Be Wary of Florida Non-Statutory Construction Lien Waivers and Releases

Florida Non-Statutory Construction Lien Waivers and Releases, Sections 713.001 through 713.37, include sample language for construction lien waivers and releases.  Section 713.20(4) and (5) provide standard release language for progress and final payments, and Section 713.20(7) authorizes a lienor who executes a release in exchange for a check to condition the release on payment of the check.  Some general contractors’ standard Subcontract Agreements provide alternative “form” releases that are significantly broader than the statutory releases and much more favorable to the general contractor.  It is not improper for a general contractor to suggest an alternative release form or to include the proposed form as an attachment to its Subcontract Agreement.  A lienor typically can waive, release, or satisfy any part of its lien as to the amount due or as to any part or parcel of a project for labor, services, or materials that have already been furnished.  However, Section 713.20(6) does not permit a general contractor to require a lienor to furnish a lien release that differs from the statutory release language.  Thus, a subcontractor can reject a general contractor’s alternative form and provide a statutory release in exchange for payment.

Additionally, when a subcontractor is exchanging an executed release for a check, the subcontractor can include the Section 713.20(7) notice that the release is conditioned upon the subcontractor receiving payment for the check.  Section 713.20(7) provides additional protection for subcontractors, and they should take advantage of the additional protection.

Because business owners usually delegate the preparation of lien releases to administrative staff members, it is critical that such staff members are instructed to review release forms to see if they differ from the statutory language.  Your staff should:

1. Carefully and individually review every proposed release form they receive, and
2. Know they should not sign or approve a release because it is in the same form as the draft release attached to the Subcontract Agreement or because it is in the same form as a previously signed release.

Having valid lien rights gives a subcontractor another avenue of collecting payment for its work.  When you have to enforce your right to payment in court, you need to know that your company has not voluntarily or inadvertently released its lien rights.  When a general contractor stops paying subcontractors, files bankruptcy, or goes out of business, having enforceable lien rights may result in your company getting paid when others do not.