Florida Construction Liens: Final Furnishing – Does it Include Change Order Work?
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This blog is part of a series covering a critical component of a Florida construction lien—recording the claim of lien within 90 days’ of “final furnishing.” Failing to record a claim of lien within the 90-day final-furnishing deadline renders the lien completely invalid and useless. The trick is knowing when the 90-day deadline starts to run . . . knowing the date of final furnishing. A common question we hear about “final furnishing” is: Does it include “change order” or “extra” work? Stated differently, does performance of change order or extra work extend the 90-day deadline to record the claim of lien?
Authorized Additions To The Contract Extend The Deadline
The short answer is “yes.” So long as the change order work was authorized in good faith, and performed within a reasonable time, the change order work will constitute a final furnishing and extend the 90-day deadline to record a claim of lien. See e.g. Zupnik Haverland, L.L.C. v. Current Builders of Florida, Inc., 7 So. 3d 1132, 1134 (Fla. 4th DCA 2009). The Zupnik Haverland court provided the following rationale:
As for the developer’s argument that the [contractor’s] lien was untimely filed, the record reflects otherwise. The “punch list” was a blending of [repair work] and additional work required under a [change order]. While some of the work [on the punch list] may not have tolled the time to record a lien, the parking lot work was authorized change order work. This court has stated that “there are no steadfast rules to apply to determine if work constitutes a ‘final furnishing’; rather, the lower courts are to apply the Aronson test.” Michnal v. Palm Coast Dev., Inc., 842 So.2d 927, 933 (Fla. 4th DCA 2003), rev. denied, 882 So.2d 385 (Fla.2004) (citing Aronson v. Keating, 386 So.2d 822 (Fla. 4th DCA 1980)). The parking lot work fulfilled the elements of the Aronson test in that it was done (1) in good faith, (2) within a reasonable time, (3) in pursuance of the terms of the contract, and (4) was necessary to do a “finished job.”
Id. As set forth in Zupnik Haverland, and explained in the first blog in this series, whether work counts as final furnishing is ultimately determined by application of the so-called Aronson / Michnal test. That maxim applies to change orders and extra work as well. Accordingly, change order or extra work that is properly added to the contract and completed within a reasonable time should satisfy the Aronson / Michnal test; meaning such work qualifies as final furnishing and extends the time to record the claim of lien.
What Type Of Extra “Work” Counts As Final Furnishing?
All types of labor, material, or services constituting an improvement to real property constitute lienable work. Fla. Stat. § 713.02. Thus, change order work for any labor, material, or service that constitutes an improvement to real property should count as final furnishing (presuming it otherwise fits within the parameters of the Aronson / Michnal test discussed above).
For example, delivering pricing for a requested change order can constitute final furnishing. See Michnal v. Palm Coast Development, Inc., 842 So.2d 927, 933 (Fla. 4th DCA 2003). In Michnal, the client and the contractor were at loggerheads. The contractor merely sent a fax offering a solution to a problem. The appellate court found that this fax, alone, was sufficient to qualify as a “furnishing” of a “service” for the extension of the 90-day lien deadline.
However, amounts paid for additional taxes and insurance are not lienable, and thus, would not constitute final furnishing. See Sam Rodgers Properties, Inc. v. Chmura, 61 So. 3d 432 (Fla. 2d DCA 2011) (“The payment of taxes was not contemplated in the contract. More importantly, both insurance and taxes were paid for the maintenance rather than the improvement of the property.”)
So we know that any type of labor, material, or service that improves the real property, which is authorized by the owner, should count as final furnishing that will extend the 90-day deadline to record a claim of lien. But there are other questions.
Unauthorized, But Necessary Change Order Work
It is quite clear that work added to the contract with the owner’s authorization is lienable work that will constitute final furnishing to extend the 90-day deadline. What is less clear is whether “un-authorized” work will constitute final furnishing. Generally speaking, the answer should be “no.” If the work is truly extra (i.e. it is not contemplated by the contract), and the owner did not authorize the work, then that work will not be included in the final furnishing that tolls the 90-day lien recording deadline.
However, the answer may be different if the work is contemplated by the contract. Necessary work, including hurricane-protection work, may be lienable even if the owner did not authorize it. See e.g. Sam Rodgers Properties, Inc., 61 So. 3d 432. In Sam Rodgers, the court provided in relevant part:
Additional work performed by home builder, after work was stopped due to purchaser’s failure to make scheduled draw payments, which was designed to prevent damage to partially-completed home and secure it from the elements benefited purchaser as the owner of the property and, thus, was authorized by the contract for the construction of the home, so as to extend the time for home builder to file construction lien; work was contemplated by the contract and was completed in a good faith effort to mitigate damages.
Id. The owner had stopped work on the project, but the contractor thought that it would be best for the project if some additional “protection” work was performed to mitigate against damage from storms, vandals, and rodents. Id. Even though the owner did not authorize the contractor to perform the work, it was work that was necessary for performance of the contract. Consequently, the court held that the work was lienable final furnishing and extended the 90-day deadline.
Authorized Work, With Disputed Amounts
What if the owner authorized the work, but disputes the amount due for the work? In that case, the work should constitute lienable final furnishing. See Zupnik Haverland, L.L.C. v. Current Builders of Florida, Inc., 7 So. 3d 1132, 1134–35 (Fla. 4th DCA 2009); see also Hobbs Const. & Dev., Inc. v. Presbyterian Homes of Synod of Florida, 440 So. 2d 673, 674 (Fla. 1st DCA 1983) (lienable work includes those amounts which could be justified by change orders).
The court in Zupnik Haverland reasoned that a lien is not fraudulent if there exists a good faith dispute over the amount due for the work:
“[A] good faith dispute as to the amount due does not constitute a willful exaggeration that operates to defeat an otherwise valid lien.” § 713.31(2)(b), Fla. Stat. Further, a disagreement regarding the amount of money owed does not convert a good faith dispute into a fraudulent lien. It comes down to whether the lienor believed in good faith that, at the time it recorded its lien, it had completed all of the work required under the [change order] and, therefore, was entitled to receive the full amount listed in the lien.
Id. Similarly, extra work authorized by the owner should constitute lienable final furnishing even if there is a good faith dispute over the amount due for the work.
Conclusion
The Lien Law should be your best tool in getting paid. “Mechanic’s liens protect suppliers who furnish labor or materials to the property by assuring them of full payment.” Stunkel v. Gazebo Landscaping Design, 660 So.2d 623, 625-26 (Fla.1995). If done right, a contractor can almost guarantee that it will get paid in full by using the Lien Law. However, strict compliance with the Lien Law is required and it is laced with traps for the unwary.
Many contractors fail to perfect their lien rights properly and find themselves unable to get paid. Don’t let that happen to you. Make sure you understand how “final furnishing” is determined, and take a conservative approach in calculating your final furnishing date.
For more information about final furnishing, read these additional blog articles: