Tagged: Lien Waivers
Hi I live in Utah I have my own painting business. Just recently started this business. I finished a project now I am being asked to fill out a lien waiver before receiving payment. Should I move forward? Any advice?
Utah Mechanics Lien Waivers
Utah is one of only 12 states that provide statutory lien waiver forms. This means that the document itself may be substantially similar to the form provided by the law in order to be valid. However, alternate forms can be used. To protect against waiving any additional rights, the best practice is to use the statutory forms. These rules can be found in Utah Code §38-1a-802.
Choosing Between Utah’s Statutory Progress & Final Payment Waivers
Utah’s lien waiver scheme is a bit different than most other states as it only provides only two types of waivers, a progress payment waiver, and a final payment waiver. Neither of these waivers are labeled as conditional or unconditional. However, a close look at the language suggests that they are both conditional waivers; “the document becomes effective to release and the undersigned is considered to waive any notice of lien or right…. once the check is paid by the depository institution on which it is drawn.”
Therefore, the Utah statutory lien waivers will not be effective unless payment is made. In addition to that, Utah lien law adds extra protection by declaring that the waiver will be void if the check fails to clear for any reason. Since you mentioned that the project is complete, a final payment lien waiver should be used. But, if retainage is still being withheld, or there are any pending change orders, then using a progress payment form will be your best bet.
For a full breakdown of each form, along with downloadable templates and instructions on how to fill them out:
What to Look Out For If Using a Non-Statutory Lien Waiver
As mentioned above, although Utah lien laws provide statutory forms, the statute also states that alternate forms can be used as long as they contain some required information. This means that parties can choose to their own forms, so there are two things to keep in mind.
One, if payment is yet to be made, contractors should always use a conditional lien waiver. They are just as valid as unconditional waivers, except they will not be effective until payment is made. And two, look out for any additional language that may affect other rights such as an indemnification clause, or waiving other causes of action. See: “Should You Sign That Lien Waiver?” for more information.