If you are an owner, you should receive a contractor’s final payment affidavit, which you are required to receive at least 5 days before anyone you hire directly files a construction lien foreclosure lawsuit. The contractor’s final payment affidavit should identify those lienors that are still owed money. Notably, as an owner, you can request your contractor or anyone you directly hire to furnish such affidavit.
If the contractor’s affidavit required in this subsection recites any outstanding bills for labor, services, or materials, the owner may, after giving the contractor at least 10 days’ written notice, pay such bills in full direct to the person or firm to which they are due, if the balance due on a direct contract at the time the affidavit is given is sufficient to pay them and lienors giving notice, and shall deduct the amounts so paid from the balance due the contractor. Lienors listed in said affidavit not giving notice, whose 45-day notice time has not expired, shall be paid in full or pro rata, as appropriate, from any balance then remaining due the contractor; but no lienor whose notice time has expired shall be paid by the owner or by any other person except the person with whom that lienor has a contract.
This section allows an owner to pay directly those lienors that preserved their construction lien rights (by serving a Notice to Owner) after giving the contractor 10-days’ notice.
Section 713.06 contains germane information for an owner that receives a contractor’s final payment affidavit. Many owners do not capitalize on this, but this allows an owner to start paying those listed entities downstream from the contractor directly (ideally, eliminating their lien rights) all the while reducing any monies that would be owed the contractor.
Please contact David Adelstein at firstname.lastname@example.org or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.