We are a Florida Subcontractor. We are due a retainage payment from a General Contractor. General Contractors do not pay retainage until 1 year after completion of project. How do we file a lien on a Retainage amount if liens can only be filed 90 days after last day on job?? Please advise. Thank You.

9 months ago

We are a Florida Subcontractor. We are due a retainage payment from a General Contractor. General Contractors do not pay retainage until 1 year after completion of project. How do we file a lien on a Retainage amount if liens can only be filed 90 days after last day on job?? Please advise. Thank You.

Senior Legal Associate Levelset

That’s a good question, and it points to a bit of friction between mechanics lien laws and retainage laws. As you mentioned above, in Florida, the deadline to file a mechanics lien is 90 days from the last date that the potential lien claimant supplied labor or materials. In Florida, the use of retainage is not explicitly regulated by state statute, so there aren’t really specific timeframes during which retainage payment must be released. But, as mentioned above, common practice is to withhold retainage until project completion (be that substantial completion, final completion, or some other milestone set out under the contract). This creates an inherent conflict – the deadline to file a mechanics lien will often arise much earlier than retainage is scheduled to be released to a sub or other trade. So what gives?

Ultimately, it comes down to a business decision for the sub/trade. If they intend to utilize a mechanics lien to recover retainage, that lien would need to be filed within 90 days of their last furnishing on the project – and that deadline is strict. However, if the sub/trade is unwilling to make a lien claim on retainage, they’ll have to recover retainage some other way if a payment dispute arises (such as by making payment demands, taking the matter to small claims court, or even pursuing litigation). Keep in mind, though, it’s worth thinking about whether or not the retainage practices being utilized are fair. Retainage tends to be a serious portion of what’s owed under a contract – typically 5-10%. That represents a huge portion of the profit for the job! Waiting for over a year to get paid for work that’s been done is a pretty daunting scenario, and it doesn’t sound particularly fair to the party who performs the work.

So, pushing a contractor to release retainage at a more reasonable time might make more sense than waiting an eternity for retainage. Of course, at the same time, contractors will typically have more leverage than the average sub or supplier, so there are a number of forces in play. Still, when possible, construction businesses should aspire to a more fair payment ecosystem. For more discussion on all things retaiage, this resource should be valuable: The Ultimate Guide to Retainage in the Construction Industry. For more information about Florida lien claims specifically, this resource should help: Florida Lien & Notice Overview.

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