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Homeowner, requesting my lien waivers with amounts paid to my sub-contractors

I am a General Contractor, performed work for a homeowner, he requested paid in full lien waivers and I sent to him. He replied stating he wants my paid in full lien waivers to my material companies and subcontractors with the amount on it what I paid them

1 reply

May 11, 2020

Minnesota is not a state with statutory mechanics lien waiver forms. So, Minnesota lien waivers don't really have to have amounts paid in order for the waiver to be valid and enforceable. If unconditional final lien waivers have been provided, then there's little fear - subs' and suppliers' lien rights have been waived. If conditional waivers were given, it might be less cut and dry - so it's natural for an owner to want to be sure the amounts on the waivers match the amounts being paid out. Still, with the waiver in hand and full payment made, lien rights shouldn't be much of a concern. What's more, it looks like Minnesota is generally considered an "unpaid balance" state. So, lien rights likely aren't really available to subs and suppliers when their GC has been paid in full. Meaning, as long as your customer fully pays you, then the customer's lien liability is likely diminished.

Getting paid when an owner is demanding lien waivers

With all of that being said, two big ideas should guide decision making, to some degree. For one, know that providing lien waivers with payment amounts won't affect your rights. If you've been billing appropriately, it should really be a non-issue. Owners should understand there's a profit margin built into what you're being paid. Plus, even if the owner disagrees with your margin, that doesn't actually change the fact that they owe you payment. Additionally, know that you don't have to do whatever an owner says to get paid. If your contract doesn't require lien waivers be exchanged, then that's probably not a required prerequisite to getting paid. Ultimately, then, an owner disagreeing with the waiver form you chose doesn't really matter - they owe you what you're due. And, those recovery tools mentioned in the paragraph above could be useful for forcing payment. Working with the owner is the best way to make sure payment gets released without issue. But, if an owner is being particular, know that they don't have full unilateral control over the situation. More on that here: Do I Have to Sign a Lien Waiver to Get Paid?

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