A subcontractor submits an invoice for completed work but fails to include required lien waivers. What should the general contractor do?
Correct Answer
C) Withhold payment until proper lien waivers are provided
Proper lien waivers are essential for protecting the owner and general contractor from potential lien claims. Payment should be withheld until all required documentation is properly submitted and executed.
Why This Is the Correct Answer
Withholding payment until proper lien waivers are provided is the correct and legally prudent approach. Lien waivers protect both the general contractor and property owner from potential mechanic's lien claims by subcontractors or their suppliers. Florida law requires proper documentation before payment to ensure the contractor has legal protection. Making payment without proper lien waivers exposes the contractor to potential double payment if liens are later filed.
Why the Other Options Are Wrong
Option A: Pay the invoice immediately to maintain good relationships
Partial payment without proper lien waivers still exposes the contractor to full lien liability, and there's no legal basis for the arbitrary 90/10 split - proper documentation is required before any payment.
Option D: Pay 90% of the invoice and hold 10% until waivers are received
Paying immediately without lien waivers creates significant legal and financial risk, as the contractor could face mechanic's liens even after payment, potentially requiring double payment to clear title issues.
Memory Technique
Think 'WAIVER FIRST' - just like you wouldn't drive without insurance, don't pay without proper lien waivers protecting you from future claims.
Reference Hint
Florida Building Construction Standards - Chapter 713 (Mechanics' Liens) and contract administration sections
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