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 sending or receiving lien waivers on a Florida construction project. Even simple mistakes 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.
Lien waivers affect everyone
Unlike other aspects of the mechanics lien process that may be limited in importance to certain project participants, exchanging lien waivers is essential for all of the participants on construction projects in Florida, 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.
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.
Florida has statutory waiver forms, but they’re not required
Florida’s lien waiver rules are a bit unusual. While Florida is one of 12 states that provide statutory lien waiver forms, this state’s law is unique in that contractors are not required to use the forms provided by the state.
In fact, if the stakeholders involved in the lien waiver exchange all agree, a completely different 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 waiving liens in the contract. We refer to these as “no-lien clauses.” Like many other states, Florida doesn’t allow the use of no-lien clauses.
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. However, 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:
Progress payment vs 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.
Conditional vs unconditional waivers
It’s important to understand the difference between conditional and unconditional waivers. A conditional waiver effectively becomes unconditional after payment has been received. An unconditional waiver, by contrast, is unconditional whether or not the hired party is actually paid.
As written, the standard lien waiver and release forms provided by Florida lien laws are unconditional. However, under §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, you need to include a statement 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.
Free Florida lien waiver forms
Now you’re ready to select the correct Florida lien waiver form based on the type of payment. Make sure that, if you haven’t received payment yet, you are using the conditional version of the waiver.
Conditional Waiver Form for Progress Payments
Use this conditional lien waiver form while waiting for a progress payment.
Unconditional Waiver Form for Progress Payments
Use this unconditional lien waiver form after a progress payment has already been received.
Conditional Waiver Form for Final Payments
Use this conditional lien waiver form while waiting for the final payment on a project.
Unconditional Waiver Form for Final Payments
Use this unconditional lien waiver form after the final payment has already been received.
FAQs 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.
Yes and no. Though lien waivers are considered statutory in Florida, meaning the law actually includes specific language that should be included on every type of lien waiver. However, if all parties agree, and no one gives up lien rights before providing labor or materials, then they can use an entirely different lien waiver form than the one in Florida statute.
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.
No, notarization of lien waivers is not required in Florida. Lien waivers only need to be notarized in 3 states, and Florida isn’t one of them. So, don’t waste time and effort with it. The lien waiver process is already complicated enough.
Yes. While you cannot sign a lien waiver before providing work or materials, you can sign an unconditional waiver after doing the work but before receiving payment. However, be very careful when signing an unconditional waiver! 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 — whether or not you actually receive payment. Before payment is received, it is much safer to exchange conditional lien waivers.
Typically, a lien waiver is a document used in exchange for payment. A lien release, on the other hand, is used to cancel or discharge a mechanics lien that has already been filed.
However,in Florida statute a lien waiver is called a “Waiver and Release of Lien.” This makes it a bit confusing. In Florida, a lien release (used to cancel a lien) is called a Discharge of Lien.
Further reading: The Ultimate Guide to Lien Waivers in Construction
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