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If a general contractor gives me a lien waiver for work he subcontracted, do I need a lien waiver directly from the subc

IllinoisConstruction Contract

If a general contractor gives me a lien waiver for work he subcontracted, do I need a lien waiver directly from the subcontractor (like plumber, electrician or material provided like for HVAC etc) or is the lien waiver from the contractor good enough? It is the general contractor with whom I am dealing directly and I have no contact with the sub contractors except when I visit the site

1 reply

Nov 5, 2019

This is a common misconception in the construction industry. Just because you have a lien waiver from your general contractor, doesn't mean you're in the clear. Property owners should require their general contractors collect lien waivers from everyone down the payment chain before payment is released. That's the inherent risk with the construction payment chain itself. Just because a property owner has made proper payments to their GC, there's no guarantee that the subcontractors and material suppliers on the project are getting paid in turn. If they aren't, then the unpaid sub or supplier will have the right to file a mechanics lien; regardless if they have a direct contract with the property owner. And keep in mind, that a mechanics lien is filed against the property being improved, not the person who failed to make payment. Meaning that the property owner will ultimately be responsible to pay off any liens filed against the property. The best way to ensure everyone is paid, and protect oneself from a lien filing, is to require lien waivers from everyone on the project. Here's an article written by our CEO Scott Wolfe Jr. that breaks down all the lien waiver best practices: How to Handle Requesting and Tracking Lien Waivers.

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