What Is an Equitable Lien?
Most liens are created by contract (a mortgage) or by statute (a construction lien, a tax lien). An equitable lien is different. It is created by a court order when justice demands it, even though no written agreement or statute authorizes the lien.
An equitable lien is the court's way of saying: "One party has been unjustly enriched at the other's expense, and the only fair remedy is to impose a lien on the property to secure repayment."
When Florida Courts Impose Equitable Liens
- Unjust Enrichment — A homeowner hires a contractor to renovate their house. The contractor completes the work but fails to file a construction lien within the statutory deadline. The homeowner refuses to pay. The court imposes an equitable lien on the property because the homeowner was unjustly enriched by the contractor's labor and materials.
- Divorce Property — During a dissolution of marriage, one spouse pays the mortgage and property taxes on the marital home while the other spouse refuses to contribute. The court may impose an equitable lien in favor of the paying spouse for their excess contributions.
- Fraud Recovery — A seller uses fraudulently obtained funds to purchase real estate. The court imposes an equitable lien on the property to secure the victim's right to recover the stolen funds.
- Failed Contract — A buyer makes substantial improvements to a property under a contract that later fails. The court imposes an equitable lien for the value of the improvements.
Priority
Equitable liens generally take priority as of the date they are imposed by the court, which means they are typically junior to pre-existing recorded liens. However, in fraud cases, courts may impose an equitable lien with priority over all other liens to ensure the fraud victim is made whole.
Related Terms
- Lien — The broader category that includes equitable liens
- Construction Lien — A statutory lien that an equitable lien may substitute for
- Fraud — A common basis for imposing an equitable lien
Barnes Walker Lien Litigation
Barnes Walker's litigators petition Florida courts for equitable liens when our clients have been unjustly enriched or defrauded, and defend property owners against improperly sought equitable lien claims. Request a legal inquiry for assistance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC