Unlike other aspects of the mechanics lien process that may be limited in importance to certain project participants, exchanging Florida lien waivers is essential for all of the participants on a construction project, since each stakeholder is affected by lien waivers:
- Project lenders frequently require lien waivers to approve loan disbursements.
- Developers or homeowners require lien waivers to limit the possibility that they pay for the same work twice.
- General contractors must collect lien waivers on behalf of the property owners and lenders, and also protect themselves.
- Subcontractors and suppliers must not only send out lien waivers to get their payment processed; they often must comply with other project stakeholder’s (specifically, the ‘payers’) lien waiver needs.
If you’re reading this, chances are that, in addition to about a million other hats that you’re wearing, you’re also in charge of getting the lien waivers right on a Florida construction project. And in many cases, getting one tiny thing wrong could invalidate the entire waiver, potentially delaying the payment, disrupting your accounts receivable, and negatively impacting your cash flow.
Exchanging lien waivers is a crucial part of the payment process, and you must get it done right every time. The Florida Lien Waivers Overview will cover the key points. But let’s jump into the details a bit.
Table of Contents
Overview of Florida’s lien waiver rules
Although every state has different rules, lien waivers generally work the same way everywhere, including in Florida. That is to say that at its core, a lien waiver is simply a document signed by a potential lien claimant (such as a contractor or supplier) stating that they waive their right to file a construction lien against the property, in some amount or for some period of time, usually in exchange for payment.
In Florida, there are specific laws governing the lien waiver exchange, which are mostly housed in Florida Statute §713.001 et seq.
What you need to know
Florida has statutory waiver forms, but they’re not required
When it comes to lien waivers Florida is very unusual. While Florida is one of 12 states that provide statutory lien waiver forms, Florida law is unique in that construction stakeholders are not required to use the forms provided by the state.
In fact, if the construction project stakeholders involved in the lien waiver exchange all agree, a completely dissimilar form can be used and it is effective as written (as long as it doesn’t waive rights in advance of doing work). However, you can’t be forced to use a lien waiver form different than those in the statute – you need to agree to use a differing form.
You can’t contract out of your lien rights in Florida
Florida lien law, like most states, specifically prohibits parties from contractually prohibiting liens. We refer to these as “no-lien clauses.” Many states have prohibited the use of no-lien clauses, California in particular prohibits the use of them as they are against public policy.
Lien rights in Florida can be waived before payment
Florida does not allow for waivers to be signed prior to furnishing labor and/or materials, but you can sign a lien waiver in Florida after furnishing labor and/or materials, but before payment has been received.
Choosing the right Florida lien waiver form
In Florida, there’s really just one question that must be answered in order to determine which lien waiver form to use:
Is it a progress payment, or a final payment?
In the world of construction payments, this is a universal question. Every payment on a construction project is either a “partial” or progress payment, or the “final” payment that signifies that the work performed fulfills the contract terms. To select the correct lien waiver form, you must figure out which type of payment you’re dealing with.
If a contractor or supplier is getting paid on a project and will never be paid again for that project, then a final lien waiver is appropriate. But, if the contractor or supplier will likely be paid again in the future, and the payment in question is just one of many future payments, then a progress payment waiver should be used.
What about conditional and unconditional waivers?
Yes, conditional and unconditional waivers are used in Florida? The standard lien waiver and release forms provided by Florida lien laws are both unconditional as written. However, under Fla. Stat. §713.20(7), “A lienor who executes a lien waiver and release in exchange for a check may condition the waiver and release on payment of the check.” So in order to make these forms conditional, some language similar to “this waiver is conditional and effective only on the lienor’s receipt of payment from the financial institution on which the following check is drawn.” Failing to include this language is a common mistake when it comes to Florida lien waivers.
Florida lien waiver forms- free downloads
Now you’re ready to select the correct Florida lien waiver form. There are only 2 possibilities — click on the links below for guides and free lien waiver and release forms:
- Florida Lien Waiver: Progress Payment Waiver Guide & Form Download
- Florida Lien Waiver: Final Waiver Guide & Form Download
Frequently asked questions about Florida lien waivers
Now you should have a good handle on the general way that Florida lien waivers work, but some things can pop up to cause you to scratch your head. Below are some frequently encountered situations and questions, and some general answers.
Q: Wait a minute…Florida has statutory forms, but they’re not required? Is that really true?
A: Yes, this is true.
As we’ve said before, when it comes to lien waivers, Florida is unique. Even though the Florida law specifies two different lien waiver forms, the state does not require these forms to be used if, 1) the parties agree otherwise, and, 2) no one gives up their lien rights prior to the furnishing of labor and/or materials.
- For more on this, see: Florida’s “Non-Required” Statutory Lien Waivers Can Lead to Confusion
If you are using a non-statutory form, pay close attention to the terms of the lien waiver. Many times non-regulated waivers will contain additional provisions that may end up waiving more than just lien rights. Always review the language on these, and ask yourself, “Should I Sign That Lien Waiver?”
Q: Does a Florida lien waiver need to be notarized?
A: No, notarization of lien waivers is not required in Florida.
As discussed in “Do Lien Waivers Need To Be Notarized?,” only 3 states require notarization on waivers (Wyoming, Texas, and Mississippi). In all other states – including Florida – it’s clearly not a requirement. So, don’t waste time and effort with it. The lien waiver process is already convoluted enough.
Q: Can “unconditional” waivers be exchanged even if payment isn’t made?
You cannot sign an unconditional lien in Florida prior to the furnishing of labor, services, and/or materials. But you can sign an unconditional lien waiver in Florida after the furnishing of labor, services, and/or materials, and before receiving payment. If you’re signing an unconditional waiver…beware! If you sign an unconditional waiver and have not received payment, you will not have the ability to file a lien for non-payment of the amount listed in the waiver. Regardless if you’ve been paid or not. It is definitely safer to exchange conditional lien waivers.
Q: Is a lien waiver the same as a lien release?
A: No, well kind of. Depending on who you talk to.
This is a common issue that trips up a lot of contractors and suppliers. The issue gets only worse when you take into account the fact that waivers in Florida, and many other states, are called “Waiver and Release of Lien.” Whenever someone refers to a “lien release” or “release of lien” be sure to clarify what they’re referring to. A lot of times a person is referring to a “lien cancellation” or “discharge of lien.” These are used when a party has already filed a claim of lien. These types of releases are used to remove the lien claim from public record. Typically when payment is received, or the claim has expired.