Contractors: "Did I Just file a Fraudulent Claim...What’s My Exposure?

Contractors: "Did I Just file a Fraudulent Claim...And if So...What’s My Exposure?Did I just file a fraudulent lien?

In Florida, a mechanic’s lien is a right created by statute which says that any contractor, subcontractor, materialman or laborer who performs services or provides materials to a construction project has the ability to place a lien (recorded in the public records) on that property for amounts owed for those services or materials furnished. To that end, mechanics’ liens are a great tool available to contractors, subcontractors, suppliers, and laborers to ensure payment for work, materials and/or services provided.

However, filing a claim of lien which (1) willfully exaggerates the amount of the lien claimed; or (2) willfully includes a claim for work not performed or materials not actually furnished to the property or project; or (3) compiles the lien with such willful and gross negligence as to the amount may result in a finding that such lien is “fraudulent.” That said, minor mistakes or situations where there exists a good faith dispute of an amount owed will likely not be considered fraudulent.

So what?

Well, from an owner’s perspective, if a lien is deemed fraudulent then an assertion that such lien is fraudulent constitutes a complete defense to the enforcement of the lien. From a contractor’s perspective, strict penalties exist, the least of which is an owner’s entitlement to costs and clerk’s fees, attorney’s fees for having to defend against a fraudulent claim of lien and punitive damages, the worst of which could be jail time. This should serve as a reminder that any person who willfully files a fraudulent lien commits a felony in the third degree.

What should I have done?

You should have hired an experienced construction lawyer before you filed your lien, someone who could have properly guided you on what work, materials and services are appropriate to lien. That said, if what is done is done, then take a breath and GO HIRE A CONSTRUCTION LAWYER! You don’t want to waste time or stick your head in the sand because that won’t resolve a fraudulent lien.

Relevant Resources

• Liens, Florida Statutes (2016)

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