A late check puts pressure on payroll, suppliers, and every other job you’re running. The pressure gets worse when the payment comes with a condition: sign this revised agreement or release first. That’s exactly the moment to slow down and read.
The language in these documents can decide how much you’re paid, when you’re paid, and whether you keep the right to pursue the rest. At Brick Business Law, P.A., we treat construction payment problems the way contractors experience them: as a cash-flow problem first, with legal rights to protect along the way. Before you sign, a contract dispute attorney can tell you what the document actually requires and what it takes away.
Key Takeaways
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In Florida, a pay-if-paid clause shifts the risk of owner nonpayment to a subcontractor only if the contract says so clearly.
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Florida caps retainage on most public projects at 5%. On private projects, your contract sets the rules.
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A lien release can give up more than the payment it’s tied to. Match the release to the money you actually receive.
What Actually Triggers Payment Under Your Contract?
Some contracts pay on a schedule. Others make your payment depend on another event, such as the owner paying the general contractor. That difference decides who carries the risk if the money never arrives.
Pay-If-Paid vs. Pay-When-Paid: What’s the Difference?
A pay-if-paid clause tries to make the owner’s payment a condition of your payment. If the owner never pays, you may never be paid. A pay-when-paid clause usually deals only with timing. It can delay payment for a reasonable time, but it doesn’t erase the obligation to pay.
Florida courts take this distinction seriously. Since the Florida Supreme Court’s decision in Peacock Construction Co. v. Modern Air Conditioning, Inc. (1977), the Florida Supreme Court ruled that ambiguous “pay-when-paid” final payment clauses in construction subcontracts are absolute promises to pay within a reasonable time, rather than conditions precedent (Justia Law, 353 So. 2d 840, 1977). Courts have generally treated these clauses as timing provisions unless the contract clearly and unambiguously shifts the risk of owner nonpayment to the subcontractor. The exact wording controls.
Before you sign, ask two questions: When is payment due? And what has to happen first?
How Much of Your Payment Can Be Held Back as Retainage?
Retainage is the percentage of each payment held back until the project, or a defined part of it, is finished. How much can be withheld depends on whether the job is public or private:
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Public projects: Florida law generally caps retainage on state and local government construction contracts at 5% of each progress payment (§§ 218.735 and 255.078, Fla. Stat.), with limited exceptions.
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Private projects: No Florida statute sets a cap. The contract controls, so the number you agree to is the number you live with.
What Has to Happen Before Retainage Is Released?
The percentage is only half the issue. The release conditions decide when you actually see the money. Look for:
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How completion or milestones are defined
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Owner, architect, or other required approvals
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Punch-list requirements
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Required closeout documents
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A deadline for releasing retained funds
Vague milestones and approvals left to someone’s discretion can leave your money stuck long after the work is done. If you can’t tell from the contract exactly when retainage comes back, negotiate that point before you sign.
What Are You Giving Up When You Sign a Release to Get Paid?
Possibly more than you think. A payment release deserves the same scrutiny as the contract itself. Depending on the wording, it can waive lien rights and other claims tied to the project.
Does the Release Match the Payment?
Florida’s construction lien law includes statutory forms for waiving and releasing lien rights on progress payments and final payment (§ 713.20, Fla. Stat.). Even with a standard form, check three things: the dollar amount, the time period or “through” date it covers, and whether it takes effect only once you’ve actually been paid.
Some releases reach beyond lien rights. Before you sign, look for language that could give up:
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Unpaid contract balances
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Pending or disputed change orders
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Delay claims and other open claims
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Rights tied to work outside the payment period
The test is simple: the rights you release should match the money you receive. When they don’t, the fix is often straightforward. List open change orders and claims as exceptions on the release, or make the release conditional on the payment clearing.
“Getting paid is the immediate goal, but the fine print matters. Agreeing to unfavorable terms to fix today’s payment problem can leave you more exposed on the same project down the road.”
— Kevin Brick, Brick Business Law, P.A.
What Can You Do When a Construction Payment Is Withheld?
You may have several options: rights under your contract, Florida’s prompt payment laws, and the construction lien law. They overlap, but they aren’t interchangeable. Each has its own requirements and deadlines, and missing one doesn’t necessarily close the others.
Timing matters most with liens. Under Florida law, a claim of lien generally must be recorded within 90 days after you last furnished labor or materials to the project (§ 713.08, Fla. Stat.). Contractors who don’t have a direct contract with the owner may also need to serve a notice to owner much earlier. Waiting to see whether the check shows up can cost you the lien.
Keep the Records That Protect Your Claim
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Signed contracts and amendments
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Invoices and payment applications
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Change orders and supporting documentation
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Notices and project correspondence
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Records of completed work and amounts still owed
With those in hand, a lawyer can help you decide whether negotiation, a formal demand, a lien, or litigation makes the most sense for the amount at stake and the relationship involved.
Should You Sign a Revised Agreement to Get Paid?
Not until you know exactly what changes. New terms offered in exchange for payment can shorten deadlines, waive claims, or add obligations that outlast the current payment. Compare the new document to the old one line by line, and ask what you’re getting in return.
Cash in the door matters. But accepting worse terms to solve this month’s payment problem can create a bigger one on the same project later.
How Can Florida Contractors Protect Their Payment Rights?
Payment risk is easiest to manage before the job starts. Before signing your next contract, confirm what triggers payment, how retainage is released, what releases you’ll be expected to sign, and how disputes will be handled. Negotiating one clause up front costs far less than litigating it later.
Brick Business Law, P.A. represents Florida contractors and businesses in contract disputes and business litigation and helps them review and negotiate agreements before problems start. From our offices in Tampa, St. Petersburg, and Sarasota, we weigh your legal options against what matters to the business: cash flow, ongoing operations, and relationships worth keeping. If an unpaid balance has already become a collections problem, our business collections attorneys can help.
If payment is being withheld, or you’ve been asked to sign a revised agreement or release, contact Brick Business Law before you sign. Call 813-669-0122 to schedule a free consultation.
Related: Are rising material prices behind the dispute? Read Material Costs Changed After You Quoted the Job. Now What?
This article provides general information, not legal advice. Reading it does not create an attorney-client relationship. For advice about your situation, contact a lawyer.