How Does a Landlord Prevent Liens by Tenant’s Contractors? Part 2

July 26, 2019 by

Papers for applicationFlorida landlords may protect their real estate from liens resulting from tenants’ improvements.

This is the second article in a three-part series discussing some of the ways landlords may lawfully avoid liens and disputes with the construction contractors and material suppliers of their tenants. If you missed Part 1, please read it here.

A Landlord Should Not Sign Its Tenant’s Permit Applications and Notices of Commencement (NOC)

The landlord should review and approve the form and content of the permit applications and NOCs before the tenant records or files them, because the tenant or its contractor often incorrectly complete them out. The landlord should not sign these documents. If the landlord signs a tenant’s NOC or permit application as the “owner”, by doing so, it could give the tenant’s contractors, subcontractors, and suppliers a basis to argue the landlord ordered the work and is therefore responsible for payment.

When a tenant hires a contractor to perform improvements to its leased premises, the tenant is a party authorized to apply for permits and record a NOC for its project. The landlord should be listed as the “fee simple owner” on those documents, but it is the tenant who, as “leasehold owner,” should be listed as the owner and who should sign these documents. If the building department requests something from the landlord authorizing the tenant to pull the permit, the landlord may provide the tenant with a letter of authorization addressed to the building department stating the landlord consents to and agrees the tenant may apply for permits and sign NOCs for recording.

Please watch our blog or subscribe to our email list for updates to read Part 3 in this series.