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Lien Waiver Dates of Service for paid material

OhioLien Waivers

Hello, An issue has come up regarding our material suppliers. The date on our lower tier supplier lien waivers must match the date of the pay application we are providing our customer. When providing the waiver, we put the same date, but the date and amount of material we purchased is from the previous month. EX: Pay App dated 04.30.20 withe waiver dated the same. The backup of the paid invoices for the waiver is thru 03.31.20. They will not sign the waiver. We view the wavier as, we have paid the supplier in April for the March invoices. They see it as only being paid thru the end of March and will not sign it as April. Any suggestions for clarification? thanks

1 reply

May 12, 2020
It's pretty common to run into some speed bumps when navigating a customer's pay app requirements and subs' or suppliers' lien waiver submissions. But, for Ohio projects, the issues shouldn't be insurmountable. First, note that Ohio isn't a state which requires specific lien waiver forms. So, if need be, those forms can be edited to reflect exactly what everyone intends and agrees upon. Further, note that open and clear communication with the parties who will be submitting the waivers as well as your customer can help to navigate potential solutions. Ultimately, though - suppliers shouldn't be asked to waive their lien rights before they're paid, and they shouldn't be asked to sign documents that aren't accurate. And, drafting or editing lien waivers in a way that they reflect your situation while also being accurate and fair shouldn't be an unsolvable puzzle.

Solving lien waiver issues with the customer, subs, and suppliers

If your customer is insistent on waiver dates matching pay app dates, then using conditional lien waivers should be a solid potential fix. Conditional lien waivers don't waive a thing until payment is actually made. So, requesting your supplier to provide a conditional lien waiver in advance of payment isn't nearly as tough of an ask. If that's done, then it'd be easy to line up waivers with pay apps. Further, Ohio mechanics lien waivers can really say whatever the parties want. So, stating that the waiver waives lien rights for a previous month but was executed in the current month shouldn't be too tough, either. If the customer is asking that a supplier waive lien rights for the current month when they haven't been paid - that's another issue altogether. And, explaining why that isn't possible (at least without a conditional waiver) should help to make some headway. Finally, if possible, bringing everyone to the table to discuss the waiver issue could help to really quickly and efficiently solve the waiver issue. If your customer can discuss the issue with the party who's supposed to provide the waiver, the two should be able to work out a way to make things fair for everyone involved. If that's not possible, then really driving home the idea of why the waivers can't be submitted, as requested, might help to get the customer to come around - and providing the customer written communications from the supplier on why the waiver can't be submitted, as requested, should help. For more on Ohio lien waivers: Ohio Lien Waivers Guide and FAQs.
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