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Can You Lien a Leased Property?

By Alex Barthet

There’s a popular misconception that doing work on a leased property for a tenant means you can’t protect yourself when it comes to getting paid. Not true! But doing work for a tenant does mean you need to take specific steps to have rights and recourse.

Generally, you can lien a leased property. The first step is determining who is contracting with whom on the project. If you are the general contractor, are you signing a construction contract with the landlord or with the tenant? If you are the subcontractor or a supplier, with whom is your general contractor’s contract?

Here’s why it matters. Florida Statutes allow you to lien the interest of the party contracting with the general contractor. If the landlord is the one contracting with the general contractor for the work, and that contract is not paid, your lien rights would be on the contractor’s interest – the actual property as a whole.

But say your contract, or your GC’s contract, is with a tenant, perhaps the owner of the restaurant that’s being built out. If you have lien rights, those rights would only attach to the restaurant owner’s lease. You wouldn’t be able to sell the property as a whole if you needed to get paid.

So how do you learn what the contract signer’s interest is? Search public records to determine the owner of the property. Go to the property appraiser’s website for the county where the property is being worked on. (Google “property appraiser XXX County.”) On the site, enter the property address, the folio number, or the name you have. The taxpayer on the property is what will come up, and most of the time, that’s the owner. If you are a general contractor, you’ll want to compare that to who signed the contract with you. If it’s not the owner, it’s likely the lessee or tenant.

Don’t make the mistake of relying on the notice of commencement for this information. Just because a corporation is listed in the notice of commencement doesn’t mean you will have lien rights on the property. Stick to the taxpayer records.

Once you determine whether you have lien rights on the property or the lease, there’s another crucial and important question to answer. Does the lease between landlord and tenant prohibit liens from being placed on the property? Most sophisticated owners have gone through a process that allows them to do just

Source: http://feedproxy.google.com/~r/lienzone/~3/2JKbQwOisjg/

  

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