Lender asserting rights under 713.21 and 713.31
Hi everyone. Hope all are well.
I have an issue that has come up that I have not encountered before that involves a construction mortgage lender asserting the rights of the owner under 713.21 and 713.31.
Lender and Owner / Borrower are not adverse (obviously, always the potential for conflict between a Lender and Borrower).
Lender was granted an assignment of Owner’s right to defend title to the real property to protect the lien granted under the Mortgage.
Contractor has filed a lien that is invalid on its face. Contractor blew 90 days by a mile.
Lender wants to have the lien discharged under a 713.21 action and also include an action under 713.31. I have handled these claims many times but the Plaintiff was always the Owner.
I have never seen a scenario where the Lender wanted to contest the lien on its own accord, which it has the right to do under the language in the mortgage.
Has anyone ever dealt with this. Seems straight forward but again, first time I have done it from the context of a lender asserting claim.
Any insight would be greatly appreciated.
Thanks all.
[cid:image001.jpg@01D9B8D7.E9517750]https://www.qpwblaw.com/
Michael J. Barker
|
Partner
Quintairos, Prieto, Wood & Boyer, P.A.
12428 San Jose Blvd., Suite 1
,
Jacksonville
,
FL
32223
Email: mbarker@qpwblaw.commailto:mbarker@qpwblaw.com
Web: www.qpwblaw.comhttps://www.qpwblaw.com/
Mobile: (904) 226-3660tel:(904)%20226-3660
Arizona ◆ California ◆ Colorado ◆ Florida ◆ Georgia ◆ Illinois ◆ Indiana ◆ Kentucky ◆ Louisiana ◆ Maryland ◆ Massachusetts
Michigan ◆ Mississippi ◆ Nevada ◆ New Jersey ◆ New York ◆ Rhode Island ◆ Tennessee ◆ Texas ◆ USVI
NOTICE: Quintairos, Prieto, Wood & Boyer, P. A. is a debt collector and any information obtained may be used for that purpose. This e-mail message and any attachment to this e-mail message contains confidential information that may be legally privileged. If you are not the intended recipient, you must not review, retransmit, convert to hard copy, copy, use or disseminate this e-mail or any attachments to it. If you received this e-mail in error, please notify us immediately by return e-mail or by telephone at (855)287-0240 and delete this message. Please note that if this e-mail message contains a forwarded message or is a reply to a prior message, some or all of the contents of this message or any attachments may not have been produced by Quintairos, Prieto Wood & Boyer, P. A.
Was the notice of commencement recorded before the mortgage, perhaps? That would get the lender really interested.
Bruce Partington | Shareholder
Board Certified Specialist in Construction Law
bpartington@clarkpartington.commailto:bpartington@clarkpartington.com | (850) 432-1399
CLARK PARTINGTON
Office: (850) 434-9200 | Fax: (850) 432-7340
125 East Intendencia Street, 4th Floor
Pensacola, Florida 32502
clarkpartington.comhttps://clarkpartington.com/
[cid:logo4_d1062d3d-30e4-47df-99af-a59488723ed9.jpg]http://clarkpartington.com/
From: clc-discussion-bounces@lists.flabarrpptl.org clc-discussion-bounces@lists.flabarrpptl.org On Behalf Of RPPTL CLC-Discussion
Sent: Monday, July 17, 2023 4:56 PM
To: clc-discussion@lists.flabarrpptl.org
Subject: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Hi everyone. Hope all are well.
I have an issue that has come up that I have not encountered before that involves a construction mortgage lender asserting the rights of the owner under 713.21 and 713.31.
Lender and Owner / Borrower are not adverse (obviously, always the potential for conflict between a Lender and Borrower).
Lender was granted an assignment of Owner’s right to defend title to the real property to protect the lien granted under the Mortgage.
Contractor has filed a lien that is invalid on its face. Contractor blew 90 days by a mile.
Lender wants to have the lien discharged under a 713.21 action and also include an action under 713.31. I have handled these claims many times but the Plaintiff was always the Owner.
I have never seen a scenario where the Lender wanted to contest the lien on its own accord, which it has the right to do under the language in the mortgage.
Has anyone ever dealt with this. Seems straight forward but again, first time I have done it from the context of a lender asserting claim.
Any insight would be greatly appreciated.
Thanks all.
[cid:image001.jpg@01D9B8D1.51641750]https://link.edgepilot.com/s/d2e09a79/1HrZFBGfz0uf1ILVmVuVwA?u=https://www.qpwblaw.com/
Michael J. Barker
|
Partner
Quintairos, Prieto, Wood & Boyer, P.A.
12428 San Jose Blvd., Suite 1
,
Jacksonville
,
FL
32223
Email: mbarker@qpwblaw.commailto:mbarker@qpwblaw.com
Web: https://link.edgepilot.com/s/4fc85814/MedgEnIRj0WqcyrcpoUNqg?u=http://www.qpwblaw.com/https://link.edgepilot.com/s/d2e09a79/1HrZFBGfz0uf1ILVmVuVwA?u=https://www.qpwblaw.com/
Mobile: (904) 226-3660tel:(904)%20226-3660
Arizona ◆ California ◆ Colorado ◆ Florida ◆ Georgia ◆ Illinois ◆ Indiana ◆ Kentucky ◆ Louisiana ◆ Maryland ◆ Massachusetts
Michigan ◆ Mississippi ◆ Nevada ◆ New Jersey ◆ New York ◆ Rhode Island ◆ Tennessee ◆ Texas ◆ USVI
NOTICE: Quintairos, Prieto, Wood & Boyer, P. A. is a debt collector and any information obtained may be used for that purpose. This e-mail message and any attachment to this e-mail message contains confidential information that may be legally privileged. If you are not the intended recipient, you must not review, retransmit, convert to hard copy, copy, use or disseminate this e-mail or any attachments to it. If you received this e-mail in error, please notify us immediately by return e-mail or by telephone at (855)287-0240 and delete this message. Please note that if this e-mail message contains a forwarded message or is a reply to a prior message, some or all of the contents of this message or any attachments may not have been produced by Quintairos, Prieto Wood & Boyer, P. A.
Notwithstanding the date of the NOC, the Lender is entitled and should be taking steps to protect the collateral pledged to secure the debt if necessary and to cure any clouds on title to its collateral. The problem is that they will add all their fees and costs to the borrower’s balance. I would encourage the Lender to first file a notice of contest of lien to keep the costs low because if the lienor does not file suit within 60 days, then the cloud on title is cured without the need to file suit. This is the least expensive approach. The owner should separately send the demand for sworn statement to Lienor in the meantime. I do not think the lender can send the demand for sworn statement but there may be a case that says Lender can do so when the CLA or other loan documents assign rights to the lender to challenge any liens.
If the NOC was recorded before the mortgage, I would argue for owner that the fees and costs are mostly the lender’s problem to protect their priority which is not the borrower’s problem. There may be a title claim for lender if the NOC was really recorded earlier and fees should be borne by the title insurer if that is the case after Lender makes a title claim. But it is more likely that Lender is simply taking action to protect their collateral so I would anticipate that fees and costs will be added to the borrower’s balance. So, it is still in borrower’s best interest for Lender to take least expensive approach to eliminate the lien.
[cid:image002.jpg@01D9B968.862CCA80]
Sherry A. Lambson-Eisele
Partner- Business Litigation Practice Group Leader
Boyd & Jenerette, P.A.
2290 Lucien Way, Suite 260
Maitland, FL 32751
Office: (407) 309-4760 x621
Direct: (407) 309-4758
Cell: (407) 405-8801
www.boydjen.comhttp://www.boydjen.com
Download vCardhttp://www.boydjen.com/wp-content/uploads/2019/05/Sherry-A-Eisele.vcf
From: clc-discussion-bounces@lists.flabarrpptl.org clc-discussion-bounces@lists.flabarrpptl.org On Behalf Of RPPTL CLC-Discussion
Sent: Monday, July 17, 2023 6:09 PM
To: 'clc-discussion@lists.flabarrpptl.org' clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Was the notice of commencement recorded before the mortgage, perhaps? That would get the lender really interested.
Bruce Partington | Shareholder
Board Certified Specialist in Construction Law
bpartington@clarkpartington.commailto:bpartington@clarkpartington.com | (850) 432-1399
CLARK PARTINGTON
Office: (850) 434-9200 | Fax: (850) 432-7340
125 East Intendencia Street, 4th Floor
Pensacola, Florida 32502
clarkpartington.comhttps://link.edgepilot.com/s/a2b769b4/aGv3ZCTdG0uvSPKMsyhMrw?u=https://clarkpartington.com/
[cid:image003.jpg@01D9B968.862CCA80]https://link.edgepilot.com/s/38ae2f25/dQL9OmyJ30_NwuS3BGN4WQ?u=http://clarkpartington.com/
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Monday, July 17, 2023 4:56 PM
To: clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Hi everyone. Hope all are well.
I have an issue that has come up that I have not encountered before that involves a construction mortgage lender asserting the rights of the owner under 713.21 and 713.31.
Lender and Owner / Borrower are not adverse (obviously, always the potential for conflict between a Lender and Borrower).
Lender was granted an assignment of Owner’s right to defend title to the real property to protect the lien granted under the Mortgage.
Contractor has filed a lien that is invalid on its face. Contractor blew 90 days by a mile.
Lender wants to have the lien discharged under a 713.21 action and also include an action under 713.31. I have handled these claims many times but the Plaintiff was always the Owner.
I have never seen a scenario where the Lender wanted to contest the lien on its own accord, which it has the right to do under the language in the mortgage.
Has anyone ever dealt with this. Seems straight forward but again, first time I have done it from the context of a lender asserting claim.
Any insight would be greatly appreciated.
Thanks all.
[cid:image004.jpg@01D9B968.862CCA80]https://link.edgepilot.com/s/d2e09a79/1HrZFBGfz0uf1ILVmVuVwA?u=https://www.qpwblaw.com/
Michael J. Barker
|
Partner
Quintairos, Prieto, Wood & Boyer, P.A.
12428 San Jose Blvd., Suite 1
,
Jacksonville
,
FL
32223
Email: mbarker@qpwblaw.commailto:mbarker@qpwblaw.com
Web: https://link.edgepilot.com/s/4fc85814/MedgEnIRj0WqcyrcpoUNqg?u=http://www.qpwblaw.com/https://link.edgepilot.com/s/d2e09a79/1HrZFBGfz0uf1ILVmVuVwA?u=https://www.qpwblaw.com/
Mobile: (904) 226-3660tel:(904)%20226-3660
Arizona ◆ California ◆ Colorado ◆ Florida ◆ Georgia ◆ Illinois ◆ Indiana ◆ Kentucky ◆ Louisiana ◆ Maryland ◆ Massachusetts
Michigan ◆ Mississippi ◆ Nevada ◆ New Jersey ◆ New York ◆ Rhode Island ◆ Tennessee ◆ Texas ◆ USVI
NOTICE: Quintairos, Prieto, Wood & Boyer, P. A. is a debt collector and any information obtained may be used for that purpose. This e-mail message and any attachment to this e-mail message contains confidential information that may be legally privileged. If you are not the intended recipient, you must not review, retransmit, convert to hard copy, copy, use or disseminate this e-mail or any attachments to it. If you received this e-mail in error, please notify us immediately by return e-mail or by telephone at (855)287-0240 and delete this message. Please note that if this e-mail message contains a forwarded message or is a reply to a prior message, some or all of the contents of this message or any attachments may not have been produced by Quintairos, Prieto Wood & Boyer, P. A.
Boyd & Jenerette utilizes spam and junk email filtration applications in its email information systems. These systems may prevent or delay delivery of certain email communications. If you do not receive a timely response to an email communication, please contact the intended recipient via phone.
CONFIDENTIALITY NOTICE: The information and all attachments contained in this electronic communication are legally privileged and confidential information, subject to the attorney-client privilege and intended only for the use of the intended recipients. If the reader of this message is not an intended recipient, you are hereby notified that any review, use, dissemination, distribution, or copying of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately of the error by return email and please permanently remove any copies of this message from your system and do not retain any copies, whether in electronic or physical form or otherwise.
I agree generally, but I don’t think an action under 713.21 is the least expensive path – probably the most, which is why I was wondering about the recording sequence. And I don’t know that the lender can assert the Owner’s rights under 713.21 absent some assignment from the Borrower – which may very well be in the loan documents and is suggested below, but just an assignment of the right to defend title may be insufficient. I think it would probably have to be explicit and specific. The lender has little collateral risk if the order is right (unless they’re very concerned about the borrower), but is at risk if the NOC was first. And if the order is wrong (NOC first), given the lender’s recording duty under 713.13(7), the cost of fixing it should be on the lender and not the borrower.
Bruce Partington | Shareholder
Board Certified Specialist in Construction Law
bpartington@clarkpartington.commailto:bpartington@clarkpartington.com | (850) 432-1399
CLARK PARTINGTON
Office: (850) 434-9200 | Fax: (850) 432-7340
125 East Intendencia Street, 4th Floor
Pensacola, Florida 32502
clarkpartington.comhttps://clarkpartington.com/
[cid:logo4_d1062d3d-30e4-47df-99af-a59488723ed9.jpg]http://clarkpartington.com/
From: clc-discussion-bounces@lists.flabarrpptl.org clc-discussion-bounces@lists.flabarrpptl.org On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, July 18, 2023 10:24 AM
To: 'clc-discussion@lists.flabarrpptl.org' clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Notwithstanding the date of the NOC, the Lender is entitled and should be taking steps to protect the collateral pledged to secure the debt if necessary and to cure any clouds on title to its collateral. The problem is that they will add all their fees and costs to the borrower’s balance. I would encourage the Lender to first file a notice of contest of lien to keep the costs low because if the lienor does not file suit within 60 days, then the cloud on title is cured without the need to file suit. This is the least expensive approach. The owner should separately send the demand for sworn statement to Lienor in the meantime. I do not think the lender can send the demand for sworn statement but there may be a case that says Lender can do so when the CLA or other loan documents assign rights to the lender to challenge any liens.
If the NOC was recorded before the mortgage, I would argue for owner that the fees and costs are mostly the lender’s problem to protect their priority which is not the borrower’s problem. There may be a title claim for lender if the NOC was really recorded earlier and fees should be borne by the title insurer if that is the case after Lender makes a title claim. But it is more likely that Lender is simply taking action to protect their collateral so I would anticipate that fees and costs will be added to the borrower’s balance. So, it is still in borrower’s best interest for Lender to take least expensive approach to eliminate the lien.
[cid:image002.jpg@01D9B969.4F882F50]
Sherry A. Lambson-Eisele
Partner- Business Litigation Practice Group Leader
Boyd & Jenerette, P.A.
2290 Lucien Way, Suite 260
Maitland, FL 32751
Office: (407) 309-4760 x621
Direct: (407) 309-4758
Cell: (407) 405-8801
https://link.edgepilot.com/s/66b1d1b6/ng0DIJUrpkKO5DO8ceU7Lw?u=http://www.boydjen.com/
Download vCardhttps://link.edgepilot.com/s/b306433c/6LLdAOXadEq84sSGG3fnCQ?u=http://www.boydjen.com/wp-content/uploads/2019/05/Sherry-A-Eisele.vcf
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Monday, July 17, 2023 6:09 PM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Was the notice of commencement recorded before the mortgage, perhaps? That would get the lender really interested.
Bruce Partington | Shareholder
Board Certified Specialist in Construction Law
bpartington@clarkpartington.commailto:bpartington@clarkpartington.com | (850) 432-1399
CLARK PARTINGTON
Office: (850) 434-9200 | Fax: (850) 432-7340
125 East Intendencia Street, 4th Floor
Pensacola, Florida 32502
clarkpartington.comhttps://link.edgepilot.com/s/a2b769b4/aGv3ZCTdG0uvSPKMsyhMrw?u=https://clarkpartington.com/
[cid:image003.jpg@01D9B969.4F882F50]https://link.edgepilot.com/s/38ae2f25/dQL9OmyJ30_NwuS3BGN4WQ?u=http://clarkpartington.com/
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Monday, July 17, 2023 4:56 PM
To: clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Hi everyone. Hope all are well.
I have an issue that has come up that I have not encountered before that involves a construction mortgage lender asserting the rights of the owner under 713.21 and 713.31.
Lender and Owner / Borrower are not adverse (obviously, always the potential for conflict between a Lender and Borrower).
Lender was granted an assignment of Owner’s right to defend title to the real property to protect the lien granted under the Mortgage.
Contractor has filed a lien that is invalid on its face. Contractor blew 90 days by a mile.
Lender wants to have the lien discharged under a 713.21 action and also include an action under 713.31. I have handled these claims many times but the Plaintiff was always the Owner.
I have never seen a scenario where the Lender wanted to contest the lien on its own accord, which it has the right to do under the language in the mortgage.
Has anyone ever dealt with this. Seems straight forward but again, first time I have done it from the context of a lender asserting claim.
Any insight would be greatly appreciated.
Thanks all.
[cid:image004.jpg@01D9B969.4F882F50]https://link.edgepilot.com/s/d2e09a79/1HrZFBGfz0uf1ILVmVuVwA?u=https://www.qpwblaw.com/
Michael J. Barker
|
Partner
Quintairos, Prieto, Wood & Boyer, P.A.
12428 San Jose Blvd., Suite 1
,
Jacksonville
,
FL
32223
Email: mbarker@qpwblaw.commailto:mbarker@qpwblaw.com
Web: https://link.edgepilot.com/s/4fc85814/MedgEnIRj0WqcyrcpoUNqg?u=http://www.qpwblaw.com/https://link.edgepilot.com/s/d2e09a79/1HrZFBGfz0uf1ILVmVuVwA?u=https://www.qpwblaw.com/
Mobile: (904) 226-3660tel:(904)%20226-3660
Arizona ◆ California ◆ Colorado ◆ Florida ◆ Georgia ◆ Illinois ◆ Indiana ◆ Kentucky ◆ Louisiana ◆ Maryland ◆ Massachusetts
Michigan ◆ Mississippi ◆ Nevada ◆ New Jersey ◆ New York ◆ Rhode Island ◆ Tennessee ◆ Texas ◆ USVI
NOTICE: Quintairos, Prieto, Wood & Boyer, P. A. is a debt collector and any information obtained may be used for that purpose. This e-mail message and any attachment to this e-mail message contains confidential information that may be legally privileged. If you are not the intended recipient, you must not review, retransmit, convert to hard copy, copy, use or disseminate this e-mail or any attachments to it. If you received this e-mail in error, please notify us immediately by return e-mail or by telephone at (855)287-0240 and delete this message. Please note that if this e-mail message contains a forwarded message or is a reply to a prior message, some or all of the contents of this message or any attachments may not have been produced by Quintairos, Prieto Wood & Boyer, P. A.
Boyd & Jenerette utilizes spam and junk email filtration applications in its email information systems. These systems may prevent or delay delivery of certain email communications. If you do not receive a timely response to an email communication, please contact the intended recipient via phone.
CONFIDENTIALITY NOTICE: The information and all attachments contained in this electronic communication are legally privileged and confidential information, subject to the attorney-client privilege and intended only for the use of the intended recipients. If the reader of this message is not an intended recipient, you are hereby notified that any review, use, dissemination, distribution, or copying of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately of the error by return email and please permanently remove any copies of this message from your system and do not retain any copies, whether in electronic or physical form or otherwise.
I agree that the action under 713.21 is not the least expensive path. I was saying the notice of contest of lien is the least expensive path at least for the first 60 days to see if lienor files suit. If no suit is filed, the lender and the title insurer that issued the loan policy should be satisfied that title is clear and no further action is necessary to resolve the lien. Lender can order a title update to reflect that in its file upon the expiration of the 60 days. If I was repping the lender, I would want the owner to sign the notice of contest of lien in any event to avoid any challenge to the assignment or the validity of the notice. Lenders are not typically looking to jump in and spend money so they may have been burned in another matter. I would reach out and see if owner can start a discussion to lay out this plan and see if lender will agree knowing that they reserve their rights to take action if necessary. It will always be less expensive for the borrower if they are able to finance the challenge directly through their own counsel instead of not having direct contact with lender’s counsel and being stuck with the fees and costs being added to the loan balance later. There is always the transfer to bond option to satisfy the lender and clear the cloud on title, but I would still try the notice of contest first.
[cid:image001.jpg@01D9B97B.9373B510]
Sherry A. Lambson-Eisele
Partner- Business Litigation Practice Group Leader
Boyd & Jenerette, P.A.
2290 Lucien Way, Suite 260
Maitland, FL 32751
Office: (407) 309-4760 x621
Direct: (407) 309-4758
Cell: (407) 405-8801
www.boydjen.comhttp://www.boydjen.com
Download vCardhttp://www.boydjen.com/wp-content/uploads/2019/05/Sherry-A-Eisele.vcf
From: clc-discussion-bounces@lists.flabarrpptl.org clc-discussion-bounces@lists.flabarrpptl.org On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, July 18, 2023 12:21 PM
To: 'clc-discussion@lists.flabarrpptl.org' clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
I agree generally, but I don’t think an action under 713.21 is the least expensive path – probably the most, which is why I was wondering about the recording sequence. And I don’t know that the lender can assert the Owner’s rights under 713.21 absent some assignment from the Borrower – which may very well be in the loan documents and is suggested below, but just an assignment of the right to defend title may be insufficient. I think it would probably have to be explicit and specific. The lender has little collateral risk if the order is right (unless they’re very concerned about the borrower), but is at risk if the NOC was first. And if the order is wrong (NOC first), given the lender’s recording duty under 713.13(7), the cost of fixing it should be on the lender and not the borrower.
Bruce Partington | Shareholder
Board Certified Specialist in Construction Law
bpartington@clarkpartington.commailto:bpartington@clarkpartington.com | (850) 432-1399
CLARK PARTINGTON
Office: (850) 434-9200 | Fax: (850) 432-7340
125 East Intendencia Street, 4th Floor
Pensacola, Florida 32502
clarkpartington.comhttps://link.edgepilot.com/s/92126afc/WsZBM15FE0u7lTB9L4P-wA?u=https://clarkpartington.com/
[cid:image003.jpg@01D9B97B.9373B510]https://link.edgepilot.com/s/22116e74/_rAUk1UKy0ChSeE8cSc20Q?u=http://clarkpartington.com/
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, July 18, 2023 10:24 AM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Notwithstanding the date of the NOC, the Lender is entitled and should be taking steps to protect the collateral pledged to secure the debt if necessary and to cure any clouds on title to its collateral. The problem is that they will add all their fees and costs to the borrower’s balance. I would encourage the Lender to first file a notice of contest of lien to keep the costs low because if the lienor does not file suit within 60 days, then the cloud on title is cured without the need to file suit. This is the least expensive approach. The owner should separately send the demand for sworn statement to Lienor in the meantime. I do not think the lender can send the demand for sworn statement but there may be a case that says Lender can do so when the CLA or other loan documents assign rights to the lender to challenge any liens.
If the NOC was recorded before the mortgage, I would argue for owner that the fees and costs are mostly the lender’s problem to protect their priority which is not the borrower’s problem. There may be a title claim for lender if the NOC was really recorded earlier and fees should be borne by the title insurer if that is the case after Lender makes a title claim. But it is more likely that Lender is simply taking action to protect their collateral so I would anticipate that fees and costs will be added to the borrower’s balance. So, it is still in borrower’s best interest for Lender to take least expensive approach to eliminate the lien.
[cid:image005.jpg@01D9B97B.9373B510]
Sherry A. Lambson-Eisele
Partner- Business Litigation Practice Group Leader
Boyd & Jenerette, P.A.
2290 Lucien Way, Suite 260
Maitland, FL 32751
Office: (407) 309-4760 x621
Direct: (407) 309-4758
Cell: (407) 405-8801
https://link.edgepilot.com/s/66b1d1b6/ng0DIJUrpkKO5DO8ceU7Lw?u=http://www.boydjen.com/
Download vCardhttps://link.edgepilot.com/s/b306433c/6LLdAOXadEq84sSGG3fnCQ?u=http://www.boydjen.com/wp-content/uploads/2019/05/Sherry-A-Eisele.vcf
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Monday, July 17, 2023 6:09 PM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Was the notice of commencement recorded before the mortgage, perhaps? That would get the lender really interested.
Bruce Partington | Shareholder
Board Certified Specialist in Construction Law
bpartington@clarkpartington.commailto:bpartington@clarkpartington.com | (850) 432-1399
CLARK PARTINGTON
Office: (850) 434-9200 | Fax: (850) 432-7340
125 East Intendencia Street, 4th Floor
Pensacola, Florida 32502
clarkpartington.comhttps://link.edgepilot.com/s/a2b769b4/aGv3ZCTdG0uvSPKMsyhMrw?u=https://clarkpartington.com/
[cid:image003.jpg@01D9B97B.9373B510]https://link.edgepilot.com/s/38ae2f25/dQL9OmyJ30_NwuS3BGN4WQ?u=http://clarkpartington.com/
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Monday, July 17, 2023 4:56 PM
To: clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Hi everyone. Hope all are well.
I have an issue that has come up that I have not encountered before that involves a construction mortgage lender asserting the rights of the owner under 713.21 and 713.31.
Lender and Owner / Borrower are not adverse (obviously, always the potential for conflict between a Lender and Borrower).
Lender was granted an assignment of Owner’s right to defend title to the real property to protect the lien granted under the Mortgage.
Contractor has filed a lien that is invalid on its face. Contractor blew 90 days by a mile.
Lender wants to have the lien discharged under a 713.21 action and also include an action under 713.31. I have handled these claims many times but the Plaintiff was always the Owner.
I have never seen a scenario where the Lender wanted to contest the lien on its own accord, which it has the right to do under the language in the mortgage.
Has anyone ever dealt with this. Seems straight forward but again, first time I have done it from the context of a lender asserting claim.
Any insight would be greatly appreciated.
Thanks all.
[cid:image006.jpg@01D9B97B.9373B510]https://link.edgepilot.com/s/d2e09a79/1HrZFBGfz0uf1ILVmVuVwA?u=https://www.qpwblaw.com/
Michael J. Barker
|
Partner
Quintairos, Prieto, Wood & Boyer, P.A.
12428 San Jose Blvd., Suite 1
,
Jacksonville
,
FL
32223
Email: mbarker@qpwblaw.commailto:mbarker@qpwblaw.com
Web: https://link.edgepilot.com/s/4fc85814/MedgEnIRj0WqcyrcpoUNqg?u=http://www.qpwblaw.com/https://link.edgepilot.com/s/d2e09a79/1HrZFBGfz0uf1ILVmVuVwA?u=https://www.qpwblaw.com/
Mobile: (904) 226-3660tel:(904)%20226-3660
Arizona ◆ California ◆ Colorado ◆ Florida ◆ Georgia ◆ Illinois ◆ Indiana ◆ Kentucky ◆ Louisiana ◆ Maryland ◆ Massachusetts
Michigan ◆ Mississippi ◆ Nevada ◆ New Jersey ◆ New York ◆ Rhode Island ◆ Tennessee ◆ Texas ◆ USVI
NOTICE: Quintairos, Prieto, Wood & Boyer, P. A. is a debt collector and any information obtained may be used for that purpose. This e-mail message and any attachment to this e-mail message contains confidential information that may be legally privileged. If you are not the intended recipient, you must not review, retransmit, convert to hard copy, copy, use or disseminate this e-mail or any attachments to it. If you received this e-mail in error, please notify us immediately by return e-mail or by telephone at (855)287-0240 and delete this message. Please note that if this e-mail message contains a forwarded message or is a reply to a prior message, some or all of the contents of this message or any attachments may not have been produced by Quintairos, Prieto Wood & Boyer, P. A.
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Boyd & Jenerette utilizes spam and junk email filtration applications in its email information systems. These systems may prevent or delay delivery of certain email communications. If you do not receive a timely response to an email communication, please contact the intended recipient via phone.
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I’m not sure that 713.22 would allow anyone other than the Owner to file a Notice of Contest of Lien. 713.22 provides the “Owner” with the right to file the Notice of Contest. “Owner” is defined in 713.01(23) as: “Owner” means a person who is the owner of any legal or equitable interest in real property, which interest can be sold by legal process, and who enters into a contract for the improvement of the real property”. This section does not provide for a right of Assignment of rights under 713 that inure to the “Owner”. I don’t believe the Legislature intended for anyone other than the “Owner” itself to undertake a process that would put into motion a foreclosure against the Owner’s title to the property. I haven’t seen case law on this issue, but I believe the Notice of Contest under 713.22 is a non-assignable process available only to the “Owner”.
Interestingly, 713.21(4) allows the Show Cause Proceeding to be initiated “Upon filing a complaint therefor by any interested party”.
Scott S. Sheffler, Esquire
Worman & Sheffler, P.A.
2600 Lake Lucien Drive, Suite 405
Maitland, Florida 32751
Phone: (407) 843-5353, ext. 208
Fax: (407) 841-9516
Website: www.wormanlaw.comhttp://www.wormanlaw.com/
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From: clc-discussion-bounces@lists.flabarrpptl.org clc-discussion-bounces@lists.flabarrpptl.org On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, July 18, 2023 1:43 PM
To: 'clc-discussion@lists.flabarrpptl.org' clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
I agree that the action under 713.21 is not the least expensive path. I was saying the notice of contest of lien is the least expensive path at least for the first 60 days to see if lienor files suit. If no suit is filed, the lender and the title insurer that issued the loan policy should be satisfied that title is clear and no further action is necessary to resolve the lien. Lender can order a title update to reflect that in its file upon the expiration of the 60 days. If I was repping the lender, I would want the owner to sign the notice of contest of lien in any event to avoid any challenge to the assignment or the validity of the notice. Lenders are not typically looking to jump in and spend money so they may have been burned in another matter. I would reach out and see if owner can start a discussion to lay out this plan and see if lender will agree knowing that they reserve their rights to take action if necessary. It will always be less expensive for the borrower if they are able to finance the challenge directly through their own counsel instead of not having direct contact with lender’s counsel and being stuck with the fees and costs being added to the loan balance later. There is always the transfer to bond option to satisfy the lender and clear the cloud on title, but I would still try the notice of contest first.
[cid:image001.jpg@01D9B981.97105510]
Sherry A. Lambson-Eisele
Partner- Business Litigation Practice Group Leader
Boyd & Jenerette, P.A.
2290 Lucien Way, Suite 260
Maitland, FL 32751
Office: (407) 309-4760 x621
Direct: (407) 309-4758
Cell: (407) 405-8801
www.boydjen.comhttp://www.boydjen.com/
Download vCardhttp://www.boydjen.com/wp-content/uploads/2019/05/Sherry-A-Eisele.vcf
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, July 18, 2023 12:21 PM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
I agree generally, but I don’t think an action under 713.21 is the least expensive path – probably the most, which is why I was wondering about the recording sequence. And I don’t know that the lender can assert the Owner’s rights under 713.21 absent some assignment from the Borrower – which may very well be in the loan documents and is suggested below, but just an assignment of the right to defend title may be insufficient. I think it would probably have to be explicit and specific. The lender has little collateral risk if the order is right (unless they’re very concerned about the borrower), but is at risk if the NOC was first. And if the order is wrong (NOC first), given the lender’s recording duty under 713.13(7), the cost of fixing it should be on the lender and not the borrower.
Bruce Partington | Shareholder
Board Certified Specialist in Construction Law
bpartington@clarkpartington.commailto:bpartington@clarkpartington.com | (850) 432-1399
CLARK PARTINGTON
Office: (850) 434-9200 | Fax: (850) 432-7340
125 East Intendencia Street, 4th Floor
Pensacola, Florida 32502
clarkpartington.comhttps://link.edgepilot.com/s/92126afc/WsZBM15FE0u7lTB9L4P-wA?u=https://clarkpartington.com/
[cid:image002.jpg@01D9B981.97105510]https://link.edgepilot.com/s/22116e74/_rAUk1UKy0ChSeE8cSc20Q?u=http://clarkpartington.com/
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, July 18, 2023 10:24 AM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Notwithstanding the date of the NOC, the Lender is entitled and should be taking steps to protect the collateral pledged to secure the debt if necessary and to cure any clouds on title to its collateral. The problem is that they will add all their fees and costs to the borrower’s balance. I would encourage the Lender to first file a notice of contest of lien to keep the costs low because if the lienor does not file suit within 60 days, then the cloud on title is cured without the need to file suit. This is the least expensive approach. The owner should separately send the demand for sworn statement to Lienor in the meantime. I do not think the lender can send the demand for sworn statement but there may be a case that says Lender can do so when the CLA or other loan documents assign rights to the lender to challenge any liens.
If the NOC was recorded before the mortgage, I would argue for owner that the fees and costs are mostly the lender’s problem to protect their priority which is not the borrower’s problem. There may be a title claim for lender if the NOC was really recorded earlier and fees should be borne by the title insurer if that is the case after Lender makes a title claim. But it is more likely that Lender is simply taking action to protect their collateral so I would anticipate that fees and costs will be added to the borrower’s balance. So, it is still in borrower’s best interest for Lender to take least expensive approach to eliminate the lien.
[cid:image003.jpg@01D9B981.97105510]
Sherry A. Lambson-Eisele
Partner- Business Litigation Practice Group Leader
Boyd & Jenerette, P.A.
2290 Lucien Way, Suite 260
Maitland, FL 32751
Office: (407) 309-4760 x621
Direct: (407) 309-4758
Cell: (407) 405-8801
https://link.edgepilot.com/s/66b1d1b6/ng0DIJUrpkKO5DO8ceU7Lw?u=http://www.boydjen.com/
Download vCardhttps://link.edgepilot.com/s/b306433c/6LLdAOXadEq84sSGG3fnCQ?u=http://www.boydjen.com/wp-content/uploads/2019/05/Sherry-A-Eisele.vcf
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Monday, July 17, 2023 6:09 PM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Was the notice of commencement recorded before the mortgage, perhaps? That would get the lender really interested.
Bruce Partington | Shareholder
Board Certified Specialist in Construction Law
bpartington@clarkpartington.commailto:bpartington@clarkpartington.com | (850) 432-1399
CLARK PARTINGTON
Office: (850) 434-9200 | Fax: (850) 432-7340
125 East Intendencia Street, 4th Floor
Pensacola, Florida 32502
clarkpartington.comhttps://link.edgepilot.com/s/a2b769b4/aGv3ZCTdG0uvSPKMsyhMrw?u=https://clarkpartington.com/
[cid:image002.jpg@01D9B981.97105510]https://link.edgepilot.com/s/38ae2f25/dQL9OmyJ30_NwuS3BGN4WQ?u=http://clarkpartington.com/
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Monday, July 17, 2023 4:56 PM
To: clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Hi everyone. Hope all are well.
I have an issue that has come up that I have not encountered before that involves a construction mortgage lender asserting the rights of the owner under 713.21 and 713.31.
Lender and Owner / Borrower are not adverse (obviously, always the potential for conflict between a Lender and Borrower).
Lender was granted an assignment of Owner’s right to defend title to the real property to protect the lien granted under the Mortgage.
Contractor has filed a lien that is invalid on its face. Contractor blew 90 days by a mile.
Lender wants to have the lien discharged under a 713.21 action and also include an action under 713.31. I have handled these claims many times but the Plaintiff was always the Owner.
I have never seen a scenario where the Lender wanted to contest the lien on its own accord, which it has the right to do under the language in the mortgage.
Has anyone ever dealt with this. Seems straight forward but again, first time I have done it from the context of a lender asserting claim.
Any insight would be greatly appreciated.
Thanks all.
[cid:image004.jpg@01D9B981.97105510]https://link.edgepilot.com/s/d2e09a79/1HrZFBGfz0uf1ILVmVuVwA?u=https://www.qpwblaw.com/
Michael J. Barker
|
Partner
Quintairos, Prieto, Wood & Boyer, P.A.
12428 San Jose Blvd., Suite 1
,
Jacksonville
,
FL
32223
Email: mbarker@qpwblaw.commailto:mbarker@qpwblaw.com
Web: https://link.edgepilot.com/s/4fc85814/MedgEnIRj0WqcyrcpoUNqg?u=http://www.qpwblaw.com/https://link.edgepilot.com/s/d2e09a79/1HrZFBGfz0uf1ILVmVuVwA?u=https://www.qpwblaw.com/
Mobile: (904) 226-3660tel:(904)%20226-3660
Arizona ◆ California ◆ Colorado ◆ Florida ◆ Georgia ◆ Illinois ◆ Indiana ◆ Kentucky ◆ Louisiana ◆ Maryland ◆ Massachusetts
Michigan ◆ Mississippi ◆ Nevada ◆ New Jersey ◆ New York ◆ Rhode Island ◆ Tennessee ◆ Texas ◆ USVI
NOTICE: Quintairos, Prieto, Wood & Boyer, P. A. is a debt collector and any information obtained may be used for that purpose. This e-mail message and any attachment to this e-mail message contains confidential information that may be legally privileged. If you are not the intended recipient, you must not review, retransmit, convert to hard copy, copy, use or disseminate this e-mail or any attachments to it. If you received this e-mail in error, please notify us immediately by return e-mail or by telephone at (855)287-0240 and delete this message. Please note that if this e-mail message contains a forwarded message or is a reply to a prior message, some or all of the contents of this message or any attachments may not have been produced by Quintairos, Prieto Wood & Boyer, P. A.
Boyd & Jenerette utilizes spam and junk email filtration applications in its email information systems. These systems may prevent or delay delivery of certain email communications. If you do not receive a timely response to an email communication, please contact the intended recipient via phone.
CONFIDENTIALITY NOTICE: The information and all attachments contained in this electronic communication are legally privileged and confidential information, subject to the attorney-client privilege and intended only for the use of the intended recipients. If the reader of this message is not an intended recipient, you are hereby notified that any review, use, dissemination, distribution, or copying of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately of the error by return email and please permanently remove any copies of this message from your system and do not retain any copies, whether in electronic or physical form or otherwise.
Boyd & Jenerette utilizes spam and junk email filtration applications in its email information systems. These systems may prevent or delay delivery of certain email communications. If you do not receive a timely response to an email communication, please contact the intended recipient via phone.
CONFIDENTIALITY NOTICE: The information and all attachments contained in this electronic communication are legally privileged and confidential information, subject to the attorney-client privilege and intended only for the use of the intended recipients. If the reader of this message is not an intended recipient, you are hereby notified that any review, use, dissemination, distribution, or copying of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately of the error by return email and please permanently remove any copies of this message from your system and do not retain any copies, whether in electronic or physical form or otherwise.
A show cause order is even faster…..and allows for fees.
From: clc-discussion-bounces@lists.flabarrpptl.org clc-discussion-bounces@lists.flabarrpptl.org On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, July 18, 2023 1:43 PM
To: 'clc-discussion@lists.flabarrpptl.org' clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
I agree that the action under 713.21 is not the least expensive path. I was saying the notice of contest of lien is the least expensive path at least for the first 60 days to see if lienor files suit. If no suit is filed, the lender and the title insurer that issued the loan policy should be satisfied that title is clear and no further action is necessary to resolve the lien. Lender can order a title update to reflect that in its file upon the expiration of the 60 days. If I was repping the lender, I would want the owner to sign the notice of contest of lien in any event to avoid any challenge to the assignment or the validity of the notice. Lenders are not typically looking to jump in and spend money so they may have been burned in another matter. I would reach out and see if owner can start a discussion to lay out this plan and see if lender will agree knowing that they reserve their rights to take action if necessary. It will always be less expensive for the borrower if they are able to finance the challenge directly through their own counsel instead of not having direct contact with lender’s counsel and being stuck with the fees and costs being added to the loan balance later. There is always the transfer to bond option to satisfy the lender and clear the cloud on title, but I would still try the notice of contest first.
[cid:image001.jpg@01D9BA54.8FB0FB20]
Sherry A. Lambson-Eisele
Partner- Business Litigation Practice Group Leader
Boyd & Jenerette, P.A.
2290 Lucien Way, Suite 260
Maitland, FL 32751
Office: (407) 309-4760 x621
Direct: (407) 309-4758
Cell: (407) 405-8801
www.boydjen.comhttp://www.boydjen.com/
Download vCardhttp://www.boydjen.com/wp-content/uploads/2019/05/Sherry-A-Eisele.vcf
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, July 18, 2023 12:21 PM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
I agree generally, but I don’t think an action under 713.21 is the least expensive path – probably the most, which is why I was wondering about the recording sequence. And I don’t know that the lender can assert the Owner’s rights under 713.21 absent some assignment from the Borrower – which may very well be in the loan documents and is suggested below, but just an assignment of the right to defend title may be insufficient. I think it would probably have to be explicit and specific. The lender has little collateral risk if the order is right (unless they’re very concerned about the borrower), but is at risk if the NOC was first. And if the order is wrong (NOC first), given the lender’s recording duty under 713.13(7), the cost of fixing it should be on the lender and not the borrower.
Bruce Partington | Shareholder
Board Certified Specialist in Construction Law
bpartington@clarkpartington.commailto:bpartington@clarkpartington.com | (850) 432-1399
CLARK PARTINGTON
Office: (850) 434-9200 | Fax: (850) 432-7340
125 East Intendencia Street, 4th Floor
Pensacola, Florida 32502
clarkpartington.comhttps://link.edgepilot.com/s/92126afc/WsZBM15FE0u7lTB9L4P-wA?u=https://clarkpartington.com/
[cid:image002.jpg@01D9BA54.8FB0FB20]https://link.edgepilot.com/s/22116e74/_rAUk1UKy0ChSeE8cSc20Q?u=http://clarkpartington.com/
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, July 18, 2023 10:24 AM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Notwithstanding the date of the NOC, the Lender is entitled and should be taking steps to protect the collateral pledged to secure the debt if necessary and to cure any clouds on title to its collateral. The problem is that they will add all their fees and costs to the borrower’s balance. I would encourage the Lender to first file a notice of contest of lien to keep the costs low because if the lienor does not file suit within 60 days, then the cloud on title is cured without the need to file suit. This is the least expensive approach. The owner should separately send the demand for sworn statement to Lienor in the meantime. I do not think the lender can send the demand for sworn statement but there may be a case that says Lender can do so when the CLA or other loan documents assign rights to the lender to challenge any liens.
If the NOC was recorded before the mortgage, I would argue for owner that the fees and costs are mostly the lender’s problem to protect their priority which is not the borrower’s problem. There may be a title claim for lender if the NOC was really recorded earlier and fees should be borne by the title insurer if that is the case after Lender makes a title claim. But it is more likely that Lender is simply taking action to protect their collateral so I would anticipate that fees and costs will be added to the borrower’s balance. So, it is still in borrower’s best interest for Lender to take least expensive approach to eliminate the lien.
[cid:image003.jpg@01D9BA54.8FB0FB20]
Sherry A. Lambson-Eisele
Partner- Business Litigation Practice Group Leader
Boyd & Jenerette, P.A.
2290 Lucien Way, Suite 260
Maitland, FL 32751
Office: (407) 309-4760 x621
Direct: (407) 309-4758
Cell: (407) 405-8801
https://link.edgepilot.com/s/66b1d1b6/ng0DIJUrpkKO5DO8ceU7Lw?u=http://www.boydjen.com/
Download vCardhttps://link.edgepilot.com/s/b306433c/6LLdAOXadEq84sSGG3fnCQ?u=http://www.boydjen.com/wp-content/uploads/2019/05/Sherry-A-Eisele.vcf
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Monday, July 17, 2023 6:09 PM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Was the notice of commencement recorded before the mortgage, perhaps? That would get the lender really interested.
Bruce Partington | Shareholder
Board Certified Specialist in Construction Law
bpartington@clarkpartington.commailto:bpartington@clarkpartington.com | (850) 432-1399
CLARK PARTINGTON
Office: (850) 434-9200 | Fax: (850) 432-7340
125 East Intendencia Street, 4th Floor
Pensacola, Florida 32502
clarkpartington.comhttps://link.edgepilot.com/s/a2b769b4/aGv3ZCTdG0uvSPKMsyhMrw?u=https://clarkpartington.com/
[cid:image002.jpg@01D9BA54.8FB0FB20]https://link.edgepilot.com/s/38ae2f25/dQL9OmyJ30_NwuS3BGN4WQ?u=http://clarkpartington.com/
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Monday, July 17, 2023 4:56 PM
To: clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Hi everyone. Hope all are well.
I have an issue that has come up that I have not encountered before that involves a construction mortgage lender asserting the rights of the owner under 713.21 and 713.31.
Lender and Owner / Borrower are not adverse (obviously, always the potential for conflict between a Lender and Borrower).
Lender was granted an assignment of Owner’s right to defend title to the real property to protect the lien granted under the Mortgage.
Contractor has filed a lien that is invalid on its face. Contractor blew 90 days by a mile.
Lender wants to have the lien discharged under a 713.21 action and also include an action under 713.31. I have handled these claims many times but the Plaintiff was always the Owner.
I have never seen a scenario where the Lender wanted to contest the lien on its own accord, which it has the right to do under the language in the mortgage.
Has anyone ever dealt with this. Seems straight forward but again, first time I have done it from the context of a lender asserting claim.
Any insight would be greatly appreciated.
Thanks all.
[cid:image004.jpg@01D9BA54.8FB0FB20]https://link.edgepilot.com/s/d2e09a79/1HrZFBGfz0uf1ILVmVuVwA?u=https://www.qpwblaw.com/
Michael J. Barker
|
Partner
Quintairos, Prieto, Wood & Boyer, P.A.
12428 San Jose Blvd., Suite 1
,
Jacksonville
,
FL
32223
Email: mbarker@qpwblaw.commailto:mbarker@qpwblaw.com
Web: https://link.edgepilot.com/s/4fc85814/MedgEnIRj0WqcyrcpoUNqg?u=http://www.qpwblaw.com/https://link.edgepilot.com/s/d2e09a79/1HrZFBGfz0uf1ILVmVuVwA?u=https://www.qpwblaw.com/
Mobile: (904) 226-3660tel:(904)%20226-3660
Arizona ◆ California ◆ Colorado ◆ Florida ◆ Georgia ◆ Illinois ◆ Indiana ◆ Kentucky ◆ Louisiana ◆ Maryland ◆ Massachusetts
Michigan ◆ Mississippi ◆ Nevada ◆ New Jersey ◆ New York ◆ Rhode Island ◆ Tennessee ◆ Texas ◆ USVI
NOTICE: Quintairos, Prieto, Wood & Boyer, P. A. is a debt collector and any information obtained may be used for that purpose. This e-mail message and any attachment to this e-mail message contains confidential information that may be legally privileged. If you are not the intended recipient, you must not review, retransmit, convert to hard copy, copy, use or disseminate this e-mail or any attachments to it. If you received this e-mail in error, please notify us immediately by return e-mail or by telephone at (855)287-0240 and delete this message. Please note that if this e-mail message contains a forwarded message or is a reply to a prior message, some or all of the contents of this message or any attachments may not have been produced by Quintairos, Prieto Wood & Boyer, P. A.
Boyd & Jenerette utilizes spam and junk email filtration applications in its email information systems. These systems may prevent or delay delivery of certain email communications. If you do not receive a timely response to an email communication, please contact the intended recipient via phone.
CONFIDENTIALITY NOTICE: The information and all attachments contained in this electronic communication are legally privileged and confidential information, subject to the attorney-client privilege and intended only for the use of the intended recipients. If the reader of this message is not an intended recipient, you are hereby notified that any review, use, dissemination, distribution, or copying of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately of the error by return email and please permanently remove any copies of this message from your system and do not retain any copies, whether in electronic or physical form or otherwise.
Boyd & Jenerette utilizes spam and junk email filtration applications in its email information systems. These systems may prevent or delay delivery of certain email communications. If you do not receive a timely response to an email communication, please contact the intended recipient via phone.
CONFIDENTIALITY NOTICE: The information and all attachments contained in this electronic communication are legally privileged and confidential information, subject to the attorney-client privilege and intended only for the use of the intended recipients. If the reader of this message is not an intended recipient, you are hereby notified that any review, use, dissemination, distribution, or copying of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately of the error by return email and please permanently remove any copies of this message from your system and do not retain any copies, whether in electronic or physical form or otherwise.
My understanding is that the show cause complaint under 713.21 does not allow for fees; 713.21 doesn’t mention fees, and 713.29 only provides for fees “in any action brought to enforce a lien or to enforce a claim against a bond[.]” If the lienor never files a lawsuit, there’s no action “to enforce a lien.” If you want fees, you would need to pair the 713.21 claim with a 713.31 claim for fraudulent lien.
Happy to be proven wrong, though.
Ryan P. Sullivan, Esq.
Florida Bar Board Certified – Construction Law
Niesen|Price|Worthy|Campo, PA
5216 SW 91st Drive | Gainesville, FL 32608
(352) 373-9031 | ryan@npw-law.commailto:ryan@npw-law.com
Websitehttps://npw-law.com/legal-team/ryan-sullivan/ | LinkedInhttps://www.linkedin.com/in/ryan-p-sullivan-b0081276/ | Florida Barhttps://www.floridabar.org/mybarprofile/124534
[cid:image005.png@01D9BAF2.0430A890]http://www.npw-law.com/ [cid:image006.png@01D9BAF2.0430A890]
Unless advised to the contrary, I assume all emails are reviewed one business day after they are sent. This communication is intended for the sole use of the individual or entity to which it is addressed and may contain information that is privileged, confidential, and/or exempt from disclosure under applicable law. If the reader of this communication is not the intended recipient, or the employee or agent responsible for delivering the message to the intended recipient, you are hereby notified that any review, dissemination, distribution, or copying of this communication is strictly prohibited. If you have received this communication in error, please immediately notify me by telephone, delete this communication, and destroy any copies of it. Thank you.
From: clc-discussion-bounces@lists.flabarrpptl.org clc-discussion-bounces@lists.flabarrpptl.org On Behalf Of RPPTL CLC-Discussion
Sent: Wednesday, July 19, 2023 3:21 PM
To: clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
A show cause order is even faster…..and allows for fees.
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, July 18, 2023 1:43 PM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
I agree that the action under 713.21 is not the least expensive path. I was saying the notice of contest of lien is the least expensive path at least for the first 60 days to see if lienor files suit. If no suit is filed, the lender and the title insurer that issued the loan policy should be satisfied that title is clear and no further action is necessary to resolve the lien. Lender can order a title update to reflect that in its file upon the expiration of the 60 days. If I was repping the lender, I would want the owner to sign the notice of contest of lien in any event to avoid any challenge to the assignment or the validity of the notice. Lenders are not typically looking to jump in and spend money so they may have been burned in another matter. I would reach out and see if owner can start a discussion to lay out this plan and see if lender will agree knowing that they reserve their rights to take action if necessary. It will always be less expensive for the borrower if they are able to finance the challenge directly through their own counsel instead of not having direct contact with lender’s counsel and being stuck with the fees and costs being added to the loan balance later. There is always the transfer to bond option to satisfy the lender and clear the cloud on title, but I would still try the notice of contest first.
[cid:image007.jpg@01D9BAF2.0430A890]
Sherry A. Lambson-Eisele
Partner- Business Litigation Practice Group Leader
Boyd & Jenerette, P.A.
2290 Lucien Way, Suite 260
Maitland, FL 32751
Office: (407) 309-4760 x621
Direct: (407) 309-4758
Cell: (407) 405-8801
www.boydjen.comhttp://www.boydjen.com/
Download vCardhttp://www.boydjen.com/wp-content/uploads/2019/05/Sherry-A-Eisele.vcf
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, July 18, 2023 12:21 PM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
I agree generally, but I don’t think an action under 713.21 is the least expensive path – probably the most, which is why I was wondering about the recording sequence. And I don’t know that the lender can assert the Owner’s rights under 713.21 absent some assignment from the Borrower – which may very well be in the loan documents and is suggested below, but just an assignment of the right to defend title may be insufficient. I think it would probably have to be explicit and specific. The lender has little collateral risk if the order is right (unless they’re very concerned about the borrower), but is at risk if the NOC was first. And if the order is wrong (NOC first), given the lender’s recording duty under 713.13(7), the cost of fixing it should be on the lender and not the borrower.
Bruce Partington | Shareholder
Board Certified Specialist in Construction Law
bpartington@clarkpartington.commailto:bpartington@clarkpartington.com | (850) 432-1399
CLARK PARTINGTON
Office: (850) 434-9200 | Fax: (850) 432-7340
125 East Intendencia Street, 4th Floor
Pensacola, Florida 32502
clarkpartington.comhttps://link.edgepilot.com/s/92126afc/WsZBM15FE0u7lTB9L4P-wA?u=https://clarkpartington.com/
[cid:image008.jpg@01D9BAF2.0430A890]https://link.edgepilot.com/s/22116e74/_rAUk1UKy0ChSeE8cSc20Q?u=http://clarkpartington.com/
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, July 18, 2023 10:24 AM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Notwithstanding the date of the NOC, the Lender is entitled and should be taking steps to protect the collateral pledged to secure the debt if necessary and to cure any clouds on title to its collateral. The problem is that they will add all their fees and costs to the borrower’s balance. I would encourage the Lender to first file a notice of contest of lien to keep the costs low because if the lienor does not file suit within 60 days, then the cloud on title is cured without the need to file suit. This is the least expensive approach. The owner should separately send the demand for sworn statement to Lienor in the meantime. I do not think the lender can send the demand for sworn statement but there may be a case that says Lender can do so when the CLA or other loan documents assign rights to the lender to challenge any liens.
If the NOC was recorded before the mortgage, I would argue for owner that the fees and costs are mostly the lender’s problem to protect their priority which is not the borrower’s problem. There may be a title claim for lender if the NOC was really recorded earlier and fees should be borne by the title insurer if that is the case after Lender makes a title claim. But it is more likely that Lender is simply taking action to protect their collateral so I would anticipate that fees and costs will be added to the borrower’s balance. So, it is still in borrower’s best interest for Lender to take least expensive approach to eliminate the lien.
[cid:image009.jpg@01D9BAF2.0430A890]
Sherry A. Lambson-Eisele
Partner- Business Litigation Practice Group Leader
Boyd & Jenerette, P.A.
2290 Lucien Way, Suite 260
Maitland, FL 32751
Office: (407) 309-4760 x621
Direct: (407) 309-4758
Cell: (407) 405-8801
https://link.edgepilot.com/s/66b1d1b6/ng0DIJUrpkKO5DO8ceU7Lw?u=http://www.boydjen.com/
Download vCardhttps://link.edgepilot.com/s/b306433c/6LLdAOXadEq84sSGG3fnCQ?u=http://www.boydjen.com/wp-content/uploads/2019/05/Sherry-A-Eisele.vcf
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Monday, July 17, 2023 6:09 PM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Was the notice of commencement recorded before the mortgage, perhaps? That would get the lender really interested.
Bruce Partington | Shareholder
Board Certified Specialist in Construction Law
bpartington@clarkpartington.commailto:bpartington@clarkpartington.com | (850) 432-1399
CLARK PARTINGTON
Office: (850) 434-9200 | Fax: (850) 432-7340
125 East Intendencia Street, 4th Floor
Pensacola, Florida 32502
clarkpartington.comhttps://link.edgepilot.com/s/a2b769b4/aGv3ZCTdG0uvSPKMsyhMrw?u=https://clarkpartington.com/
[cid:image008.jpg@01D9BAF2.0430A890]https://link.edgepilot.com/s/38ae2f25/dQL9OmyJ30_NwuS3BGN4WQ?u=http://clarkpartington.com/
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Monday, July 17, 2023 4:56 PM
To: clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Hi everyone. Hope all are well.
I have an issue that has come up that I have not encountered before that involves a construction mortgage lender asserting the rights of the owner under 713.21 and 713.31.
Lender and Owner / Borrower are not adverse (obviously, always the potential for conflict between a Lender and Borrower).
Lender was granted an assignment of Owner’s right to defend title to the real property to protect the lien granted under the Mortgage.
Contractor has filed a lien that is invalid on its face. Contractor blew 90 days by a mile.
Lender wants to have the lien discharged under a 713.21 action and also include an action under 713.31. I have handled these claims many times but the Plaintiff was always the Owner.
I have never seen a scenario where the Lender wanted to contest the lien on its own accord, which it has the right to do under the language in the mortgage.
Has anyone ever dealt with this. Seems straight forward but again, first time I have done it from the context of a lender asserting claim.
Any insight would be greatly appreciated.
Thanks all.
[cid:image010.jpg@01D9BAF2.0430A890]https://link.edgepilot.com/s/d2e09a79/1HrZFBGfz0uf1ILVmVuVwA?u=https://www.qpwblaw.com/
Michael J. Barker
|
Partner
Quintairos, Prieto, Wood & Boyer, P.A.
12428 San Jose Blvd., Suite 1
,
Jacksonville
,
FL
32223
Email: mbarker@qpwblaw.commailto:mbarker@qpwblaw.com
Web: https://link.edgepilot.com/s/4fc85814/MedgEnIRj0WqcyrcpoUNqg?u=http://www.qpwblaw.com/https://link.edgepilot.com/s/d2e09a79/1HrZFBGfz0uf1ILVmVuVwA?u=https://www.qpwblaw.com/
Mobile: (904) 226-3660tel:(904)%20226-3660
Arizona ◆ California ◆ Colorado ◆ Florida ◆ Georgia ◆ Illinois ◆ Indiana ◆ Kentucky ◆ Louisiana ◆ Maryland ◆ Massachusetts
Michigan ◆ Mississippi ◆ Nevada ◆ New Jersey ◆ New York ◆ Rhode Island ◆ Tennessee ◆ Texas ◆ USVI
NOTICE: Quintairos, Prieto, Wood & Boyer, P. A. is a debt collector and any information obtained may be used for that purpose. This e-mail message and any attachment to this e-mail message contains confidential information that may be legally privileged. If you are not the intended recipient, you must not review, retransmit, convert to hard copy, copy, use or disseminate this e-mail or any attachments to it. If you received this e-mail in error, please notify us immediately by return e-mail or by telephone at (855)287-0240 and delete this message. Please note that if this e-mail message contains a forwarded message or is a reply to a prior message, some or all of the contents of this message or any attachments may not have been produced by Quintairos, Prieto Wood & Boyer, P. A.
Boyd & Jenerette utilizes spam and junk email filtration applications in its email information systems. These systems may prevent or delay delivery of certain email communications. If you do not receive a timely response to an email communication, please contact the intended recipient via phone.
CONFIDENTIALITY NOTICE: The information and all attachments contained in this electronic communication are legally privileged and confidential information, subject to the attorney-client privilege and intended only for the use of the intended recipients. If the reader of this message is not an intended recipient, you are hereby notified that any review, use, dissemination, distribution, or copying of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately of the error by return email and please permanently remove any copies of this message from your system and do not retain any copies, whether in electronic or physical form or otherwise.
Boyd & Jenerette utilizes spam and junk email filtration applications in its email information systems. These systems may prevent or delay delivery of certain email communications. If you do not receive a timely response to an email communication, please contact the intended recipient via phone.
CONFIDENTIALITY NOTICE: The information and all attachments contained in this electronic communication are legally privileged and confidential information, subject to the attorney-client privilege and intended only for the use of the intended recipients. If the reader of this message is not an intended recipient, you are hereby notified that any review, use, dissemination, distribution, or copying of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately of the error by return email and please permanently remove any copies of this message from your system and do not retain any copies, whether in electronic or physical form or otherwise.
Read the case law…..and the proceeding is ex parte.
From: clc-discussion-bounces@lists.flabarrpptl.org clc-discussion-bounces@lists.flabarrpptl.org On Behalf Of RPPTL CLC-Discussion
Sent: Thursday, July 20, 2023 10:08 AM
To: clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
My understanding is that the show cause complaint under 713.21 does not allow for fees; 713.21 doesn’t mention fees, and 713.29 only provides for fees “in any action brought to enforce a lien or to enforce a claim against a bond[.]” If the lienor never files a lawsuit, there’s no action “to enforce a lien.” If you want fees, you would need to pair the 713.21 claim with a 713.31 claim for fraudulent lien.
Happy to be proven wrong, though.
Ryan P. Sullivan, Esq.
Florida Bar Board Certified – Construction Law
Niesen|Price|Worthy|Campo, PA
5216 SW 91st Drive | Gainesville, FL 32608
(352) 373-9031 | ryan@npw-law.commailto:ryan@npw-law.com
Websitehttps://npw-law.com/legal-team/ryan-sullivan/ | LinkedInhttps://www.linkedin.com/in/ryan-p-sullivan-b0081276/ | Florida Barhttps://www.floridabar.org/mybarprofile/124534
[cid:image001.png@01D9BAFA.5BB41860]http://www.npw-law.com/ [cid:image002.png@01D9BAFA.5BB41860]
Unless advised to the contrary, I assume all emails are reviewed one business day after they are sent. This communication is intended for the sole use of the individual or entity to which it is addressed and may contain information that is privileged, confidential, and/or exempt from disclosure under applicable law. If the reader of this communication is not the intended recipient, or the employee or agent responsible for delivering the message to the intended recipient, you are hereby notified that any review, dissemination, distribution, or copying of this communication is strictly prohibited. If you have received this communication in error, please immediately notify me by telephone, delete this communication, and destroy any copies of it. Thank you.
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Wednesday, July 19, 2023 3:21 PM
To: clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
A show cause order is even faster…..and allows for fees.
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, July 18, 2023 1:43 PM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
I agree that the action under 713.21 is not the least expensive path. I was saying the notice of contest of lien is the least expensive path at least for the first 60 days to see if lienor files suit. If no suit is filed, the lender and the title insurer that issued the loan policy should be satisfied that title is clear and no further action is necessary to resolve the lien. Lender can order a title update to reflect that in its file upon the expiration of the 60 days. If I was repping the lender, I would want the owner to sign the notice of contest of lien in any event to avoid any challenge to the assignment or the validity of the notice. Lenders are not typically looking to jump in and spend money so they may have been burned in another matter. I would reach out and see if owner can start a discussion to lay out this plan and see if lender will agree knowing that they reserve their rights to take action if necessary. It will always be less expensive for the borrower if they are able to finance the challenge directly through their own counsel instead of not having direct contact with lender’s counsel and being stuck with the fees and costs being added to the loan balance later. There is always the transfer to bond option to satisfy the lender and clear the cloud on title, but I would still try the notice of contest first.
[cid:image003.jpg@01D9BAFA.5BB41860]
Sherry A. Lambson-Eisele
Partner- Business Litigation Practice Group Leader
Boyd & Jenerette, P.A.
2290 Lucien Way, Suite 260
Maitland, FL 32751
Office: (407) 309-4760 x621
Direct: (407) 309-4758
Cell: (407) 405-8801
www.boydjen.comhttp://www.boydjen.com/
Download vCardhttp://www.boydjen.com/wp-content/uploads/2019/05/Sherry-A-Eisele.vcf
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, July 18, 2023 12:21 PM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
I agree generally, but I don’t think an action under 713.21 is the least expensive path – probably the most, which is why I was wondering about the recording sequence. And I don’t know that the lender can assert the Owner’s rights under 713.21 absent some assignment from the Borrower – which may very well be in the loan documents and is suggested below, but just an assignment of the right to defend title may be insufficient. I think it would probably have to be explicit and specific. The lender has little collateral risk if the order is right (unless they’re very concerned about the borrower), but is at risk if the NOC was first. And if the order is wrong (NOC first), given the lender’s recording duty under 713.13(7), the cost of fixing it should be on the lender and not the borrower.
Bruce Partington | Shareholder
Board Certified Specialist in Construction Law
bpartington@clarkpartington.commailto:bpartington@clarkpartington.com | (850) 432-1399
CLARK PARTINGTON
Office: (850) 434-9200 | Fax: (850) 432-7340
125 East Intendencia Street, 4th Floor
Pensacola, Florida 32502
clarkpartington.comhttps://link.edgepilot.com/s/92126afc/WsZBM15FE0u7lTB9L4P-wA?u=https://clarkpartington.com/
[cid:image004.jpg@01D9BAFA.5BB41860]https://link.edgepilot.com/s/22116e74/_rAUk1UKy0ChSeE8cSc20Q?u=http://clarkpartington.com/
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, July 18, 2023 10:24 AM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Notwithstanding the date of the NOC, the Lender is entitled and should be taking steps to protect the collateral pledged to secure the debt if necessary and to cure any clouds on title to its collateral. The problem is that they will add all their fees and costs to the borrower’s balance. I would encourage the Lender to first file a notice of contest of lien to keep the costs low because if the lienor does not file suit within 60 days, then the cloud on title is cured without the need to file suit. This is the least expensive approach. The owner should separately send the demand for sworn statement to Lienor in the meantime. I do not think the lender can send the demand for sworn statement but there may be a case that says Lender can do so when the CLA or other loan documents assign rights to the lender to challenge any liens.
If the NOC was recorded before the mortgage, I would argue for owner that the fees and costs are mostly the lender’s problem to protect their priority which is not the borrower’s problem. There may be a title claim for lender if the NOC was really recorded earlier and fees should be borne by the title insurer if that is the case after Lender makes a title claim. But it is more likely that Lender is simply taking action to protect their collateral so I would anticipate that fees and costs will be added to the borrower’s balance. So, it is still in borrower’s best interest for Lender to take least expensive approach to eliminate the lien.
[cid:image005.jpg@01D9BAFA.5BB41860]
Sherry A. Lambson-Eisele
Partner- Business Litigation Practice Group Leader
Boyd & Jenerette, P.A.
2290 Lucien Way, Suite 260
Maitland, FL 32751
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From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Monday, July 17, 2023 6:09 PM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Was the notice of commencement recorded before the mortgage, perhaps? That would get the lender really interested.
Bruce Partington | Shareholder
Board Certified Specialist in Construction Law
bpartington@clarkpartington.commailto:bpartington@clarkpartington.com | (850) 432-1399
CLARK PARTINGTON
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125 East Intendencia Street, 4th Floor
Pensacola, Florida 32502
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From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Monday, July 17, 2023 4:56 PM
To: clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Hi everyone. Hope all are well.
I have an issue that has come up that I have not encountered before that involves a construction mortgage lender asserting the rights of the owner under 713.21 and 713.31.
Lender and Owner / Borrower are not adverse (obviously, always the potential for conflict between a Lender and Borrower).
Lender was granted an assignment of Owner’s right to defend title to the real property to protect the lien granted under the Mortgage.
Contractor has filed a lien that is invalid on its face. Contractor blew 90 days by a mile.
Lender wants to have the lien discharged under a 713.21 action and also include an action under 713.31. I have handled these claims many times but the Plaintiff was always the Owner.
I have never seen a scenario where the Lender wanted to contest the lien on its own accord, which it has the right to do under the language in the mortgage.
Has anyone ever dealt with this. Seems straight forward but again, first time I have done it from the context of a lender asserting claim.
Any insight would be greatly appreciated.
Thanks all.
[cid:image006.jpg@01D9BAFA.5BB41860]https://link.edgepilot.com/s/d2e09a79/1HrZFBGfz0uf1ILVmVuVwA?u=https://www.qpwblaw.com/
Michael J. Barker
|
Partner
Quintairos, Prieto, Wood & Boyer, P.A.
12428 San Jose Blvd., Suite 1
,
Jacksonville
,
FL
32223
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Attached is an opinion Harry Malka was involved with years ago, and the docket showing the appellate court granting fees unconditionally in that scenario.
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From: clc-discussion-bounces@lists.flabarrpptl.org clc-discussion-bounces@lists.flabarrpptl.org On Behalf Of RPPTL CLC-Discussion
Sent: Thursday, July 20, 2023 11:07 AM
To: clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Read the case law…..and the proceeding is ex parte.
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Thursday, July 20, 2023 10:08 AM
To: clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
My understanding is that the show cause complaint under 713.21 does not allow for fees; 713.21 doesn’t mention fees, and 713.29 only provides for fees “in any action brought to enforce a lien or to enforce a claim against a bond[.]” If the lienor never files a lawsuit, there’s no action “to enforce a lien.” If you want fees, you would need to pair the 713.21 claim with a 713.31 claim for fraudulent lien.
Happy to be proven wrong, though.
Ryan P. Sullivan, Esq.
Florida Bar Board Certified – Construction Law
Niesen|Price|Worthy|Campo, PA
5216 SW 91st Drive | Gainesville, FL 32608
(352) 373-9031 | ryan@npw-law.commailto:ryan@npw-law.com
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From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Wednesday, July 19, 2023 3:21 PM
To: clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
A show cause order is even faster…..and allows for fees.
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, July 18, 2023 1:43 PM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
I agree that the action under 713.21 is not the least expensive path. I was saying the notice of contest of lien is the least expensive path at least for the first 60 days to see if lienor files suit. If no suit is filed, the lender and the title insurer that issued the loan policy should be satisfied that title is clear and no further action is necessary to resolve the lien. Lender can order a title update to reflect that in its file upon the expiration of the 60 days. If I was repping the lender, I would want the owner to sign the notice of contest of lien in any event to avoid any challenge to the assignment or the validity of the notice. Lenders are not typically looking to jump in and spend money so they may have been burned in another matter. I would reach out and see if owner can start a discussion to lay out this plan and see if lender will agree knowing that they reserve their rights to take action if necessary. It will always be less expensive for the borrower if they are able to finance the challenge directly through their own counsel instead of not having direct contact with lender’s counsel and being stuck with the fees and costs being added to the loan balance later. There is always the transfer to bond option to satisfy the lender and clear the cloud on title, but I would still try the notice of contest first.
[cid:image003.jpg@01D9BB31.35B8B7B0]
Sherry A. Lambson-Eisele
Partner- Business Litigation Practice Group Leader
Boyd & Jenerette, P.A.
2290 Lucien Way, Suite 260
Maitland, FL 32751
Office: (407) 309-4760 x621
Direct: (407) 309-4758
Cell: (407) 405-8801
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From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, July 18, 2023 12:21 PM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
I agree generally, but I don’t think an action under 713.21 is the least expensive path – probably the most, which is why I was wondering about the recording sequence. And I don’t know that the lender can assert the Owner’s rights under 713.21 absent some assignment from the Borrower – which may very well be in the loan documents and is suggested below, but just an assignment of the right to defend title may be insufficient. I think it would probably have to be explicit and specific. The lender has little collateral risk if the order is right (unless they’re very concerned about the borrower), but is at risk if the NOC was first. And if the order is wrong (NOC first), given the lender’s recording duty under 713.13(7), the cost of fixing it should be on the lender and not the borrower.
Bruce Partington | Shareholder
Board Certified Specialist in Construction Law
bpartington@clarkpartington.commailto:bpartington@clarkpartington.com | (850) 432-1399
CLARK PARTINGTON
Office: (850) 434-9200 | Fax: (850) 432-7340
125 East Intendencia Street, 4th Floor
Pensacola, Florida 32502
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From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, July 18, 2023 10:24 AM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Notwithstanding the date of the NOC, the Lender is entitled and should be taking steps to protect the collateral pledged to secure the debt if necessary and to cure any clouds on title to its collateral. The problem is that they will add all their fees and costs to the borrower’s balance. I would encourage the Lender to first file a notice of contest of lien to keep the costs low because if the lienor does not file suit within 60 days, then the cloud on title is cured without the need to file suit. This is the least expensive approach. The owner should separately send the demand for sworn statement to Lienor in the meantime. I do not think the lender can send the demand for sworn statement but there may be a case that says Lender can do so when the CLA or other loan documents assign rights to the lender to challenge any liens.
If the NOC was recorded before the mortgage, I would argue for owner that the fees and costs are mostly the lender’s problem to protect their priority which is not the borrower’s problem. There may be a title claim for lender if the NOC was really recorded earlier and fees should be borne by the title insurer if that is the case after Lender makes a title claim. But it is more likely that Lender is simply taking action to protect their collateral so I would anticipate that fees and costs will be added to the borrower’s balance. So, it is still in borrower’s best interest for Lender to take least expensive approach to eliminate the lien.
[cid:image005.jpg@01D9BB31.35B8B7B0]
Sherry A. Lambson-Eisele
Partner- Business Litigation Practice Group Leader
Boyd & Jenerette, P.A.
2290 Lucien Way, Suite 260
Maitland, FL 32751
Office: (407) 309-4760 x621
Direct: (407) 309-4758
Cell: (407) 405-8801
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From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Monday, July 17, 2023 6:09 PM
To: 'clc-discussion@lists.flabarrpptl.org' <clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Was the notice of commencement recorded before the mortgage, perhaps? That would get the lender really interested.
Bruce Partington | Shareholder
Board Certified Specialist in Construction Law
bpartington@clarkpartington.commailto:bpartington@clarkpartington.com | (850) 432-1399
CLARK PARTINGTON
Office: (850) 434-9200 | Fax: (850) 432-7340
125 East Intendencia Street, 4th Floor
Pensacola, Florida 32502
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From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org <clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Monday, July 17, 2023 4:56 PM
To: clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: [CLC-Discussion] Lender asserting rights under 713.21 and 713.31
Hi everyone. Hope all are well.
I have an issue that has come up that I have not encountered before that involves a construction mortgage lender asserting the rights of the owner under 713.21 and 713.31.
Lender and Owner / Borrower are not adverse (obviously, always the potential for conflict between a Lender and Borrower).
Lender was granted an assignment of Owner’s right to defend title to the real property to protect the lien granted under the Mortgage.
Contractor has filed a lien that is invalid on its face. Contractor blew 90 days by a mile.
Lender wants to have the lien discharged under a 713.21 action and also include an action under 713.31. I have handled these claims many times but the Plaintiff was always the Owner.
I have never seen a scenario where the Lender wanted to contest the lien on its own accord, which it has the right to do under the language in the mortgage.
Has anyone ever dealt with this. Seems straight forward but again, first time I have done it from the context of a lender asserting claim.
Any insight would be greatly appreciated.
Thanks all.
[cid:image006.jpg@01D9BB31.35B8B7B0]https://link.edgepilot.com/s/d2e09a79/1HrZFBGfz0uf1ILVmVuVwA?u=https://www.qpwblaw.com/
Michael J. Barker
|
Partner
Quintairos, Prieto, Wood & Boyer, P.A.
12428 San Jose Blvd., Suite 1
,
Jacksonville
,
FL
32223
Email: mbarker@qpwblaw.commailto:mbarker@qpwblaw.com
Web: https://link.edgepilot.com/s/4fc85814/MedgEnIRj0WqcyrcpoUNqg?u=http://www.qpwblaw.com/https://link.edgepilot.com/s/d2e09a79/1HrZFBGfz0uf1ILVmVuVwA?u=https://www.qpwblaw.com/
Mobile: (904) 226-3660tel:(904)%20226-3660
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