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When completing a lien release, do you state the full value of an invoice that has a discount or the discounted value?

FloridaLien Waivers

We are a GC and we generate lien releases all the time. We have vendors that give us discounts for paying quickly. Shouldn't our release state the full value of the invoice? If we accept releases for the discounted amount - we could be liable for the difference - correct?

1 reply

Oct 18, 2017

Florida is a state in which acceptable forms for lien waivers (waiver and release of lien) are set forth by statute. While any form can be agreed to by the parties, no party may be forced to use a waiver form different than that set forth by the statute.

The text for a waiver and release upon progress payment states (in part): "The undersigned lienor, in consideration of the sum of $____, hereby waives and releases its lien and right to claim a lien for labor, services, or materials furnished through (insert date) . . ."

The inclusion of a "through date" is what makes the waiver a progress waiver, by setting the date through which the waving party was paid, and, accordingly, through which the waiver is effective. It is generally not a good idea to include incorrect information on a waiver, i.e. stating a larger amount of payment was made than what actually was. The language that the waiving party waives it's lien rights through a particular date for a particular payment amount is sufficient.

However, in the interest of caution, you may, if you desire, include in the payment identification blank on the waiver, wording that the amount paid and in consideration of which the waiving party waives its lien rights, is $xxxx negotiated as the total amount due for work through _________ date pursuant to a prompt pay discount between the contracting parties.

The same analysis can be applied to a waiver on final payment.

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