Lenders’ Responsibilities and Fraudulent Liens

The Construction Lien Law provides that a lender must record a Notice of Commencement and disburse funds to a lienor. It also sets forth the limits of liability of the construction lender. Lenders have always had indirect involvement with the Construction Lien Law. Their responsibility and liability has now been codified.

A fraudulent lien is defined under the Florida Construction Lien Law as a lien which has been “wilfully exaggerated” in amount, or in which the lienor has “wilfully included a claim for work not performed upon or materials not furnished for the property upon which they seek to impress such lien,” or where the lienor was grossly negligent in preparing their lien.