What are the Different Releases in Florida?
a. Broad Release – Let’s say you are a general contractor, and you are paying a subcontractor. This means that you are giving a check, and they are giving you a release form. Ideally, you should receive a broad release form that states that it releases all claims the subcontractor could ever have, such as delay claims, any extended overhead and general conditions, any material price escalations, etc. Basically, once you get the broad release, it means that everything is wiped off and you start from scratch.
b. Narrow Release – A narrow release is of course the opposite of a broad release. Let’s say you are a general contractor who needs to give a release form to the owner once they give you the check or you are a subcontractor, you ideally need a release that gives away the least amounts of rights as possible. You should have some options to lay claim in the future on executed change orders, etc.
What are the Statutory Release Forms in Florida?
Florida's Chapter 713 lays out the statutory release forms. These forms are simple and direct, reducing the risk of misinterpretation.
Progress Payments Release Form: This release form is straightforward. By signing, the lienor waives and releases their lien rights and claims for labor, services, or materials furnished up to a specific date. It's important to note that this release doesn't cover labor, services, or materials provided after the specified date.
Final Payments Release Form: Much like the progress payment form, the final payment release form operates sans an expiration date. Once signed, it takes effect immediately. Signing this form means relinquishing all lien rights from the present onward.
Custom Release Forms: Beyond statutory forms, custom releases exist. These typically encompass more complex language, potentially translating into a broader waiver of rights. Custom releases often include clauses that release claims, change orders, materials, fees, costs, losses, and more. The inclusion of an insignificant sum, like $10, is a strategic move to validate the exchange of rights.
What are the top Strategic Considerations for Florida Releases?
Incorporating Release Forms in Contracts: Some contracts stipulate the use of specific release forms, either through naming or referencing Exhibits. If you sign such an agreement, it's imperative to abide by its terms and provide the designated forms accordingly.
Negotiating Release Forms: Negotiating the forms or releases during the broader contract negotiation phase is a prudent approach. Don't assume that the provided forms are your only option. You can propose using the forms outlined in Chapter 713, aligning them with your payment schedule.
The Crucial Match: Through Date and Dollars
One golden rule when signing a release is to ensure congruence between the 'through date' and the payment amount. The 'through date' is the release's effective date. It's not the dollar amount that governs the release but the 'through date.'
What are Conditional Releases?
Conditional releases are vital instruments when funds are uncertain. These statements make the release contingent upon receiving payment. For instance, you might add a condition such as, "This waiver and release is conditioned upon and not effective until the undersigned receives paid funds of $__________." This guards your interests when releasing claims before payment.
Remember: The term "Conditional" in the title alone doesn't suffice. The document must explicitly contain conditional language to be legally effective.
In Florida's construction industry, release forms safeguard your interests. Understanding the nuances of broad and narrow releases, grasping statutory forms, tactfully negotiating contracts, and ensuring alignment between through dates and dollars are the steps that lead to a harmonious project outcome. And remember, when uncertainty looms, conditional releases are your safety net. By mastering the art of construction release forms, you can navigate the landscape with confidence and precision.