Does the recording of a Notice of Commencement signed by the Landlord affect the Landlord’s rights under a previously recorded Notice of Lien Prohibition? The answer, of course, is: “it depends.”
A “Notice of Lien Prohibition” is a tool sometimes available to landlords that prohibits contractors and materialmen from placing a lien on the landlord’s underlying fee interest to space that has been leased to a tenant, when a tenant has made improvements on the space but failed to pay the the contractor and/or materialman in full. This tool is available under Section 713.10 (2)(b) of the Florida Statutes, which provides the following protection for landlords:
The interest of the lessor shall not be subject to liens for improvements made by the lessee when:
1. The lease, or a short form or a memorandum of the lease that contains the specific language in the lease prohibiting such liability, is recorded in the official records of the county where the premises are located before the recording of a notice of commencement for improvements to the premises and the terms of the lease expressly prohibit such liability; or
2. The terms of the lease expressly prohibit such liability, and a notice advising that leases for the rental of premises on a parcel of land prohibit such liability has been recorded in the official records of the county in which the parcel of land is located before the recording of a notice of commencement for improvements to the premises, and the notice includes the following:
a. The name of the lessor.
b. The legal description of the parcel of land to which the notice applies.
c. The specific language contained in the various leases prohibiting such liability.
d. A statement that all or a majority of the leases entered into for premises on the parcel of land expressly prohibit such liability.
Steps to Take for Protection
To minimize the risk of a lien being placed on the landlord’s fee interest to rental property for