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Is it necessary to have a supplier lien release list a dollar amount, or would unconditional with a date (no amount), suffice?

OregonLien Waivers

Is it necessary to have a supplier lien release that lists a dollar amount, or would an unconditional through a date, no dollar amounts, suffice? I would want dollar amounts from our subs, just wondering if no dollars for suppliers would offer the same protection. Sometimes we have a really hard time getting lien releases from our vendors for the correct dollar amount, as my amounts do not match their amounts. A lot of times it's due to coding the purchase to the wrong project on their end. Part of the problem is that when I submit my pay application to the GC by the 20th of the month, I don't have all of the dollars spent through the end of the month, so I have to detail what I have in my system, which doesn't always match the dollars in their system. And, you get into the coding issues as well. My GC is expecting a lien release from vendor ABC for $5,000, but the vendor shows only $3,000 got coded to the project, so they refuse to sign my lien release.

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Sep 17, 2019

Oregon is not one of the 12 states with statutory lien waiver forms, so a lien waiver can say (or not say) whatever the parties decide, and decide to accept. Waivers do not necessarily need to include a payment amount in order to be effective, but parties should exercise caution in what the waiver actually says. If a waiver includes a "through date" and notes that the rights waived are for all work performed up to the date set forth on the waiver document, no specific amount would necessarily need to be included. And, the waiver could set out specific exclusions, as well. In fact, many progress waivers include a through date, and an "exceptions" section. Whether a GC or property owner will accept a waiver with with no specific payment amount listed is a business decision, but it is likely that a waiver waiving rights for all work performed through a specific date would be sufficient and acceptable. It is important to use good judgment and caution with respect to lien waivers, however. Unconditional waivers should not be provided until the money is actually received and in hand. With respect to waivers, it can be more important what the waiver says happened than what has actually happened. So, especially if the waiver is unconditional and lists a through date, it is imperative that the payment for all work through that date has actually been received in order for the waiving party(ies) to remain protected.

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Sep 17, 2019

Your question makes perfect sense. These are very common issues that arise between contractors and vendors in the lien waiver process. The whole thing is like apples (pay applications monthly based on installed %s) and oranges (invoices on 30-day credit terms based on supplied materials). And, unfortunately, there are no easy answers here. I'll break down some of the issues for you. 1) Do you need $ amounts on the waiver - legally? Maybe, maybe not. This will depend on where you are. There are some states that have strictly regulated lien waiver forms, such as California. When you're in these states there is a risk in using forms that don't comply with the statutory forms. Most of the statutory forms have a dollar amount field, and therefore, exchanging a form that doesn't have this field is a potential violation. Most case law is not very developed on these points, though, and there isn't much guidance. Many lien waiver laws -- like California, Texas, Mississippi, etc. -- is really only 5 years old! If you are in Oregon (as seems to be the case per your location), lien waiver forms are unregulated. Therefore, leaving the dollar amount off will likely be okay legally/technically. 2) Do you need $ amounts on the waiver - practically? Kind of, yes. Now let's turn to whether you can leave the dollar amount off the waiver as a practical matter. The answer here is more complicated. If we're talking about a final, unconditional lien waiver, you will be pretty safe leaving the dollar amount off. In fact, most states with required lien waiver forms do not require dollar amounts in these waivers. The waiver is final, it's unconditional, and that is pretty clear. For all other waivers, however, it's more tricky. If you don't specifically state the dollar amount, then you'll need to have something in your waiver that lets you calculate the amount. If you select a date, for example, then what you're saying is that the waiver is effective for some amount of money related to materials furnished before the indicated date. So, in other words,s you STILL need to calculate the dollar amount. You're just deferring the calculation to be done somewhere else and at some other time. Usually, this presents ambiguities that can come to bite you. After all, if you are finding it difficult to calculate the dollar amount at the time of exchanging the waiver, just imagine how hard it will be to agree on the calculation in the event of a dispute :/ And finally, if the vendor is paying attention, they will be reluctant to sign something that could be interpreted wider than they would hope. Conclusion Trying to keep the GC happy (to meet their requirements) and dealing with the practical challenges presented by the vendor (to match their billing) is definitely tough. The unconditional, final lien waiver could save the day in some of the hairiest situations, but otherwise, you may be stuck having to deal with the balancing act.

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