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Top Three Avoidable Release Mistakes That You Need To Know About

By Alex Barthet

As construction lawyers here in Florida, we are often asked about releases, specifically about these three release mistakes.

  1. Using the wrong form of release when exchanging money for a release

The form of partial and final waiver of release that you should use depends primarily on where you are in the chain of contracts. Are you the general contractor? Are you a subcontractor? Are you a sub-subcontractor or a supplier? The general rule is this.­ Try to give the narrowest release possible when you are the one being paid. That is, giving away the fewest amount of rights when you are receiving a check. If the role is reversed and you are giving a check, you should try to get the broadest release that you can possibly obtain when you hand over that check.

Let’s look at some forms of releases so that you can understand the language that distinguishes a narrow release from a broad release.

i. The Statutory Chapter 713 Releases

These releases are contained in the lien statute chapter 713. The forms that exist in this statute are issued either upon progress payment or final payment. Let’s take a look at the language that differentiates the two forms.

a. Upon progress payment

WAIVER AND RELEASE OF LIEN UPON PROGRESS PAYMENT

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) to (insert the name of your customer) on the job of (insert the name of the owner) to the following property:

(description of property)

This waiver and release does not cover any retention or labor, services, or materials furnished after the date specified

Date

Sign

In this form, you will fill in the amount that is being paid and the through date the amount covered.  This release basically gives away your lien right in exchange for partial payment.

b. Upon final payment

WAIVER AND RELEASE OF LIEN UPON FINAL PAYMENT

The undersigned lienor, in consideration of the final payment in the amount of $ _________, hereby waives and releases its lien and right to claim a lien for labor, services, or materials furnished to (insert the name of your customer) on the job of (insert the name of the owner) to the following property:

(description of property)

Date

Sign

The language is almost identical to the release issued upon a progress payment, with a space where you can fill in the amount of money

Source: http://feedproxy.google.com/~r/lienzone/~3/qi3lNko4ILo/

  

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