all rights to force a foreclosure sale against that purchaser. This would occur solely because you did not file the notice of lis pendens in the public records, which is a document that would have alerted the purchaser to the existence of your lien foreclosure. If the purchaser hasn’t been notified in that manner, then he or she could obtain clear title unaffected by the lien.
Of course, the lienor may have recourse against the seller if the property sale included affidavits or representations from the seller that no liens existed on the property. However, this recourse would lack the collateral of the property that the construction lien would provide, as well as the possibility of recovering your attorney’s fees for having to sue.
The moral of the story is to always ensure the notice of lis pendens is recorded in the public records when a lien foreclosure is filed.