As a contractor, only two things are ever certain — long hours, and having to chase down the money you’re owed. As for the long, hot work days, there’s really no getting around that. However, part of getting paid involves signing construction claim of lien waivers. If payment is not made, the party that provides labor, materials or services can file a mechanic’s lien to enforce payment. To avoid a lien on a project, the paying party will require the contractor/supplier to sign a lien waiver. There are two types of waivers, conditional and unconditional. Within each type are two subtypes: final and partial waiver and lien releases.
Conditional waivers are based on the condition of a partial or final payment made “to date” on a project. With this waiver, a potential claimant releases the right to file a mechanic’s lien if they have been paid partially, up to the date of services performed as agreed.
Alternatively, the release could release a specific dollar amount provided that dollar amount is paid. Conditional waivers can also be used when a final payment is made. Regardless of when it is presented, a conditional lien waiver is provided before payment and becomes enforceable after payment.
Both final and partial unconditional payment means that a contractor releases the right to file a mechanic’s lien on the property regardless of whether payment is made. Contractors often make the mistake of executing unconditional releases despite not receiving payment. There are arguments that can be made if payment is not received but it is better to avoid having to make these arguments. Bottom line, read the release and understand if it is conditioned on payment or not, and understand if you are assuming the risk of non-payment.
Proceed with caution with lien waivers. You need to know your rights and thoroughly understand the release before you sign it. Ask the following questions:
■ Will the waiver expose you to more liability?
■ Does the waiver increase your contractual responsibility?
■ When does the waiver go into effect?
■ Are you submitting the lien waiver for a partial or final amount due to you?
Finally, there are several key statutory sections that impact roofers and suppliers. Section 713.20, Florida Statutes dictates
the form for partial and final waiver and release of liens. More importantly, Section 713.20(6) provides:
“A person may not require a lienor to furnish a lien waiver or release of lien that is different from (the statutory) forms…”
Therefore, if an owner or contractor is requiring a more expansive lien release that waives other claims or future rights, a roofer may turn to Section 713.20(6), Florida Statutes to argue that a statutory release is sufficient.
However, be aware that Section 713.20(8) provides: “A lien waiver or lien release that is not substantially similar to the forms in subsections (4) and (5) is enforceable in accordance with the terms of the lien waiver or lien release.”
At first blush, this would seem to contradict the previous statement. Reading these two provisions together, if a roofer or supplier agreed to use a certain form and did not object or seek to revise it, they may be forced to use a non-statutory form. As a practice pointer, do not be afraid to write on releases and exempt out things like retainage, unpaid change orders, and other claims for payment.
Author’s note: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.
Trent Cotney is Florida Bar Certified in Construction Law, General Counsel and a director of the Florida Roofing and Sheet Metal Contractors Association (FRSA), a director of the West Coast Roofing Contractors Association (WCRCA), and a member of the National Roofing Contractors Association (NRCA), Midwest Roofing Contractors Association (MRCA) and several other FRSA affiliates.
For more information, contact the author at 813-579- 3278 or visit www.trentcotney.com.
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