Fraudulent Liens

Successful construction projects typically proceed according to a complex, but structured plan. A property owner solicits bids from general contractors, who then use a series of subcontractors to realize the project conceptualized by the property owner.  Along the way, the property owner will pay the general contractor labor, services and materials that furnished.  If the property owner fails to make payment, the general contractor (or subcontractor or materials supplier) may establish a lien on the property.  Contesting a lien is typically something in which a property owner would engage the services of an experienced construction attorney. However, recently, a number of property owners in Hillsborough, Pasco, and Collier counties had liens imposed against their properties for roofing work that was never performed, as part of an ongoing roofing scam in the Bay Area.  A discussion on fraudulent liens, including some of the more common examples, will follow below.

Fraudulent Liens

The Florida Construction Lien Law permits parties who perform construction work to record Construction Liens if they are not paid for their labor, services or materials.  After a Construction Lien is recorded, an owner or contractor, subcontractor or sub-subcontractor may assert the claim that the lien is fraudulent, a charge which, if proven, can subject the lienor to punitive damages, attorneys’ fees, and criminal charges.  Specifically, the Construction Lien Law provides three means in which a lien may be deemed fraudulent:

• Willful exaggeration of the cost of the lienor’s services, materials, or other items;
• Willful inclusion of a claim for work not performed or materials not furnished; or
• Willful and gross negligence in compiling and recording the lien.

If a lien is proven to be fraudulent, a court will not enforce the lien against the property owner.

Common Scenarios of Fraudulent Liens

Some of the more common scenarios in which liens are determined to be fraudulent include the following:

• Liens for Non-Lienable Items. As mentioned above, liens can only be asserted to recover the reasonable value of a contractor’s or subcontractor’s labor, services or materials. Other costs, such as lost profits, are not lienable items.
• Non-Performance of Work. In addition to the scam referenced in the article above, this scenario occurs when the lienor claims that it performed work on the property above and beyond what, in fact, was done.
• Liens Based on Compensation Disagreements. In some cases, the method used by the lienor to calculate the amount due may differ from that used by the property owner, which can lead to an exaggeration of the amount owed.

Seek Legal Advice

If you have a Construction Lien issue, contact an experienced Construction Lien attorney as soon as possible, especially if you believe that the lienor is attempting to recoup more than it is entitled to.  The attorneys at Linkhorst & Hockin, P.A. have extensive experience with the Florida Construction Lien Law, and understand what needs to be done to prove fraud in a lien to ensure you do not pay more than reasonably due. Contact our Jupiter office today.

Resource:

wfla.com/8-on-your-side/customers-of-roofing-contractor-tied-to-convicted-swindlers-stuck-with-supply-bills/1198795390