Prior to construction work being performed on your property, a Notice of Commencement should be recorded. Among other things, construction liens will relate back in time to an effective Notice of Commencement (meaning it has not expired). For this reason, lenders or others will want the Notice of Commencement to be terminated when the job is complete by recording in the official records a Notice of Termination of the Notice of Commencement. There is a statutory procedure to terminate a Notice of Commencement pursuant to Florida Statute 713.132.
Frequently, a clerk will want the Notice of Termination of the Notice of Commencement to be accompanied with a Contractor’s Final Payment Affidavit because 713.132 says, in material part:
(2) An owner has the right to rely on a contractor’s affidavit given under s. 713.06(3)(d), except with respect to lienors who have already given notice, in connection with the execution, swearing to, and recording of a notice of termination. However, the notice of termination must be accompanied by the contractor’s affidavit.
Notwithstanding, the Fifth District in Lasalle Bank National Ass’n v. Blackton, Inc., 59 So.3d 329, 331 (Fla. 5th DCA 2011) in interpreting this subsection stated:
We interpret this subsection to grant an owner the right to rely on the a contractor’s affidavit as an alternative to giving a sworn statement in its notice of termination that “all lienors have been paid in full.” Here, the contractor’s affidavit attached to the notice of termination was superfluous because Independence, as owner, had already averred in the notice of termination that all lienors had been fully paid.
It is always beneficial for an owner to obtain and rely on the Contractor’s Final Payment Affidavit since the contractor would be the one to hire the subcontractors and know whether all lienors (including itself) have been fully paid and, if not, those that are still owed money. However, there are times an owner may not be able to get that affidavit for a host of reasons (for example, if the job never actually commenced or the contractor is uncooperative in this regard). In these circumstances, the owner should be able to record the Notice of Termination of the Notice of Commencement absent the Contractor’s Final Payment Affidavit by averring in the Notice of Termination that all lienors have been paid.
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.