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Do I have to file a lien waiver BEFORE I receive payment in full?

I am a contractor who has not yet been paid in full for our work. The customer states he will not pay until he has lien waivers from all of my subcontractors (who I hired and paid myself) as well as my company. He insists that he has the right to receive this waiver before he will pay. In WI statutes 779.05 (2), it says "a lien claimant...is entitled to refuse to furnish a waiver unless paid in full for the labor...to which the waiver relates." Who's right? Payment first and then a signed lien waiver?

1 reply

Feb 21, 2022

I read 779.05 a little differently. You paid all of your subs, so you are entitled to get a lien waiver from them. Best practice would have been to get that lien waiver at the same time you paid them in full, because it can be hard to track them down once paid. The owner has the same right to obtain a lien waiver from the prime before final payment (I understand you are the prime here). The statute is silent on whether the owner can require the prime to collect lien waivers from all of the subs before paying the prime's final invoice. Usually there is something in the written contract about this. Check your contract and feel free to contact me for a review. Usually this turns out to be a non-issue because the subcontractors and suppliers either (1) did not timely provide initial notice to the owner, or (2) do not timely file their notice of intent to lien... Primes in your spot can often explain to the owner that there are no lien concerns because no subs or suppliers have taken any necessary steps to protect their lien rights. Feel free to contact me trough my website, Michaeljohnsonlegal.com

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