Florida has a law and it is in our contracts, we get paid when GC gets paid. Its pretty simple here, if you don't agree to it, you don't get the work.
Is there anything we can do to protect ourselves in this scenario?
Thanks.
1 reply
Dec 18, 2019
Ways to Speed up Payment
Slow payment is an unfortunate reality of the construction industry. However, there are certain steps contractors can take to speed up the process. Yes, in Florida, pay-when-paid clauses are enforceable. But there are 3 simple things every contractor can do on a project to grease the wheels on payment.
Florida Notice to Owner
The most leverage a contractor can have on a construction project is through mechanics lien rights. In Florida, every party (except those hired directly by the property owner) must send a Notice to Owner in order to secure the right to file a mechanics lien. This notice must be sent within the 45 days of first furnishing labor or materials to the project, or when work begins on making specialty materials; whichever is earlier.
Even when not required, a preliminary notice is always a good idea to send; and the earlier the better. Property owners may not know everyone hired on a project, and by sending a prelim, you are promoting visibility on the project, and securing your lien rights at the same time. That way when it's time to release payment, your invoice is prioritized over those who didn't send notice.
Sending Lien Waivers with Every Invoice
Another way to speed up the payment process is to send a lien waiver with every invoice. If you've sent a preliminary notice, once an invoices is submitted, the GC or owner will ultimately request a lien waiver before making payment. So why not streamline the process by sending the waiver with the invoice. Of course, be sure that the waiver (a) meets the Florida statutory requirements for lien waivers, and (b) that you send a conditional, as opposed to an unconditional. That way, the waiver isn't effective until payment is actually made.
Using a Notice of Intent to Lien
Lastly, keep an eye on the deadline to file a Florida mechanics lien, which is 90 days after the last day of furnishing labor or materials to the project. If this deadline is creeping up, a Notice of Intent to Lien (NOI) can typically be enough to induce payment. A mechanics lien attaches directly to the property and clouds the title, owners will usually want to avoid this at all costs. Sending an NOI shows that you know your rights, and you are serious about getting paid.
These are just a few ways to speed up payment, but there are all types of things one can do to ensure prompt payment; such as sending invoice reminders and payment demand letters throughout the project.
For more resources, head over to our Florida Construction Payment Help Page for FAQs, free forms, articles and more.