What are your lien rights under a “paid when paid” contract?
Posted: March 23rd, 2026
Written By: Mark Siemer
What are your lien rights under a “paid when paid” construction contract?
Entering a “paid when paid” contract can seem like a routine part of doing business as a subcontractor, but it hides serious risks and are based on shaky legal grounds. Importantly, in Florida, your lien rights are separate from your contract rights. Meaning, a contract cannot generally limit your lien rights.
What does “Paid When Paid” really mean?
A “Paid When Paid” contract is a very simple concept that is complicated by legal precedent. The intention of a “Paid When Paid” contract is exactly what it sounds like. The general contractor does not have a duty to pay the subcontractor until the general contractor has been paid by the property. It is a risk shift clause that shifts a substantial portion of the risk of non-payment from the general contractor to the subcontractors.
Are there exceptions to a “Paid When Paid” provision?
Courts generally disfavor “Paid When Paid” clauses but will enforce them when it is the clear and unambiguous intent of the parties. However, the Courts look for ways to find the clause is vague and ambiguous so that they can interpret the clause as a timing device instead of a condition precedent of payment. Meaning, they can construe the contract as setting a reasonable time for payment instead of creating a hard and fast trigger for payment.
While many contracts contain what is essentially “magic language” that guarantees the clause on its face is a condition precedent to payment, the courts will look beyond the subcontract to the prime contract to find a conflict. If the prime contract says that the property owner does not have to pay the general contractor until the general contractor has presented proof it has paid the subcontractors and the subcontract says that the general contractor does not have to pay the subcontractor until the general contractor has been paid, the court will find those two clauses are in conflict, and so it will interpret the “Paid When Paid” clause as setting a reasonable time for payment instead of creating a condition precedent.
How can I force payment?
Subcontractors tend to have the weakest negotiating position and therefore tend to have the least contractual protection. However, the lien statutes still protect diligent subcontractors that preserved their lien rights because lien rights are separate and distinct from contract rights. Florida law does not allow lien rights to be released or waived in advance. So, if subcontractor gives proper notice to owner and then properly records its claim of lien, it can still bring an action against the property owner to enforce its lien rights even if the general contractor and the property owner are waging a multi-year legal battle to determine payment.
Practical takeaways
Subcontractors should approach any “paid when paid” clause cautiously and they always need to know what provisions are in the prime contract that might impact it. Plan in advance to preserve your lien rights and talk to an attorney about potential conflicts in language that might exist between the subcontract and the prime contract.
Mark Siemer, is a Construction Attorney with Volk Law Offices, P.A., has 8 years’ experience and can be reached at help@volklawoffices.com or by visiting VolkLaw online at VolkLawOffices.com. Read more about Attorney Mark Siemer. Call for a consultation: (321) 726-8338.
The matters discussed here are general in nature and are not to be relied upon as legal advice. Every specific legal matter requires specific legal attention.
The law is constantly changing and matters discussed today may not be the same tomorrow. Legal matters are also subject to different interpretations by attorneys, judges, jurors and scholars. No attorney-client relationship is intended or created as a result of matters discussed here. You should consult counsel of your choice if you have any dealings in these areas of the law. Volk Law Offices, P.A. and its attorneys make no representations or warranties with respect to the accuracy or completeness of the matters addressed.