[CLC-Discussion] Can a construction lender bond off aconstruction lien?

Wed Feb 6 08:45:46 PST 2013

“is the lien still there along with the bond . . .” – interesting point, Larry.  If the lender attempts to transfer the lien through a 713.24 lien transfer bond, then by your argument the lienor would still have its lien claim AND now have a claim against that bond, which, because it does not comply with 713.24, is instead a common law bond which is additional – and not substitute – security for the lien.

From: clc-discussion-bounces at lists.flabarrpptl.org [mailto:clc-discussion-bounces at lists.flabarrpptl.org] On Behalf Of Larry Leiby
Sent: Wednesday, February 06, 2013 11:27 AM
To: 'Roberts, Hardy L.'; 'Construction Law Discussion'
Subject: Re: [CLC-Discussion] Can a construction lender bond off aconstruction lien?

I agree with those who noted that a lender does not have an interest in property, instead it has a mortgage lien, and thus is not covered under 713.24.  However that is the tip of the iceberg and begs the question.

The concern that I have experienced is where the lender seeks to transfer the lien to bond but the bond form is not conditioned only on proving the lien claim it is also conditioned on proving priority.  That is not what 713.24 is about, and the clerks aren’t real students of 713.24 as they have many duties.  If that happens the lienor should challenge any certificate of transfer.

So a lender is a little nuts wanting to transfer a lien under 713.24 without added language (which would not meet the requirements of 713.24), because then the lienor need only prove its lien claim and the condition of the bond is performed where the principal and surety on the bond are on the hook (assuming they didn’t sneak in any added language to the 713.24 bond form).  The lender loses its argument about the lien not having equity and being inferior to the mortgage by bonding it off and taking the property equity out of the equation.  The lienor should be ecstatic about not being worried about the lender’s priority any more, but must watch carefully the language in the bond.  If the lender is looking to clear title for some reason of its own, it should not be the principal on the bond – only someone with an interest.  If the lender gets cute and adds language to the bond, we have some new issues to address, which I believe are not yet resolved.

Thus if the lender uses a 713.24 bond to transfer it off, the question is:  Is the lien really transferred off, or is the lien still there along with the bond because the lender cannot meet the requirements of 713.24 by not having an interest in the property?

Larry R. Leiby, Esq.
Malka & Kravitz, P.A.
1300 Sawgrass Corp. Pkwy., Suite 100
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Member, Leiby Alexander Brandt ADR Group, LLC
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Fellow, College of Commercial Arbitrators

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From: clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org> [mailto:clc-discussion-bounces at lists.flabarrpptl.org]<mailto:[mailto:clc-discussion-bounces at lists.flabarrpptl.org]> On Behalf Of John Campo
Sent: Tuesday, February 05, 2013 2:41 PM
To: 'Matthew Belcastro'; 'Raymond L. Robinson'; 'Gibbons, Michael'; 'Roberts, Hardy L.'; 'Construction Law Discussion'
Subject: Re: [CLC-Discussion] Can a construction lender bond off aconstruction lien?

As a practical matter, I would welcome a Lien Transfer Bond knowing that a pile of money is readily available for the taking should my client prevail on its lien.

John D. Campo, Esq.
Florida Bar Board Certified - Construction Law
john at npw-law.com<mailto:john at npw-law.com>

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From: clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org> [mailto:clc-discussion-bounces at lists.flabarrpptl.org]<mailto:[mailto:clc-discussion-bounces at lists.flabarrpptl.org]> On Behalf Of Matthew Belcastro
Sent: Tuesday, February 05, 2013 2:16 PM
To: Raymond L. Robinson; Gibbons, Michael; Roberts, Hardy L.; Construction Law Discussion
Subject: Re: [CLC-Discussion] Can a construction lender bond off aconstruction lien?

I'm not sure I understand why the construction lender wants to bond off the lien?  Are they trying to convert to permanent financing and unable as a result of the construction lien?

Matthew Belcastro
Attorney at Law
Henderson, Franklin, Starnes & Holt, P.A.
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From: clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org> [mailto:clc-discussion-bounces at lists.flabarrpptl.org] On Behalf Of Raymond L. Robinson
Sent: Tuesday, February 05, 2013 2:02 PM
To: Gibbons, Michael; Roberts, Hardy L.; Construction Law Discussion
Subject: Re: [CLC-Discussion] Can a construction lender bond off aconstruction lien?
One could make the argument that Florida is considered a “lien” state and case law has held that a mortgage is not a transfer of “interest” in real property and therefore does not need two subscribing witnesses.  Good question though.  Let me know if you find the answer.

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From: clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org> [mailto:clc-discussion-bounces at lists.flabarrpptl.org] On Behalf Of Gibbons, Michael
Sent: Tuesday, February 05, 2013 12:19 PM
To: 'Roberts, Hardy L.'; 'Construction Law Discussion'
Subject: Re: [CLC-Discussion] Can a construction lender bond off a construction lien?

Yes.  The lender has “an interest” via its mortgage in the real property on which the lien is imposed.

Michael R. Gibbons  (Bio<http://lowndes-law.com/our-people/michael-r-gibbons>)
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From: clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org> [mailto:clc-discussion-bounces at lists.flabarrpptl.org] On Behalf Of Roberts, Hardy L.
Sent: Tuesday, February 05, 2013 11:55 AM
To: 'Construction Law Discussion'
Subject: [CLC-Discussion] Can a construction lender bond off a construction lien?

Anyone have any thoughts on this?

[Carlton Fields]
Hardy L. Roberts
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Tampa, Florida  33607-5780
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