In our newest episode, we dissect the labyrinth that is the lien release process, spotlighting three easily avoidable yet potentially costly mistakes.
To kick off, we dive into the perils of Mistake 1: Using the Wrong Form. It might seem straightforward, but did you know the form you should use varies depending on whether you’re a General Contractor (GC) or a sub? A general rule to remember: when you’re cashing a check, offer a narrow release; and when you’re cutting one, ensure it’s broad. Contractually agreeing to a specific release form? You’re bound to it. And here’s a pro-tip: when drafting your release, incorporate any exceptions directly. Do not depend on external documents or logs.
Moving on to Mistake 2: Not Using Conditional Language. A conditional release is your safeguard when money hasn’t changed hands. Phrases like “Notwithstanding anything to the contrary…” are your armor in ensuring you’re paid before the release gets activated. And, for the GCs out there, be vigilant about those releases from sub-subs or suppliers, which might masquerade as conditional but are anything but.
Finally, the third pitfall, Mistake 3: Using the Wrong “Through Date”. This date is crucial as it sets the release’s effective timeline. If there’s a mismatch between the date and the payment, adjustments are essential to protect your interests
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About Alex Barthet
Alexander Barthet is a board certified construction attorney in Florida and holds a B.S. in mechanical engineering. He manages The Barthet Firm, a ten lawyer construction law firm in Miami, and maintains a construction law blog at www.TheLienZone.com. He can be reached at 305-347-5295 or alex@barthet.com.
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