By: Amanda Parker Baggett
The old adage “time is money” is truer perhaps in the construction industry than anywhere else. Delays can cause significant economic damages for everyone involved on a construction project. But are those delay damages lienable? It depends.
Such damages may be lienable if the contract provides for the recovery of delay damages and if those contract provisions for recovery are followed. Otherwise, including delay damages in a lien may render it fraudulent under § 713.31, Florida Statutes. If a construction lien is found to be fraudulent, it operates as a complete defense to any action to enforce the lien and also exposes the lienor to a claim for damages under the statute.
For instance, in In re Hayes, 305 B.R. 361, 366 (M.D. Fla. 2003), the contractor entered into a stipulated sum contract with the owners to build a restaurant. The contract provided that any changes to the contract price or time were to be done by written change orders signed by both parties or by way of a formal claim. The estimated completion time for the project was extended during the course of the project and the contractor submitted a change order based on some of the delays which included a delay cost. The owner refused to sign the change order.