Question 1

What are the consequences of failing to serve a timely NTO in Florida?

Accepted Answer

Failure consequences: the lienor’s lien rights are NOT completely lost (a common misconception). Instead: the lienor’s lien is limited to amounts not yet paid by the owner at the time the late NTO is served. If the owner has already paid the contractor in full: the lienor may have no lien rights (because there are no remaining amounts). If payments are still outstanding: the lienor can lien for the unpaid amounts. This incentivizes early NTO service: the sooner the NTO is served, the more likely the owner has unpaid amounts that can support the lien.

Question 2

How does the NTO interact with the owner’s payment obligations?

Accepted Answer

Payment interaction: after receiving an NTO from a subcontractor or supplier, the owner should: not make progress payments to the contractor without verifying that the NTO filer has been paid, obtain partial lien releases from the NTO filer before making payments, or withhold from the contractor the amount claimed in the NTO. Section 713.06(3)(h): payments made by the owner without these protections are "improper payments" and may not protect the owner from lien claims by the NTO filer. This creates a "pay if paid" dynamic: the owner should ensure that subcontractors are paid before releasing funds to the contractor.

Question 3

Can a Florida property owner require lien waivers instead of relying on the NTO process?

Accepted Answer

Lien waivers: yes, the owner can require: progress lien waivers (from each subcontractor and supplier, at each progress payment), final lien waivers (from all subcontractors and suppliers, at final payment), and a contractor’s final affidavit (the contractor certifies that all subcontractors and suppliers have been paid). Section 713.20: provides statutory forms for lien waivers (partial and final). Best practice: the owner should require both NTO tracking and lien waivers: the NTO identifies all potential lienors, and the lien waivers confirm payment at each progress milestone.

Notice to Owner Construction

Florida Notice to Owner (NTO) Details

Late NTO Consequences

Owner Payment Obligations

Lien Waivers

Related Terms

Barnes Walker Construction Law

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