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Florida Construction Law: Lien Transfer Bonds


Construction law in Florida is notoriously complex. Understanding just how the state’s construction lien statute applies to real world cases can be incredibly challenging. To ensure that contractors and subcontractors that operate within the state are able to protect their rights, our experienced West Palm Beach construction law attorneys have put together a quick guide explaining the basics of lien transfer bonds.

What is a Lien Transfer Bond? 

When a construction lien (also known as a mechanic’s lien) is put on property, it places many different restrictions on that property. For construction contractors who have not been paid in full for the labor or materials they have provided to a project, this fact makes liens incredibly valuable as a payment collection tool. A lien transfer bond is a tool that allows property owners to take action against a lien to restore their property rights. In the most simple terms, a lien transfer bond removes a lien from a piece of property, and then replaces that lien with a bond that guarantees satisfaction, only if a court upholds the actual merits of the original lien.

Florida Law and Lien Transfer Bonds 

Under the Florida construction lien statutes, any individual or legal entity that has an interest in property, on which a mechanic’s lien has been recorded or on which lien foreclosure action has been taken, can transfer the lien to a bond. This must be done by:

  1. Depositing the appropriate amount of money with the clerk; or
  2. Filing a bond with the clerk.

For property owners, this is an important tool, as it allows them to temporarily move the lien of the of the property, thereby making it possible to obtain financing or to sell the property.

Construction Companies Must Act to Preserve Their Rights 

If a Florida contractor files a lien against property, then the property owner transfers that lien to a bond, the contractor must take additional action to ensure that their rights are protected. More specifically, after a construction lien is transferred, a company’s lien must be amended to assert a direct claim against the bond.

If the initial lien is not amended to include the bond, the construction company will lose out on its ability to take any legal action against the property owner in the future. Under Florida law, the lienor has exactly one year to properly amend their initial lien. If action is not taken in time, the construction company will lose its ability to foreclose on the property and lose its ability to claim all or any part of the bond. Do not let this happen to your company. If a property owner transfers a lien to a bond, you need to contact an attorney immediately to protect the legal rights and financial interests of your business.

Contact Our Office Today 

At Pike & Lustig, LLP, our top-rated Florida construction litigation lawyers are standing by, ready to help you and your company. To schedule an immediate, free review of your case, please call us today at 561-291-8298 (our West Palm Beach office) or at 305-697-9799 (our Miami office). We look forward to assisting you.


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