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 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.
For a deep dive on lien waivers:
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 mechanics 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 Code §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 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 is like most states that disallow the parties from contractually prohibiting liens.
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, the payment is a “final” payment. 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 the payment is a “partial” payment.
Free Form Downloads — Florida Lien Waivers
Now you’re ready to select the correct Florida lien waiver form. There are only 2 possibilities — click on the links below to download your free forms:
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 statute 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 us their lien rights prior to the furnishing of labor and/or materials.
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 Is Not 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, but before receiving payment.
If you’re signing an unconditional waiver…beware! It is definitely safer to exchange conditional lien waivers.