Hi good morning I’m Jose , i’m having a little problem with payment contractor wants me to remove liens in order to get paid what form should I send him and what should I tell him ? Should I signed a conditional lien
waiver
2 replies
Dec 2, 2019
It might be helpful to first clear up a little confusion. First, it's important to understand whether you're looking for a lien release or a lien waiver. Generally, a lien release will only be necessary where a mechanics lien filing has actually taken place. And, a lien waiver is typically exchanged for payment sort of like a receipt, and that waives the ability to file liens going forward. Further discussion on that topic here: Lien Waiver vs Lien Release: What’s the Difference?
Further, I think it'd also be helpful to dive into when lien waivers are generally exchanged, as well as the different types of waivers.
Exchanging mechanics lien waivers for payment
It's extremely common for a contractor to request that a lien waiver be exchanged for payment. As mentioned above, waivers act a lot like receipts - they show that subcontractors are being or have been paid, and they let the contractor and owner breathe easier knowing liens won't pop up out of nowhere creating issues. However, different waivers will be appropriate for different situations.
Types of mechanics lien waivers
Generally, lien waivers are either conditional or unconditional. Conditional waivers are usually submitted by subcontractors if a waiver is required before payment changes hands. Conditional waivers won't be effective until the payment is actually made. Conditional waivers can be partial/progress waivers (for progress payments, or otherwise where final payment isn't being made). Or, they can be final (when no further payments will be made on the job, besides the one at-hand).
Unconditional waivers are effective immediately once they're submitted, regardless of whether payment is actually made. Just like conditional waivers, they might be submitted based on partial/progress payments or based on final payment. In either case, an unconditional waiver typically shouldn't be submitted unless the payment on the waiver has actually been received.
First, you're probably going to want to consult with an attorney to make sure that you get the documentation right. But you should be able to provide him with conditional lien waivers in exchange for a check. So long as the check clears, the waiver is good.