A contractor receives a Notice to Owner for a $180,000 project. The contractor's work is valued at $45,000. What is the maximum lien amount the contractor can claim under Florida Statutes Chapter 713?
Correct Answer
D) $45,000
Under Florida Statutes Chapter 713, a contractor can claim a lien for the full amount of their work performed, which in this case is $45,000, regardless of the total project value.
Why This Is the Correct Answer
Under Florida Statutes Chapter 713, a contractor has the right to claim a construction lien for the full amount of work they have performed and for which they have not been paid. The lien amount is not limited by percentages of the total project value, but rather by the actual value of the contractor's own work. Since the contractor's work is valued at $45,000, they can claim a lien for the entire $45,000 amount.
Why the Other Options Are Wrong
Option A: $18,000
$90,000 is double the contractor's work value and exceeds what the contractor actually performed, which would not be allowable under Florida lien law.
Option B: $36,000
$36,000 appears to be 80% of the contractor's work value, but Florida law does not impose percentage reductions on lien amounts based on the contractor's work value.
Option C: $90,000
$18,000 appears to be 40% of the contractor's work value, but there is no such percentage limitation in Florida lien law for the amount a contractor can claim.
Memory Technique
Think 'Full Work = Full Lien' - contractors can always claim 100% of their unpaid work value, regardless of total project size
Reference Hint
Florida Statutes Chapter 713 - Construction Liens, specifically sections dealing with lien amounts and contractor rights
More Business & Finance Questions
A general contractor purchases equipment worth $45,000 with a useful life of 9 years and no salvage value. Using straight-line depreciation, what is the annual depreciation expense?
What is the typical recommended coverage amount for general liability insurance for a small to medium-sized general contracting business?
A contractor estimates startup costs of $75,000 for equipment, $25,000 for initial inventory, $15,000 for insurance premiums, and $10,000 for working capital. They can finance 70% of the total. How much cash do they need?
When establishing professional relationships with architects and engineers, what is the most important factor for a general contractor to consider?
A partnership agreement for a construction company should address all of the following EXCEPT:
A contractor purchases a truck for $60,000. After 5 years, it has accumulated depreciation of $35,000. What is the truck's book value?
A contractor's business plan projects first-year revenue of $500,000 with a 15% net profit margin. If actual revenue is $450,000 with the same profit margin, what is the variance in net profit?
Using the Modified Accelerated Cost Recovery System (MACRS), construction equipment is typically depreciated over how many years?
A contractor is comparing financing options for equipment purchase. Option A: $80,000 cash purchase. Option B: $20,000 down, $65,000 financed at 6% for 4 years. What is the total cost of Option B?
A contractor purchases equipment using a capital lease with a present value of $120,000. How should this be recorded on the balance sheet?