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Are zero dollar final releases legal

We have a contractor that will not accept our "zero dollar" final releases from our suppliers. Since when do banks and contractor not accept a "$0.00" Final Release? Is there a legal reason that they are not accepting these. I have been in the industry for over 30 years and we always did zero dollar finals

1 reply

Jan 28, 2019

That's a good question, and it's not uncommon for industry members to utilize "zero dollar" waivers. However, ultimately, using a zero dollar waiver is a manipulation of Florida lien waivers. The Florida mechanics lien statute sets out a waiver form that calls for the submitting party to indicate what compensation they have been provided in exchange for the lien waiver. Florida contractors, subs, and suppliers regularly use a zero dollar waiver in attempt to get around including what's been paid to the party submitting the waiver for a variety of reasons. Because Florida is a state where mechanics lien rights can be waived prior to receiving any consideration (as long as the work has already been performed), it's possible for these waivers to effectively waive lien rights - even with a $0 balance on the waiver. However, it's not unheard of for a property owner or a lender to demand that the lien waiver be filed out in earnest rather than with a zero dollar workaround prior to releasing payment. It's not an unreasonable request, either - if the proper form isn't utilized, a zero dollar waiver could actually waive nothing at all. While a contractor might resist including amounts on their subs' lien waivers (or vice versa), including actual amounts paid on lien waivers should have no affect for some other party as long as everyone is operating above-board. Parties may be reluctant to show their margins, but doing so won't have any affect on the contractor's right to payment under their contract.

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