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How do we guarantee final payment if the contractor is requiring a Final Lien Waiver prior to making payment?

MassachusettsLien Waivers

A CONTRACTOR (CLIENT) IS REQUIRING "FINAL LIEN WAIVER" IN ADVANCE OF FINAL PAYMENT. QUESTION: How can we be assured of receiving our FINAL PAYMENT if we execute the Final Waiver prior to getting the payment? WHAT IS THE TYPICAL PROCESS? Thanks

2 replies

Oct 16, 2019
Massachusetts is one of the relatively few states which requires the use of a specific statutory form for lien waivers. So, when a lien waiver is being exchanged in Massachusetts, it must generally be made in the form set out by § 32(4) of the state's lien statute (titled "Partial Waiver and Subordination of Lien"). And, using a non-statutory form will generally result in an invalid lien waiver anyway - so reminding a customer of Massachusett's lien waiver rules might be helpful. Further, requesting that some final lien waiver be submitted after payment is received might be useful too, if you can reason with your customer (though, as mentioned above, that waiver might not really be effective to do anything). Plus, it could also be valuable to remind a customer that lien rights only exist for claimants who haven't been paid. So, if full payment is in hand, and if the contract can prove that, then there's no need to worry about a mechanics lien being filed by a party who's paid in full. That means that offering to submit a document stating payment has been made in full (after payment is made, of course,) may ultimately provide the same effect as a waiver. I hope this was helpful! For more on the Massachusetts lien waiver rules: Massachusetts Lien Waivers Guide and FAQs.
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Oct 16, 2019
This is very useful and valuable insight. Thank you LEVELSET.
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