A business trial lawyer may hear this question or something similar a number of times. The short answer is, “It depends.”
Most of the time, a person or business doesn’t have a right to record a claim of lien in the public records unless the person or business is a contractor, materialman, or supplier. In those circumstances, if the person or business meets other requirements of Florida’s lien law, then it may be appropriate to record a claim of lien.
It’s important to recognize that in most circumstances, however, there is no pre-judgment right to record a lien against real property just because the owner may owe money to a person or business.
A word of caution
Recording a claim of lien, in the absence of a valid basis to do so, can subject a person or business to a claim for attorneys’ fees or damages for slander of title. In the case of a fraudulent lien, the party against whom the lien was recorded has a complete defense to the foreclosure of the fraudulent lien. This can be decisive in a lawsuit against a debtor, as the creditor may have to compromise his or her total amount of damages sought in order to account for the damages or attorneys’ fees incurred in by the debtor defending against a fraudulent lien. The state attorney may even prosecute the filer of a fraudulent lien for a third degree felony.
While a minor mistake in preparing an otherwise valid claim of lien won’t render the lien fraudulent, the law of liens can be complicated. It’s important to consult your lawyer.
Legal options to collect a debt
Don’t worry—all is not lost. After all, a lien is merely a method to secure the payment of a debt. The presence or absence of a lien does not affect the existence of the debt. A person or business may still be able to file a lawsuit and obtain a judgment on a promissory note or unpaid account, assuming the statute of limitations has not expired and that any defenses to the lawsuit can be overcome.
A lien may be important only if the person who owes money has no liquid assets available to pay a judgment. Keep in mind that, even if a person or business can properly record a lien, others may be in line to get paid first.
Aside from mechanics’ liens or mortgage liens, both of which are recorded, there are other liens that may arise by operation of law. For example, landlords may have a lien for rent in certain circumstances. Commercial real estate brokers may have a lien against commissions in certain circumstances.
If the person who owes money has a judgment entered against him or her but has no assets, there still may be some long-term options. A judgment for damages (i.e., a sum of money) can become a lien on non-homestead real property in a county if a certified copy of the judgment is recorded in the clerk’s office. The judgment lien can last for up to 20 years if it is properly renewed.
The bottom line
Even if a person or business doesn’t have a lien against someone who owes money, there are options. If you should need assistance, I may be reached at firstname.lastname@example.org or by phone at 239-344-1326.