Construction Draw Schedule Information
The draw schedule specifies: the construction milestones (foundation, framing, rough-in, drywall, finish work, and final inspection), the percentage of the total loan disbursed at each milestone (e.g., 10% at foundation, 15% at framing, etc.), the inspection requirements (the lender's inspector must verify the work is complete before releasing funds), and the lien waiver requirements (the contractor and subcontractors must provide lien waivers for work completed and paid in each draw). The draw process: the contractor submits a draw request (documenting the completed work), the lender's inspector verifies the work (comparing the actual progress to the draw schedule), the lender disburses the funds (after receiving satisfactory inspection results and lien waivers), and the contractor pays the subcontractors (using the drawn funds).
Florida Legal Definition
Construction draw schedules in Florida are governed by: the construction loan agreement and Florida construction lien law (Chapter 713). Under Chapter 713: the property owner must obtain lien releases from the contractor and subcontractors as progress payments are made (§713.20), the Notice of Commencement must be posted and recorded before construction begins (§713.13), and the contractor must provide an updated contractor's affidavit with each draw (certifying the status of payments to subcontractors and suppliers). Under Florida practice: the lender typically requires: an inspection before each draw, a title update (confirming no new liens have been filed), and executed lien waivers from all payees.
How It's Used in Practice
In practice, attorneys manage the construction draw process for lenders, borrowers, and contractors. For lenders, the attorney: drafts the draw schedule and disbursement requirements, reviews draw requests and lien waivers, coordinates the inspections and title updates, and addresses any issues (lien claims, payment disputes, and construction delays). For borrowers, the attorney: reviews the draw schedule for fairness, monitors the contractor's progress, ensures lien waivers are obtained, and addresses change orders (modifications to the work that affect the draw schedule). For contractors, the attorney: prepares draw requests, gathers lien waivers from subcontractors, provides the contractor's affidavit, and addresses payment disputes.
Key Takeaways
- Draw schedule: stage-by-stage disbursement tied to construction milestones.
- Each draw requires: inspection + title update + lien waivers.
- Contractor's affidavit: certifies subcontractor payment status.
- Notice of Commencement must be recorded before construction.
- Monitor progress and obtain lien releases at each draw.
Disclaimer: The information and opinions provided are for general educational, informational or entertainment purposes only and should not be construed as legal advice or a substitute for consultation with a qualified attorney. Any information that you read does not create an attorney–client relationship with Barnes Walker, Goethe, Perron, Shea & Johnson, PLLC, or any of its attorneys. Because laws, regulations, and court interpretations may change over time, the definitions and explanations provided here may not reflect the most current legal standards. The application of law varies depending on your particular facts and jurisdiction. For advice regarding your specific situation, please contact one of our Florida attorneys for personalized guidance.
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