Building Code Administrators and Inspectors Florida Principle and Practice Licensure Practice Exam

What type of payments are considered improper if an owner pays a contractor without obtaining a waiver or release from a lienor?

1. Refused payments

2. Improper payments

3. Unrecoverable payments

4. Insufficient payments

The correct answer is: Improper payments

When an owner pays a contractor without obtaining a waiver or release from a lienor, these payments are classified as improper payments. This identification is rooted in the need to protect property owners from potential liens that may arise from subcontractors or suppliers who have not been compensated. If an owner pays a contractor for work completed without securing a waiver, the contractor's debt to those lienors remains unresolved. Consequently, lienors maintain the right to file a lien against the property, even after the owner has made payments, potentially leading to financial disputes or unanticipated liabilities for the owner. This classification emphasizes the importance of ensuring all parties involved in a construction project are paid before an owner disburses funds. It is a precautionary measure safeguarding the owner's investment and property rights. Thus, the requirement to obtain a waiver or release is vital to prevent these payments from being deemed improper.