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Conditional Waiver and Release Upon (i) Progress Payment and (ii) Final Payment Forms

1 month ago

Hello, I have three questions with respect to the Conditional Waiver and Release Upon Progress Payment and Final Payment Forms. For context, I am a property owner and would like to limit liability from both tort claims and non-payment by my general contractor (“GC”) or his suppliers/subcontractors (“SS”). I only contract with/pay my GC directly, he then pays the related suppliers/subs.

1. For the conditional waiver and release upon progress payment form, must I require my GC to get a release form signed by each of his SS for every progress payment?

2. Can I instead have the GC sign one conditional payment form in which he agrees to pay all SS and indemnify me from any liens or other claims any SS might bring against me? This way I can just have the GC list the names of all SS to one Conditional waiver/release form instead of requiring 10+ each time.

3. If I can’t do #2, can I at least do this for the final payment release?. I want to put the responsibility on the GC to ensure all SS are paid and have no grievances/claims (payment or injury) against my property resulting from the construction since he was in direct contact with them, managed the construction site, and is in the best position to ensure payment/prevent injuries/claims arising from his conduct or SS.

Senior Legal Associate Levelset

1. The best way for an owner to protect themselves is to obtain lien waivers from every party performing work on the project. Granted, an owner isn’t required to get waivers from everyone on the job. However, a lien waiver obtained from a project’s general contractor will only waive that contractor’s right to lien.

2. Note that under NRS § 108.235(2), a prime contractor who has been paid in full will be required to defend the property owner (at the contractor’s expense) if a subcontractor or supplier ends up filing a mechanics lien on the project. To be sure, that section reads: “In all cases where a prime contractor has been paid for the work, materials or equipment which are the subject of a notice of lien recorded under NRS 108.221 to 108.246, inclusive, the prime contractor shall defend the owner in any action brought thereupon at the prime contractor’s own expense.” So, while having a contractor agree to indemnify the owner for their work might be a comforting additional layer of protection, a contractor who’s been paid in full is already required to provide that defense.

And finally – note that even when a contractor might be required to defend an owner if a sub or supplier files a lien claim, many owners prefer to avoid the situation altogether by having their contractor obtain lien waivers in exchange for payments. While a contractor may ultimately have to pay for the defense against a lien claim, avoiding that headache altogether is often a worthwhile cause – especially considering there are tools available that make collecting lien waivers an easy task.

Great question!

If you have any other questions about Nevada lien waivers, here’s a great resource: Nevada Lien Waivers Guide and FAQs.

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