By coincidence, Gary Poliakoff, one of South
Florida’s leading Condo Attorneys wrote the piece quoted below for the
Sun-Sentinel Condo Blog yesterday. Add his points to the 21 point check off
list for contracts that I wrote about yesterday, and you can feel pretty confident about engaging a
contractor.
But: after a final agreement has been
written be sure that our attorneys give the final approval.
by: Gary Poliakoff February 22nd, 2012 | 9:24 AM
Did
you know you may have to pay a subcontractor, material supplier or someone else
working on your job site, even if you already paid the contractor? Did you
know that subcontractors and others are entitled to place a lien on the
property for non-payment? Those liens can impact closings
and financing needs.
Although
construction contracting is not something most board members are
familiar with, the State of Florida requires them to follow very detailed
procedures when making payments to the contractors hired to do work on the
condominium property.
The
first step to take when commencing a construction project is to record a Notice
of Commencement. Florida Statutes require you to record a Notice of
Commencement in the public records identifying the legal title of the
property being improved, and the names and addresses of the owner (or association
as the agent of the owners), contractor, lender, bond surety (if any), and any
other individuals who should receive copies of documents associated
with the Florida Construction Lien Law.
This
Notice of Commencement is an important document. Please review the Notice
with an attorney and do not rely on your manager or the contractor to fill out
the information. A mistake on the Notice of Commencement can come back to
harm the association as well as the individual owners.
As
your construction progresses, you will receive documents called Notice to
Owner. Sometimes these documents are called Notice to Owner/Preliminary Notice
and are usually served upon you via Certified Mail. If you included your fax
number in the Notice of Commencement, the Notice to Owner may also be faxed to
you. They may also hand-deliver it to you and, in some instances, it may just
be posted on your job site. It is very important that you keep track of
everybody who has served a Notice to Owner on you. The Notice to Owner is not a
cloud on title; rather, it is a document from those entities, hired by your
contractor, that you must ensure get paid to avoid liens on your property.
Every
time you pay your contractor, it is vital that you ensure that all
subcontractors and suppliers that have served you with a Notice to Owner have
been paid in full. Before you make payments to your contractors, you should
call everybody who served a Notice to Owner on you and find out how much they
are owed.
When
you make your next payment to your contractor, it is critical that you make
sure that you get a Release from everybody who served a Notice to Owner in the
amounts which you learned are due. If you do not get a Release in the
company will look to you later for payment or lien your job.
The
Florida Construction Lien Law also gives you the right to require a list of
money owed to subcontractors from your contractor every time you make a
payment. This Affidavit should be given to you by your contractor, but the law
does not allow you to legally rely on whatever the contractor tells you.
Rather, you have an affirmative duty to make sure everyone who serves a Notice
to Owner is paid in full.
Do
not, under any circumstances, make your final payment to your contractor until
you receive final Releases of Lien from every entity who served a Notice to
Owner. If there is a problem getting these releases, you must make sure that
everyone serving a Notice to Owner gets paid before you issue that last check
to the contractor.
GARY POLIAKOFF is a founding
principal of Becker & Poliakoff, P.A. He has devoted a significant part of
his career to the practice of Community Association law. Author of New
Neighborhoods: The Consumer's Guide to Condominium, Co-op and HOA Living.
_________________________________________________________________
Thanks for your comments, even the negative ones. My point has always been that we can get along without agreeing on every issue. Open discussion among intelligent, reasonable people always leads to better decisions.
Michael E Katz
Director
Southpoint
Katz8356@Comcast.net
954-563-0959
